Author: Andy (Page 16 of 26)

Deciphering the Online Ticket Broker Algorithm

March 26, 2014 / Andy

Online ticket brokers such as StubHub.com have been around long enough that they are a standard ticket buying or selling experience for many fans.

Can’t make a game – stick the tix on StubHub. Need tix for a game – grab them off StubHub.

The model is brilliant. They charge the seller 15% commission, and then they charge the buyer a 15% tax as well. Say you post 2 tickets for $50 ea, so $100 total. The buyer sees a price of $57.50 each and pays $115, with StubHub taking the extra $15. Then StubHub sends you a check for $85, keeping the extra $15. That’s a 30% commission on 2 tickets changing hands. But the program is still the easiest marketplace around.

But there’s an interesting next level to this marketplace. How do the sellers decide when to post and how much to offer?

This Thursday and Saturday, the NCAA West Regional will be in Anaheim, CA. Two of the participants, San Diego St and Arizona have large alumni bases within driving distance. The Arena holds 14,000 people and is officially sold out. On Monday morning, the lowest ticket price on StubHub was about $225 and there were about 790 tickets.

Since then, the number of available tickets has fallen to between 450-500, but never lower. Meanwhile, the price has dipped into the $150’s. So while theoretically the supply is falling, so is the price.

So who is keeping the supply set at around 500? How many tickets are actually being moved? It looks like StubHub is automatically dropping the prices by a certain % every few hours. Then when old tickets get purchased, new ones are getting posted by the brokers. That way there’s never a listed supply that encourages people to keep waiting. The incentive is to jump on the listed price before the supply dwindles more.

So I wonder if it’s StubHub limiting supply, or the brokers themselves. Based on its 15% x 2 commission model, StubHub certainly has the incentive to keep prices as high as possible. But it also has incentive to make sure all the tickets get sold. So somewhere is a Pareto optimal equation for StubHub that isn’t necessarily optimal for buyers and sellers.

I assume they don’t open up their API’s, otherwise someone would have built the “Farecast for StubHub” by now. Until they do, all you can do is keep an eye on it yourself.

Here’s Your 2014 Sounders Transactions Merry-Go-Round, In One Easy List

March 2, 2014 / Andy

Using the Seattle Times as a source, here’s as close as I can get to a complete list of how your old 2013 Sounders became your NEW 2014 Sounders. For the purpose of this list, I’m mainly only counting players who actually played or are expected to play.

If you remember, we ended 2013 on a sad note. Here’s what the roster looked like as the players packed up their gear in October 2013 (Starter types listed first).
GK: Gspurning, Hahnemann, Ford, Weber
DEF: Yedlin, Hurtado, Traore, Gonzales, Scott, Ianni, Burch, Remick
MID: Alonso, Evans, Rosales (c), Neagle, Moffat, Rose, Caskey, Joseph, Zakuani
FOR: Dempsey, Johnson, Martins, Estrada, Zavaleta (Note: I’m not sure when Ochoa was released.)
Non-Factors: Lund, Bates

So let’s see what happened next:
11/19: Alonso gets a new contract with a DP slot.
11/20: Evans gets long-term deal.
These two things mean that Dempsey, Martins and Alonso are your 3 DP’s, and Evans is presumably taking a good sized share of the salary cap. So now the team needs to trim payroll.

So…
12/10: OUT: Michael Gspurning, March Burch, Steve Zakuani

12/11: OUT: Mauro Rosales to Chivas USA
12/11: IN: FOR Tristan Bowen from Chivas USA and No. 2 in Allocation Order
The Rosales deal ends up being very interesting for the Sounders. Chivas takes on an older, expensive player, gives up a younger, cheaper one, AND gives Seattle a high spot in the Allocation order, which becomes interesting later. Then later in the off-season, Chivas ownership sells the team back to the league.

