How We Started A $1M Event Ticketing Platform From Spain
Hello! Who are you and what business did you start?
Hello to all of you who like to live outside your comfort zone. My name is Juan José Delgado and I am a co-founder of Palco4. Although I'm an engineer in Telecommunications, I've always had a vocation for management and entrepreneurship, so I completed my studies with an MBA to better understand business strategy
I started this adventure 5 years ago after several experiences as an entrepreneur in which I have obtained a great benefit: experience. To achieve this objective, I have left comfortable managerial positions, but I have no regrets.
Palco4 is a disruptive ticketing company, that is, a platform to sells tickets for all kind of events through Internet. We operate in the primary market, making an agreement with promoters, venues, etc. not in a reselling market. We cover all the lifecycle in the ticketing process: internet selling, box-office, access control..
We base our success on:
- The most versatile and powerful platform
- A highly optimized and efficient value chain that allows us to compete on costs
- A different business model focused on the promoter.
And above all, there are two fundamental strategies: an orderly and sustainable long-term growth policy and a constant search for quality.
Now, Palco4 is a reality that transacts 4 million tickets per year, has a presence in 13 countries and an average monthly turnover of 100k USD.
What's your backstory and how did you come up with the idea?
In 2014 my friend, partner in other initiatives and one of the most brilliant tech managers I know, Vicente Vara, finished his job as CTO of one of the main ticketing companies in Spain convinced that there was an opportunity in the market and we started to shape it.
Vicente called two people from this industry: Carlos Lara, a UX Manager obsessed with perfection and Alfonso Uribarri, a tireless Project Manager. All three had the mission of developing a revolutionary ticketing software and meanwhile I was transforming our dream into an enterprise.
It's easy to go with the flow and pursue quick success, big numbers, immediate visibility - but the important thing is just to do your best every day, have a solid structure and the other things will come sooner or later.
The idea was simple: to create a ticketing platform that meets all the needs of the most demanding customer and with the best user experience. The fact we arrived last to a mature market allowed us to start from scratch, without compromises or legacies, taking advantage of all the knowledge acquired. We were ready for designing the most ambitious and powerful system and with the latest technology.
But we had to go one step further: we need to think about market trends and try to anticipate the new business models that were being presented. That is why we bet on the promoter of the shows as the center of our product.
The promoter needs greater profitability. The way to achieve this, is to control all the variables of its business and strengthening its brand. To this end, we offer a white-label system that is very focused on offering the promoter all the functionalities previously available only to the big players in ticketing.
To achieve it, we invested our time and our work for two years until obtaining the expected result. Our business philosophy was (and is) clear:
- Always controlling the product: that's why we decided not to get financing through sharing out a big amount of the company.
- Organic growth: we have developed a sustainable business model, with profits since the first year that are invested in orderly growth.
- Ambition: we know that we can compete with the best players in the market.
Take us through the process of designing, prototyping, and manufacturing your first product.
When we started the product development we counted on a key factor: The Knowledge of the market.
We knew that we could not compete in such a mature market with so many players with a minimum viable product: we needed to offer from the beginning a system that met all the main needs of our customers.
During the evolution of a business project, there will be many "distractions" and circumstances that can cause the loss of focus on our objectives. We must constantly ask ourselves if the decisions we make are aligned with the planned objectives.
We carried out a complete analysis and determined all the functionality that the platform should have, also creating a list of subsequent improvements. This list allowed us to create from the beginning a data model as complete as possible. With this, future expansions were considered from the beginning and did not involve later "patches".
Each screen was pampered, thought and revised to be functional and attractive. We are convinced that quality is something that the customer perceives in these small details.
From the beginning the system was oriented to the international market, thinking about the different legislations, languages and uses and customs. Everything would be highly configurable.
It took us two years to have a suitable product to go to the market. It was a hard work for only four people. We know that it would have been quicker to incorporate more personnel, but we wanted to control the product very closely in the development of its core. When you develop something from scratch and want to get the best result you always have the same problem: deciding when to stop. The longer it takes to get the product out, the better and more complete it will be but you may lose time to market. We started to show it and our first customer marked us the deadline.
Describe the process of launching the online store and business.
Let's be honest: we were four technical partners with a great product that needed to grow. We didn't have commercial, operations and support infrastructure.
