By Adarsh Manpuria, WG’15
I came to Wharton excited to benefit from the evolving entrepreneurship ecosystem and to further my startup ambitions. Today Wharton provides extraordinary resources for startups: Founders Club, eClub, Tech & Design club, Business Plan Competition, Entrepreneur-in-Residence meetings, Wharton Entrepreneurship, access to UPenn facilities and also the Philly start-up community. While navigating this treasure chest, I was fortunate to visit a talk by Jeff Fluhr ENG’96/W’96, co-founder of StubHub and Spreecast, on October 22nd, organized by the Founders’ Club. Jeff delivered a thought-provoking and stimulating speech, but also one that made me think about what I (and other aspiring founders) have been so keenly looking to discover—the perfect recipe for entrepreneurial success! Here’s what I took away from his talk:
Entrepreneurship is all about making choices. The choice to start something new, foregoing the opportunity to do something else (for a Wharton MBA, the typical opportunity cost is to work with a top consulting firm, in investment management or join a tech startup). Yet that is just the beginning, as the founder finds himself/ herself in a world of endless choices. What kind of a business should he/she launch – B2B or B2C? Retail, food, healthcare, IT? What kind of a team to build? To raise money or to bootstrap? Some choices are easier than others; few turn out to be right. Jeff and his co-founder, Eric Baker, discovered the idea for StubHub (then named INeedATicket.com) while working on a business plan competition at Stanford. Although they reached the finals, they chose not to present their idea, as they had started to believe in the potential of the business. Both Jeff and Eric dropped out of school and raised money from family & friends to build their business. Jeff admits that this choice wasn’t a big determinant of their ultimate success, but it set Jeff and Eric up for many more choices to come.
2. Intuition, courage and perseverance
The early business plan idea for StubHub had all the ingredients of a high potential venture: a large multi-billion dollar ticketing market in the US, a highly fragmented ticket seller base of mom & pop agents and the absence of a consumer brand with any trust or loyalty. Jeff and Eric were quick to see the opportunity and seize it with both hands. Along the way, they stuck to their intuitions. For example when making key hiring decisions, they would value the candidate’s work ethic much more than his/her technical capabilities. Even for Spreecast’s CTO role, Jeff chose Robert Hunt, who had taught himself to write code, despite coming from a consulting & investing background. In Jeff’s words, “Experience is highly over-rated!”
Among the many investors and experts that Jeff and Eric tapped early on was Fred Rosen, ex-head of TicketMaster. He found the business idea for StubHub ‘sketchy’ at best, and believed it would never work, as there were many regulatory hurdles and that artists/sports teams had no incentives in a secondary market for their tickets. The founders did intensive diligence on the regulatory concerns and found that there was no federal law against secondary ticket sales. Though 15 states had some form of restrictions, Jeff and Eric saw this as an opportunity, an interesting problem to solve. When they could not forge a tie up with the artists/sports teams, they compensated through other innovative promotions. Throughout their StubHub journey, they made several pivots, like doing white label platforms for B2B clients such as MSN to keep the business alive.
3. It’s all about the journey!
I have often wondered what it means to be a ‘serial entrepreneur’. Is it an addiction to the scrawny, hustling life at startups, a disinclination to work within passive large corporations, or is it a designation coined to portray credibility and experience? I think successful entrepreneurs such as Jeff would describe it as a way of life—the drive to keep going back for more! StubHub, was founded in 2000 and sold to eBay for $310M in 2007. However the journey wasn’t as smooth as it sounds. On the way, Jeff and his team had to fight off multiple lawsuits, tackle near bankruptcy and pitch to 100+ investors before they could raise their Series A funding (in a time of the early 2000’s dot-com bubble). As Jeff said, “There are always highs and lows at a startup, and it can be emotionally taxing. It’s not for everyone, but the journey can be extremely fulfilling if you are one to make it through.”
We wish Jeff the best as he continues his journey with Spreecast, with his own high standards of past success to live up to!
Bio: Adarsh Manpuria, WG’15, is an aspiring entrepreneur, currently looking for a technical co-founder for his business idea in the consumer web space. Previously he has experience working with Rocket Internet, a leading ecommerce incubator, and with Bain Capital PE and Bain & Co.