12/10: IN: GK Stefan Frei TO Sounders from Toronto for 2015 1st Round Pick
12/12: IN: DEF Chad Marshall TO Seattle from Columbus for 2015 3rd round pick and Sounders Allocation placement
Remember, the Sounders got Chivas’ Allocation placement, so now they didn’t need theirs. Gspurning’s salary goes to Frei. Burch’s to Marshall (roughly).

12/12: Ford gets new deal to be 3rd string Goalie
12/13: IN: FOR Kenny Cooper to Seattle from Houston for Adam Moffat
12/16: Gonzales gets a new 1 year deal

12/17: OUT: Johnson to DC for allocation money
This has to happen because the team can’t afford Evans AND Johnson as non DP’s.

12/18: IN: FOR Chad Barrett via re-entry draft

1/6: Neagle gets extension
1/8: Hahnemann gets extension
1/9: IN: Homegrown players Sean Okoli and Aaron Kovar

1/16: OUT: Hurtado and Ianni (and No 13 Pick in 2014 Draft) to Chicago
1/16: IN: DEF Jalil Anibaba (and No 8 pick in 2014 Draft) from Chicago
This is a 2 for 1 deal. Sounders have too many center backs and need to cut some more costs.

1/31: IN: MID Marco Pappa via Allocation Draft
Remember the Rosales for Bowen deal? Now, it’s become Rosales for Bowen and Pappa. Nice.

2/28: OUT: Zavaleta loaned to Chivas USA
Now, that deal has sort of become Rosales and Zavaleta (on loan) for Bowen and Pappa.

Undated: OUT: Joseph training with New England

Grand total
OUT: Gspurning, Hurtado, Ianni, Burch, Joseph, Rosales, Zakuani, Johnson, Zavaleta (Loan)
IN: Frei, Marshall, Anibaba, Pappa, Cooper, Barrett, Bowen, Okoli, Kovar
KEPT/ENDORSED: Hahnemann, Ford, Gonzales, Alonso, Evans, Neagle
NO CHANGE: Yedlin, Scott, Traore, Remick, Rose, Caskey, Estrada, Dempsey, Martins
OTHER: Ockford (Loaned out), Lowe, Periera

Got it? Make sense? Good.

Helping the JOBS Act Get Through

February 24, 2014 / Andy

From the entrepreneur’s perspective, more access to capital is better than less. We have a current ecosystem that involves Angels and VC’s, but there are many reasons why we should make it easier for people to make informed decisions about investing in new ventures.

There’s a hearing in the Washington senate on this Tuesday, 2/25. Here’s a good link to learn more: http://lunarmobiscuit.com/washington-state-jobs-act/

“This law will allow any Washington State company to raise up to $1,000,000 per year from Washington State residents. Any resident will be able to invest at least $2,000, with that amount rising to 5% or 10% of a resident’s income or net worth. No longer will entrepreneurs be limited to raising money from “accredited” investors.”

Seeing Sting and Julio Down By the Schoolyard

February 22, 2014 / Andy

You know when you are sitting around with friends listening to music and enjoying a beverage or two, and someone says, “Wouldn’t be AWESOME if “Person X” and “Person Y” went on tour together?” And then you spend an hour debating what group of people you’d like to see collaborate on stage at the same time for a whole show.

Springsteen and Pearl Jam? U2 and Madonna? Paul McCartney and Justin Timberlake? Bruno Mars and the Rolling Stones? Usher and Toby Keith? And then you wonder sadly why it never happens.

Well somewhere high on my list was Paul Simon and Sting. And lucky for me, they showed up at Key Arena last week.

I wasn’t exactly sure how they were going to perform, but their model was fantastic and hopefully will be something other groups will replicate. For a pretty ridiculous ticket price, they combined their 2 bands into a fantastic harmony featuring both the predictability of the songs you want to hear, and the unpredictability of some weird combinations.

Grand total, we ended up with 30 songs over about 2 hours and 45 minutes. And frankly, the time flew by. The 30 songs themselves make for an awesome playlist (listen here if you’d like). But how they were executed made it even better.