We decided to focus on product development and initially outsource the marketing and support process. We reached agreements with partners who would perform this work in different countries. We offered our system to companies that were working in the market and wanted to change their ticketing software. We initially had to offer exclusivity by territories to convince them, and of course a very competitive price, as well as a high flexibility when dealing with their requests. As our model is based in SaaS, we could control the payment issues because we controlled our platform and all our customers’ operations. We could also control our image by monitoring what was sold on our platform. This model allowed us an initial rapid growth. We started to make money and we could begin to structure the company: we began to equip ourselves with internal management processes, support tools, etc. and gradually expanded the staff to meet the needs we faced.
We also provided the company with a clear and simple business model that made it possible not to waste too much time on administrative tasks: we worked at a fixed fee per ticket that we charged to our partners.
The acceptance of the product was very good, customers were delighted with their new ticketing software, the product sold itself and the learning curve was very fast. We attracted our first customers via the Internet, where we tried to get the attention of key people and proposed to make an online demo. When they saw the product, they were really surprised and in this way, we were able to close several deals, without face-to-face contact with our future customers. I would also like to thank them for the trust they placed in us, which has helped us grow together.
Our first idea was to attack the long tail market of small and medium sized promoters, who until then had been heavily pressured by the big ticketing firms, so that they could become independent and gain autonomy, but the reality was different: our partners saw the quality of the platform and began to demand the necessary functionalities to attack the big clients. A year later we had a product capable of competing with market leaders and we could think more ambitiously.
At this point, we saw the need to invest to increase our development capacity and create a customer support structure. Although our philosophy was not to raise capital through the entry of new partners, we were found the chance of incorporating some reference partners in the industry that could also help us in the growth of the company. So, we did.
Since launch, what has worked to attract and retain customers?
At the end of 2016, we had the opportunity to work with one of the largest international ticketing companies. This would make us grow quickly in multiple markets, but we knew that it was necessary to quickly consolidate the structure of the company. We also thought that the process was going to be very demanding.
We gradually added three people to the staff. We needed experienced people who knew the market and could deliver results from the beginning. This forced us to create a structure with a lot of senior people and little junior staff that we would have to balance later.
By the end of 2017, we were already 11 full time and part-time staff, also incorporating freelance people for certain projects that we could isolate and execute externally without losing the internal know-how.
The growth of the staff also presented us with a new challenge. Our work philosophy was based on individual responsibility and trust. There were no timetables and each person were able to choose to work in the office or remotely. But if the team grew it was necessary to improve coordination between everyone.
We established new communication procedures and organizational tools: short daily meetings, project management tools, information repositories,..We needed everyone to feel part of the same team wherever they were and to have the necessary information about what each person was doing, who they could ask for help and, in general, what was going on inside the company,... but remotely. For us, it was very important our agility and ability to react and it was very important to establish growth models that allowed us to continue being a dynamic company. We needed to follow our pace of work.
2018 was a year of hard work and consolidation. This great client opened us a lot of international markets and we began to work with first class events. When you work with such a large company, the demands are very high and although you always think you are prepared, the truth is that the adaptation was complex especially in terms of quality levels and operational processes in general.
How are you doing today and what does the future look like?
We are currently a “Formula 1 car” that needs to start running.
We have 12 full-time employees, several international freelancers, and part-time collaborators. We have a 24x7 support system provided in LATAM, Spain, and APAC so that we can reach our clients in person in a maximum of 24 hours. We have a high-performance infrastructure, fully scalable and rapidly deployable, which has passed the most demanding security audits and load tests, we have experience and a product that is positioned where we wanted: it satisfies the vast majority of the most demanding customers. We also have a solid financial capacity and a great desire to grow.
Now we are 100% focused on opening new markets, especially in the consolidation in LATAM (due to its proximity to culture) and the entry into the US market. For this reason, we are taking the following steps:
Creation of a commercial structure: we want to incorporate a professional with experience in the sector for the USA market. In order to be able to focus more on commercial tasks, we are looking for a CTO that allows us to delegate the day-to-day management of technology.
Brand image creation: although our system is offered as a white label, we need our customers to differentiate us from the competence. To do this we are creating a brand strategy that goes through a completely new corporate image, from the logo to the website, enhancing communication, attendance at specialized events and showing our product without complexes. We also want to incorporate a junior marketing manager who grows with us.
Consolidation of the processes of deployment of new environments and customer service.
We have come a long way, but we must continue to keep walking. We believe that we are ready, and we want to bet hard.
During this year our target is to consolidate the LATAM market by increasing the number of tickets sold by 25% and opening the first reference customers in USA, as well as exploring new business lines. With half a year consumed, we are close to achieving these challenges.
