How COVID Took Our Business To $0 & How We Bounced Back To $1M/Month

Ian Chen

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Published: November 17th, 2022

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Ian Chen

Founder, Discotech

$100K

revenue/mo

Founders

Employees

Discotech

app.discotech.me

from Los Angeles, CA, USA

started October 2013

$100,000

revenue/mo

Founders

Employees

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Want more updates on Discotech? Check out these stories:

1. How 3 College Friends Created The 'OpenTable' For Nightlife [$1M/Year] (2021) ➜

This is a follow up story for Discotech. If you're interested in reading how they got started, published about 3 years ago, check it out here.

Hello again! Remind us who you are and what business you started.

Hello again! My name is Ian Chen, Co-Founder, and CEO of Discotech, the OpenTable for nightlife and music festivals, you can check out our original publication on Starter Story.

Discotech offers a free mobile app (available on iOS and Android) and website which makes it easier for customers to discover events, purchase tickets, reserve VIP tables, and get free guest list access to clubs, concerts, and music festivals in different cities. Our most frequently used service is our free guest list, which helps our users save money and time compared to waiting in line and paying for general admission. Our company generates revenue from our venue partners, who pay us a commission for helping them sell VIP tables and tickets, as well as for bringing in customers through our exclusive guest list. We are currently booking over $1M per month in sales volume, with a gross margin of around 10%. This is a huge increase from where we were a year or two ago when the Covid pandemic shut down our entire industry and dropped our sales to roughly $0.

Tell us about what you’ve been up to. Has the business been growing?

Since we last checked in, our engagement (monthly active users) and revenue has continued to rebound following the pandemic. Although we are still not back to where we were before the pandemic in terms of usage, we are happy to see our MAU steadily rising and our revenue numbers climbing back up.

With our revenue numbers growing again, we have been able to start rebuilding our team. We recently hired 2 software developers this year, are looking to bring on another full-time Python engineer, and have also onboarded a team of offshore customer success representatives from the Philippines which has been a big win for us. Our goal is to continue scaling up our engineering team so that we can continue to roll out new and exciting features for our users, including the ability to follow artists that you love, form parties and communicate within the app (social features), and enable community posts.

On the marketing side, we have recently found some success with micro-influencers / influencers on TikTok and Instagram. The challenge for us here is in scaling up our marketing efforts on these fronts, as we have also had marketing failures when partnering with the wrong type of influencer.

We also recently received some press mentions from The Points Guy, as well as from The Las Vegas Review Journal.

Perseverance is important and admirable (we certainly have a lot of it), but it’s always better to fight smarter than to fight harder.

What have been your biggest challenges in the last year?

Our focus right now is on getting our user engagement (monthly active users) numbers up. We are currently around 50-60% of what we were doing pre-pandemic, and we believe that with less competition now in our space, those numbers should continue to grow over time.

Hiring well and growing the team also continues to be important challenge at Discotech. With a small team, every new hire you make is critical, and the resources and time required to onboard someone are significant. At this stage, making a wrong hire or two could set back the business. On our end, we are doing our best to be patient and diligent in our selection process.

What have been your biggest lessons learned in the last year?

Make sure you are covered from an insurance perspective. Even if you don’t believe you are doing anything wrong or illegal, you can still get sued by anyone, and legal fees add up even if you ultimately don’t have to pay any fines for wrongdoings.

Succession planning, one of our longtime colleagues started the process of leaving the team and we are working through it together. We are grateful for his continued love and dedication to the team, as we pass on the reins to others on the team to step up.

What’s in the plans for the upcoming year, and the next 5 years?

In the next year, we are very excited about some major product releases which we believe will enhance each user’s personal experience with Discotech. We want to build a customized personal journey on Discotech so that we can better curate events for our customers that they will love. We want to continue to sign more venue partnerships, with an emphasis on discounts and free services for our users. The more value we can deliver to our users, the better.

Over the next 5 years. Hopefully, we will have exited by then, but until then we plan to continue to improve our product/technology, grow our footprint both from a user perspective as well as a venue perspective, and focus on ways to delight our customers and create value for them.

What’s the best thing you read in the last year?

Tools of Titans by Tim Ferriss
Jocko Podcast #221 on Jonny Kim

Advice for other entrepreneurs who might be struggling to grow their business?

Start to think outside the box on how to pivot, grow your addressable market, or shift your revenue model. I certainly wish I spent more time in the past doing this type of big-picture strategic thinking. Many of the best entrepreneurs I know today are those who failed with an idea but then made a pivot into something that works. Perseverance is important and admirable (we certainly have a lot of it), but it’s always better to fight smarter than to fight harder.