They came out together, sharing vocals on 3 of their top hits, almost as if they had written them together. Then Sting did 5 of his own, Simon came back for a duet, Simon did 5 of his own, Sting came back for a duet and 5 of his own, Simon back for a duet and 5 more, and then a 4 song encore together. Basically, we ended up with 10 duets, and each guy did 10 of his own. Plus Sting did Simon’s America with one of his solo choices, which was a nice tribute to the man 10 years his elder.

IMG_7349-25

The highlights of the show were watching Simon sing on things like Fields of Gold, Every Breath You Take, or Sting taking Garfunkel’s role on Bridge over Troubled Water and The Boxer. These collaborations showed both how great the songs are, but also how much talent each man possesses to have the ability to step right in and make it seem like it’s his own song.

Almost as much fun as watching Sting and Simon, was watching how the two bands played together. They didn’t hire new people to back them up, they took their regular teams and mashed them up on the same stage. All told I think there were 13 additional people when everyone was out there. Instrument wise, I think I counted 2 drum sets, a percussion set (bongos and such), keyboard, organs, bass player, 2-3 other guitars, female vocals, clarinet/sax player, a trumpet, violin and an accordion / jack of all trades. They rolled on and off the stage depending on the song, which has to take some tight coordination.

IMG_7340-500

The bands themselves were pretty funny in how different they looked. Simon’s guys all looked like they were going to walk over to Floyd’s Place after the gig for some chicken wings and cold beer. Sting’s team looked like they would take an Uber down to the Triple Door for a glass of wine and maybe check out some jazz. But musically, they seemed pretty flawless.

It’s funny to think about two people who have achieved so much in their lives, but can also have such a respect for the other one, that their natural course of action is, “Hey man, let’s go make a few million bucks playing some gigs together.” On one hand it seems so easy. But I imagine it takes some special personalities not to get too egocentric about it.

If you live out east, the show will eventually get to Madison Square Garden. I highly recommended it.

Set List:
(Spotify Playlist)

Together:
Brand New Day, Boy in the Bubble, Fields of Gold

Sting solo:
Everything She Does is Magic, Englishman in New York, I Hung My Head, Driven to Tears, Walking on the Moon

Together:
Mother and Child Reunion

Paul Simon solo:
50 Ways to Leave Your Lover, Dazzling Blue, Graceland, Still Crazy After All These Years, Me and Julio Down By the Schoolyard

Together:
Fragile

Sting solo:
America, Message in Bottle, Hounds of Winter, They Dance Alone, Roxanne, Desert Rose

Together:
The Boxer

Paul Simon solo:
That Was Your Mother (aka The Zydeco Song), Hearts and Bones / Mystery train / Wheels Medley, Obvious Child, Diamonds on the Soles of Her Shoes, You Can Call Me Al

Encore Together:
Late in the Evening, Every Breath you Take, Bridge Over Troubled Water

2nd Encore, sans bands.
When Will I Be Loved – Phil Everly

That’s Billion, With a B

February 19, 2014 / Andy

Facebook just agreed to buy WhatsApp for $16 Billion. That’s one billion, this many times:

Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion

When you add the other Billion Billion Billion for current What’s App employees, it comes to $19 Billion.

Just for fun, let’s look back at some previous tech acquisitions you may have remembered:

Amazon buys Zappos. Sale Price: $1.2 Billion. Year: 2009
AOL buys Netscape. Sale Price: $4.2 Billion. Year: 1998
eBay buys PayPal. Sale Price: $1.5 Billion. Year: 2002
eBay buys Skype. Sale Price: $2.6 Billion. Year: 2005
Yahoo buys Geo Cities. Sale Price: $3.6 Billion. Year: 1999
Yahoo buys Broadcast.com. Sale Price: $5.7 Billion. Year: 2001
Microsoft buys aQuantive. Sale Price: $6 Billion. Year: 2007
Oracle buys Peoplesoft. Sale Price: $10.3 Billion. Year: 2004
Facebook buys Instagram. Sale Price: $1 Billion. Year: 2013
Google buys YouTube. Sale Price: $1.65 Billion. Year: 2006
Google buys Double Click. Sale Price: $3.1 Billion. Year: 2008
Google buys Nest. Sale Price: $3.2 Billion. Year: 2014
Google buys Waze. Sale Price: $.96 Billion. Year: 2013
Google buys Wildfire. Sale Price: $.45 Billion. Year: 2013
Google buys Motorola Mobility. Sale Price: $12.5 Billion. Year: 2011

