In just a few days, yours truly will be interviewing Renaud Visage on stage at Pioneers’17 in Vienna, in an attempt to completely pick his brain on the topic of growing a startup from scratch to global scale-up. Visage knows a thing or two on the subject, having been the founding technical architect of Eventbrite, an active angel investor and startup mentor.
He also recently started working with Index Ventures, guiding founders in realising their global ambition and helping the VC firm evaluate and support companies that are solving challenging technical problems.
I caught up with Renaud in preparation of the on-stage chat (you can still grab your tickets for the event here – on Eventbrite of course), and thought it would be valuable to share some of his lessons learned here.
As a rule of thumb, should a startup try to scale by growing organically or – provided sufficient financial backing – grow by acquisition?
It varies country by country, vertical by vertical, and usually both can be used to become the dominant player in a market. Organic growth is usually preferable and more economical, and should definitely be leveraged wherever possible, if only to bring competitive pressure to the market and to be in a better position to negotiate future acquisitions.
But sometimes, to take your business to the next level in a market or a vertical, or to be able to integrate new technologies into your product offering, acquiring another company makes perfect sense.
Sometimes, there is an opportunity so great, so fitting, that you cannot pass on it.
In our case, we have been growing strongly in several European markets, and saw a complementary company that shared the same values, the same vision for ticketing, and to some extent similar technology. Yet here we were competing against each other. It simply made more sense to go together than to compete against each other.
You’re referring to Eventbrite’s acquisition of Ticketscript earlier this year. This came after you had launched your own European offices in the UK, Ireland, Germany, and most recently, the Netherlands – the home of the company you’ve now acquired. Does that mean your strategy to grow organically didn’t quite pan out?
On the contrary! We’ve seen very strong traction with our own European operations and had already been processing more tickets in Europe than Ticketscript.
Having said that, we saw a unique opportunity to supercharge our existing growth with this acquisition, particularly in the European music space, where our new colleagues are particularly involved.
There was a very good match between our two companies in terms of mindset, product vision, and equally importantly in our regional footprint: they have large offices where we are still on the smaller side, for example in the Netherlands, and smaller offices where we are already well established, like in the UK.
Add that to their shared passion for live events – and the same vision to disrupt the European ticketing market with technology – and you have a perfectly complementary fit. And it turned us into Europe’s third largest ticketing company overnight: both companies together processed 35 million tickets in 2016.
How long does it take to integrate another company into your own offering? How are you approaching the most recent integration?
We’re working very closely with our new colleagues to integrate our teams, processes and to merge the best of both technology platforms. This is a very sensitive process, and while we’re making great headway, we are definitely prioritising thoroughness over speed to make sure that the transition for existing customers is as smooth as possible.
We expect that the eventual integration into one platform will take at the very least several quarters.
From an organisational point of view, we approach the acquisition very cooperatively with our new colleagues. The former Ticketscript leadership team is now heading Eventbrite’s operations in Continental Europe. Frans Jonker, who co-founded Ticketscript, is now our General Manager for this region.
More than a pure tech integration, this is a unique opportunity for us to bring the best of both platforms together for the benefit of our European customers, and to accelerate our growth in the region.
What are the challenges of growing internationally? What are the opportunities?
There are some challenges, like overcoming language barriers, learning different business cultures, ensuring good communication between remote offices, implementing local payment preferences and accounting practices, and building a multilingual offering (hint: set your offering up for this from the start, even if you only deal in one language at the moment).
Internally, it can be challenging to create and to maintain a coherent team culture across borders and time zones; that certainly takes a dedicated effort.
All of this is worth it, though. Having an international business means that your startup is less reliant on the performance and growth prospects of a single market or region, and gives you access to more levers to pursue growth differently in various geographies. The more market share you capture at home, the harder it will be to maintain the growth trajectory there.
New markets can compensate for this, as they open up additional growth potential with (at least initially) higher growth rates. This is crucially important for reaching scale, and in turn for reaching profitability, and it gives you the chance to become a global leader in your space. At Eventbrite, we want to become the global marketplace for events. And we are getting closer to this goal: today, we process between 2-3 million tickets in 180 countries – per week.
How does the technology you use internally scale as you expand internationally?
We always intended to take Eventbrite global, and invested a lot of time to make sure that our platform was scalable internationally and able to run the same codebase everywhere before we expanded beyond the US.
We aimed at automating as much as possible, and isolated country specific features like local payment processing or tax calculations. We also built enough flexibility in our tech stack to be able to fully localise the experience for each market. All of this makes it much easier for us to launch Eventbrite in new markets, which in turn continues to drive our global expansion.
What’s different about building apps for millions rather than hundreds – or even thousands – of users?
When millions of customers rely on your service, to run their business 24/7 or to buy tickets for their favourite festival that just went online, you simply cannot go down. The quality and reliability of our software and infrastructure is a huge competitive advantage.
To achieve this critical uptime and quality of service, we are always monitoring and fine-tuning the performance of our application to quickly identify and solve any bottlenecks before they turn into problems. Any changes to our system are automatically tested before they are deployed to production, and new features are only gradually rolled out.
Serving millions of events, rather than thousands, also means that you need to be prepared for additional peaks in demand. This is especially true in our industry, where some popular events can sell out in seconds, so we reserve enough burst capacity to serve these high demand on-sales that can happen at any time.
Maintaining, scaling and continuously improving a product for millions of customers means having a large engineering team working on your product at all times. Making sure that this team works flawlessly requires structure, dependable processes, continuous training and confidence in our talent.
Thank you, Renaud, and see you soon in Vienna!