Adam Kanner | ScoreBig, Startups, and LA Tech
Adam Kanner is the co-founder and CEO of ScoreBig and has set two goals for the company. One is to help the industry fill unsold seats in a way that doesn’t hurt business like traditional discounts. The second is to give consumers an affordable way buy tickets to sporting and other live events. With ScoreBig being Adam’s fourth startup, he certainly knows his way around a business. Adam sat down with us to talk about startups, the LA scene, and his company, ScoreBig.
TechZulu: Where did you get the idea to start ScoreBig?
Adam Kanner: I gravitate towards businesses that solves problems. While I was working for the NBA, I learned there were two problems the live entertainment and sporting industry were facing: the number of empty seats and the consistency of raising prices. The first problem is the number of empty seats. It wasn’t even an issue about making money, but about when people see empty seats. When an arena is 20-30% empty it creates an impact on people’s experience. Empty seats make the audience wonder if they got ripped off, season ticket holders wonder if they should renew for next season, and create a negative impact on viewers and advertisers.
Selling seats was very challenging. We had companies come knocking on our doors to tell us a solution to our empty seat problems. We had flash sales and group sales sites coming to us with the same general business idea: shoot out a couple million emails to potential customers saying they have tickets on sale. This is a huge deal to a half a billion dollar industry market that our tickets are on sale. It creates a problem within the live entertainment and sport industry to associate itself with discounting.
Now on to the second problem; the rising ticket prices. Over the last several decades, this industry has done a pretty good job at raising prices. We have out-priced the typical consumer.
At ScoreBig we aren’t “discounting” tickets at lower prices. We try to make sure the way we give our consumers prices below box office is a way that eliminate negative effects of discounting and does not cannibalize full price sales in the industry. You as a consumer can get amazing savings.
What is ScoreBig?
We have two main goals for ScoreBig. One is to give consumers a more affordable way to get tickets to live entertainment. The other is to make sure we help that industry fill those seats up without hurting their business. We have people who are veterans in the live events industry and have gained the trust of the people in both the sports and entertainment industry. The trust is really around the fact that we are not going to take your prized possession (the tickets) and do anything with it that embarrasses you or hurts you. And if we do, then we have mechanisms to have you take your tickets back. It is very low risk for the people who give us inventory.
You (the consumer) just have to be flexible. We never list the actual price of the ticket. Instead we have consumers offer us a price and that price will either be accepted or rejected. Our “pick-your-price” model benefits both the industry and you, the customer. And what we offer is an affordable way to get tickets to sporting and other live events for everyday people.
That is why we have millions of tickets that are available at affordable prices. Most people don’t know they can get tickets below box office price. One of our biggest challenges, from a marketing perspective, is educating people that every ticket we sell is below retail price, we charge you no fees, free delivery, and everything is guaranteed. We don’t sell junky seats at the last minute. We sell tickets at an average 28 days before the event and the seats we have are 3-5 star rating seats.
ScoreBig also recently teamed up with United MileagePlus. Tell us more about it.
Most people don’t believe that we can do what we do. There are lots of potential partners that have very trusted brands that reach tens of millions of people, so we might as well figure out ways to partner up with them. So they can educate there members around what we do and United was a great partner to team up with.
To help us market our company, we have teamed up with United Airlines to help educate people about our company and gain tens of millions of potential customers. There are many United Airlines members who are now not only able to spend their points on airline tickets, but they can also spend their points on tickets at ScoreBig. You can also earn points by buying tickets on ScoreBig. Now, rewards members have a new way to get their money’s worth from their rewards points
What challenges are you facing?
Marketing our brand is one challenge. Like I have said earlier, many people don’t know about the services we offer – affordable seats, no service fees, free delivery, and guarantees that no other service out there does right now.
The point we are at right now is incredible. We have great access to capital. We have grown way above our initial projections. We have grown six times since last year. Revenue and transactions have grown eight times since last year. The number of investors is incredible. What I worry about mainly is execution. We have a sound business model and we have an incredible group of people. We just need to continue executing those plans.
What are you most proud of?
That is an endless list I have. I am so proud of this company. We have such great people working here and have great investors that are backing us. We raised money when the markets were terrible and when the markets were great. We have executed our plans so well, that I’m just excited for everything. It’s a weird position I am in right now, but things are really good. I’m hoping the city of Los Angeles lets us stay here. I think LA needs to embrace startups more.
What advice would you give to startups here in LA?
This is my fourth startup. I would say be focus on the substance and not the flash. To me it’s about conservation of capital, making sure you have the best people, and having problems solved with people that inspired and are dedicated to your vision. Particularly in the startup days, you will never pay people they can make somewhere else and you’ll never give them the status of some of the jobs that they will get somewhere else.
You need to give your people belief in building something great and give them the tools to do it. There needs to be a discipline that these startup businesses aren’t making money in the beginning stages, but solving really cool problems. The job of the startup CEO is to simply reduce the risk of whatever venture you do. To do that, make sure you have the best capital, the best people, the best idea and strategy, and you click these things off. Even if you have all that, the odds are still against you failing.
I had to close the doors of businesses and layoff people. I hated to do those things, I hope I never have to again, but you have to be prepared to do it. You want to give yourself every single opportunity to succeed.
I just want to say for the people who are just starting off, that you need to be crazy, genuinely passionate about, not just starting up, but passionate about problem solving. It’s a journey and you need to be comfortable during that journey for a long time. I started this business and I knew that this was a five year commitment minimum. No matter what happens, I’m in this. I’m either going to take it somewhere successful for my employees and investors or I’m going to deal with it if isn’t.
Typically, younger people are doing startups, because it’s a real sacrifice. You have to be 100% committed. You can’t just do this on the side and you can’t just walk away either. Startups are like waves. You can have really cool things that happen, then say three months later, things can go south. There is little or no middle ground. If you haven’t gone through this feeling, it’s scary. Even if you have gone through it before, it’s still scary, but you know what to expect. I just have to say, if the roller coaster is too much for you or too stressful, then this place isn’t for you.
What are the pros and cons of the LA tech scene?
I think the pros are that there is a lot of great talent, a lot of great schools, and a lot of great people with experiences throughout a whole bunch of industries that want to be great. It’s a growing community, which is exciting.
The negative here is that we are very immature when it comes to the ecosystem. There is no solid financial investment footing to constantly support startups here. The people aren’t immature, but the market and startup culture isn’t quite here yet.
Municipalities need to get better to support startups. There’s a lot of talk about business that brings jobs. I’m just embarrassed for LA that the city of Los Angeles is still trying to figure things out, especially with the crazy tax laws and other stuff that they try to impose on us. It’s crazy to me. This market has the ability to be startup friendly and innovation friendly.
Thank you Adam for your time.
Visit ScoreBig and see what they have to offer.