For one thing, it’s fun to look at what deals happened right before bubbles. It’s also fun to see that some of these deals look like bargains now, while some were just busts.

So give or take a billion or so, Google ended up with Nest, Waze, Wildfire and Motorola Mobility for the same price Facebook got Instagram and WhatsApp. Time will tell where the money was better spent.

Another way to analyze the deal is on a cost per user basis. From what I have read, WhatsApp has 450 Million Monthly Active Users (MAU). So at $19 Billion, that’s roughly $42 per user. Obviously Facebook thinks the lifetime value of each user is more than $42, which certainly seems reasonable. So from that angle, disregarding all other benefits of the deal (synergies, defensive play, talent, etc…) it could make sense.

So what about Snapchat? We all scoffed when Snapchat turned down $3 Billion from Facebook, wondering how they could think they were 3x as valuable as Instagram. Well, I can’t tell what this means for them. Certainly they are worth more than 16% of WhatsApp, aren’t they? Or is there enough overlap between WhatsApp and Snapchat users that they just saw their entire market value dry up? Again, only time will tell.

But $16 Billion is a lot of money no matter what. I think we are all on bubble watch now.

We’re Going To Be Insufferable and We’re Not Going to Apologize For It

January 30, 2014 / Andy

There’s a football game this Sunday that is kind of a big deal. A team from Seattle and a team from Denver are going to fly to New York to play it. Our fans – well the ones who have gajillions of dollars to spend on such things – are all flying out there. The two best teams, in the biggest sport in America, will play on the grandest stage in the world, in the middle of one of the most important cities on the planet.

If we win this game, Seahawks fans are going to be insufferable. And we won’t care.

We’re the city that had the best team in baseball history, yet lost to the hated Yankees in the playoffs. We had our beloved basketball team stolen from us by a spoiled rich guy who married into money. We had possibly the 2nd best team in the history of the NBA, only to have the bad fortune of facing – and losing to – the BEST team in the history of the NBA in the Finals. We lost in our only other Super Bowl appearance because of some dubious officiating that we still complain about.

We need this. We deserve this. We’re going to win and we’re going to gloat about it. We have been the whipping boy of professional sports leagues. When we win, we’re not going to do it classy. We’re not going to be gracious. We’re going to shove it in everyone’s face. We’re going to use the comeback, “Beast Mode” the same way a 6 year old says, “I know you are but what am I.” We’re going to make Richard Sherman the most Googled athlete in America. We may even petition to have the proper spelling of the word changed to “DangerRuss.”

If we lose this game, Seahawks fans are going to be insufferable. And we won’t care.

We’re somehow facing the greatest quarterback in the history if the NFL, in his greatest season, on his brother’s home turf. How messed up is that? The world is rooting for Peyton. If we lose, it will be due to some horrendous call. We already know that. Some pass interference call that only Peyton gets.

We’re going to complain, we’re going to scream. We’re going to have polls about who we hate more, the Broncos, Steelers, Thunder or Yankees. We’re going to overload every comment thread and forum with how much we got screwed. How Eli walked yard by yard with Peyton to explain how the crazy winds work in the Meadowlands. How the NFL needed a feel good story in their worst PR year ever. How the real gods and football gods conspired to get back at Pete Carroll for his USC misconduct. We already know why we’re going to lose, and we won’t be shy about sharing it.

God I hope we get to be insufferable winners…

A Walk Along The Paths of Ecstacy

January 20, 2014 / Andy

The Seattle Sports fan is used to a swift kick in the teeth. Sit in a bar and throw out any year and watch them recount the travesty or tragedy of that particular annum.