With this consolidation during 2019, we face the coming years convinced that we will be able to achieve sustained double-digit growth during the following years and become a reference platform in the market.
It’s very important also another detail: Innovation. We must anticipate market trends and be prepared for the changes that will surely happen. We are currently exploring several new trends such as blockchain, the convergence of primary and secondary markets, e-ticketing, biometric identification, Smart cities, etc. to have for a long time a product that can compete also for its innovative character.
Through starting the business, have you learned anything particularly helpful or advantageous?
There are four very important lessons I have learned in my entrepreneurial career:
First, it is essential not to lose the objective: it is important to have a clear focus when defining the company's value chain in order to center on what provides the most value. It is necessary not to lose the aim of your project throughout the development of it so that you can fulfill all the plan you have developed.
Don't try to earn every penny. The only way to establish long-term relationships with both suppliers and customers is for everyone to be comfortable in the business.
During the evolution of a business project, there will be many "distractions" and circumstances that can cause the loss of focus on our objectives. We must constantly ask ourselves if the decisions we make are aligned with the planned objectives. In order to do this, it is necessary not to lose control and, therefore, to avoid decreasing the decision-making capacity of the founding team.
Related to the above, we find the second idea: the need to have a clear business model and a short-term solvency plan. Although today many Internet businesses are based on future promises, from my point of view this model shows great risk and generates uncertainty in the work environment. You must play with expectations of risk-return, both in terms of obtaining financing and of retaining talent. And most importantly reduces the decision-making capacity.
Another important lesson is the importance of talent, both individual and collective. It is very important to surround oneself with talent: talent is critical when starting a company, but also when "greasing" a productive machine.
In the first case, I'm lucky enough to have very talented partners, and that makes everything easier. But it is also true that talent is expensive and often individual talent does not fit with the company objectives, so the second variable comes into play: collective talent. It’s important to create a working climate that allows the best of each and valuing individual capabilities. This cooperative environment boosts the creation of a "collective talent" that is a much more stable asset over time than individual talent.
Finally, don't try to earn every penny. The only way to establish long-term relationships with both suppliers and customers is for everyone to be comfortable in the business. The best negotiator is not the one who achieves the best for his company even at the expense of others, but the one who achieves what he considers fair leaving all parties happy.
What platform/tools do you use for your business?
Given our way of working, it is very important to have good coordination among all, so the management and communication tools are very important in our day to day.
We use:
- Jira for project management and management of platform roadmap.
- Trello for planning new releases and managing tasks both internally and with customers
- Slack as an instant communication tool
- Freshdesk for customer service and support
- Bitrix24 as a CRM and project cost management tool
- We are valuing HeySpace to integrate several platforms and have fewer tools separately.
- FactorialHR for human resources management, vacations, absences, working days, etc.
- Google Suite and especially Google Meet as a shared repository, mail and video conferencing tool.
- And of course, in a more technological level, a multitude of frameworks, management tools and code review, tests, etc.
What have been the most influential books, podcasts, or other resources?
I'm sorry, but I'm going to be very classic. I'm one of those who thinks there may be new business models, but they're all based on the same rules. I haven't found anything so disruptive in new companies to talk about a new economy.
Therefore, I consider COMPETITIVE STRATEGY TECHNIQUES FOR ANALYZING INDUSTRIES AND COMPETITORS by Michael E. Porter as a must-read for anyone who wants to start a business.
It’s my main reference and each time I read it I find interesting applications in my day to day.
Advice for other entrepreneurs who want to get started or are just starting out?
Entrepreneurs are currently in fashion; the world of startups is very mediatic and this is a double-edged sword.
While on the one hand every day there are more facilities for someone who wants to start a new business and there are more people willing to invest in a good project, on the other hand, there is much "noise" and a lot of rumors around us.
It's easy to go with the flow and pursue quick success, big numbers, immediate visibility ... from my point of view the important thing is just to do your best every day, have a solid structure and the other things will come sooner or later.
Are you looking to hire for certain positions right now?
We are currently looking for an experienced CTO eager to join a team with great professionals, and a commercial for USA and LATAM with experience in the sector. If any of you are interested, please send me an email.
Where can we go to learn more?
We are finishing our new website in which we will have a blog that will fill with interesting content about us and the industry, stay connected! www.palco4.com
You can also find information about our day to day in our twitter @palco4ticketing.
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