StubHub launched in the Bay Area in October 2000, seeding supply by recruiting local ticket brokers while focusing on driving demand. Once the flywheel worked in one market, they expanded to Phoenix and Seattle before going national.
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Probably the key things along the way of the StubHub path that were, you know, that were probably interesting and relevant for the broader community here are as follows. Number one, you know, like with all marketplaces, we knew that we had to sort of isolate a smaller problem and sort of solve a smaller problem before trying to like solve everything and boil the ocean day one. So The way that we did it at StubHub, and I think it's a common strategy, there were a couple of things that we did. And I think these are both strategies that may be relevant for other marketplace founders here. One is we isolated the problem just to the Bay Area. So rather than trying to build a marketplace for tickets where people could buy and sell tickets for any event across the country, we just focused on the Bay Area. As I mentioned, I was, I was at Stanford GSB, so I was in the Bay Area, and I thought that doing it close to home would be easier than doing it on the side of the country. And so we identified, you know, the Bay Area as our sort of launch market. And we didn't try to build a business, you know, in New York or Miami or Chicago. We only tried to build a business in the Bay Area. And that— by doing that, we had like a petri dish where we could try to generate some initial liquidity and get the flywheel spinning in a much smaller test environment and kind of grow it from there rather than trying to like do everything out of the gate. So that was one key decision we made very early on that I think was really helpful. Another thing we did early on that was helpful was we tried to— we knew that we, you know, the classic problem with, I think, all marketplaces is like the chicken and egg problem. How do you get— your marketplace has zero value to the demand side if you have no supply, and your marketplace doesn't have any value to the supply side if you have no demand. So like, how do you kind of get that initial kind of kindling to get a little bit of a flame and a spark going. And so what we did, um, and this is, you know, maybe relevant for some markets but maybe not relevant for all markets, but we were able to do is we worked with some local ticket brokers in the Bay Area. The way the ticket brokerage industry worked back then, and probably still to some extent today, is that there are these kind of regional brokers who are kind of mom-and-pop businesses where their business is, you know, they buy tickets, they get access to tickets, and they have different ways of getting access to tickets, but they get access to tickets and they pay, you know, X dollars for their tickets, and then they sell them for 2X, and that's their business model. And so those businesses tend to be regionally focused, and, um, and, you know, they don't have kind of national coverage, but they focus on the Bay Area or New York or whatever, and they're kind of mom-and-pop businesses. So we were able to recruit some ticket brokers to list their tickets on StubHub on the very early first version of StubHub that we built, which allowed us to kind of short-circuit one side of the marketplace because all we needed was, you know, a small number of those ticket brokers, like even literally like 5, you know, 4 or 5 or 6 ticket brokers was enough. They— because they kind of— because this was their business, they had enough coverage of events just with those 4 or 5 sellers that we could then just focus— after locking them down and getting them to agree to list their tickets, we could really just focus on the demand side and driving demand to the tickets on StubHub, and therefore getting the beginning of the flywheel spinning. We knew if we had demand and if these sellers were successful selling tickets, that they would stick, they would come back, and they would sell more tickets because that's all they really cared about was selling tickets at the highest price possible. So that was a way for us to kind of short-circuit one side of the market. So then we further isolated the problem not only to the Bay Area, but really just to the demand side. And that tends to be the hardest part of the problem in most marketplaces is getting demand to come and pay for something, right, to buy something. And so that was kind of what we did in the very early days. And And we launched the first version of StubHub in October of 2000, and we slowly built from there. I mean, first we had just the Bay Area for, I don't know, 3 to 6 months, and then we launched another city, probably also west of the Mississippi. I don't remember the exact sequence, but I know we were in Phoenix at one point, and probably Seattle, I think, were 2 of our next cities. And then we kind of, at one point, maybe a year after, approximately a year after launch, we said, okay, we're gonna just like open the floodgates. And we just sort of added all of the event information for events across the country and, you know, kind of were quickly able to kind of parlay that into a national marketplace.