2001 -“How did we lose to the Yankees?”
2012 – “Freaking Falcons, man.”
1998 – “How did that UConn guy – what was his name – hit that shot?”

You can play this game with every year. Just don’t expect to be invited back out again.

And man were the chairs aligned yesterday for this to become one of the most debilitating moments in Seattle sports history. Our big brother San Francisco, coming into our house, a place where we embarrassed them 3 months prior. They had all their starters back, we were missing some of our stars to injury and suspension. We have the lead. We’re inches from the Super Bowl, and suddenly they have the ball on the 25 yard line with all the time in the world. They’ll have 4 or 5 shots to get in the end zone and just crush our will. If you hit pause on life at that moment, I would wager that most fans had already started to think about how they were going to deal with this bone-crushing loss.

And then something amazing happens. The Stanford guy – the import who now who would rather be in Seattle than the Bay Area – makes the play of his life. Seahawks win. Seahawks win. Cue the pandemonium.

I spent hours walking around downtown after the game. I listened to the horns blare up and down 1st Ave. Every bar had “We are the Champions” blasting every 3rd song, with a few versions of New York, New York thrown in for good measure.

To my surprise I saw more than a couple stunned 49ers fans standing on street corners by themselves. They were graciously congratulating jubilant Hawks fans. It was a sign of a fan base who has had enough success to know how to lose as well as win. I surmised that these people were lifelong San Francisco fans who knew what it meant to Seattle fans, and were dealing with their mourning by watching other people be ecstatic. Maybe it was a bit of comfort for them – to see others experience what they had first enjoyed years – maybe even decades – before.

I saw people in bars not knowing what to do. They hugged, they ordered a drink, they watched the replays on TV and….. now what. Some kept drinking. Some went home. Some just wandered the streets.

But what I observed was honest to god ecstasy. People loved the moment they were in and loved loving the moment they were in. They had no idea what to do in it, but all they had to do was smile and feel good. Whatever life struggle they had was forgotten. Whatever uncompleted task on their “to do list” was ignored. People were happy. Truly, magnificently happy.

It’s irrational and can never model out on an economist’s spreadsheet. But that happiness was good for this city. It might manifest itself as a business owner being more motivated to succeed, or a sad person remembering what it’s like to smile, or a group of friends remembering how much they enjoy being together. But combine all of these moments together, across the city, and you see that our fabric is stronger for that moment.

2014 – “That freaking Sherman play was AWESOME!”

Why Start-ups Shouldn’t Pretend to Recruit Agencies

January 16, 2014 / Andy

In the Entrepreneurial Marketing class I teach at the UW, we talk about how start-ups need to be scrappy with their money. Without aa lot of money to spend, we need to make every dollar stretch. We talk about the fact that we often can’t afford to hire an agency.

One of the ways to temporarily sidestep the need to hire strategic services from an agency is to look at campaigns you find compelling, and model your own plan after them. If you’ve noticed a company, it may be possible to reverse engineer their thought process (or their agency’s) and generate similar success. Emulation is a form of flattery.

However, one thing we DON’T advise students to do is “pretend” to be hiring an agency, send out a bunch of RFP’s, and have them do free work for you. Yes, this seems like a scrappy thing to do. Submit your problem and solicit proposals and ideas from 10-20 small to mid-range agencies. You’ll get a few hours of free consulting and brainstorming from each one, and get to form an overall strategy out of the ideas you like best.

Your VC and investors may think this is a fabulous idea. $10,000 in free consulting is a huge win, right?

But I’d argue that long-term (and even short-term), you can do your brand a pretty large disservice when you do this. Here are a few reasons why:

As a Start-up, your plan is going to involve Influencers and Thought Leaders. When an agency tells you they can recruit “Thought Leader X,Y and Z,” they are saying they have a personal relationship with them already. When you get free work from the agency and then tell them you aren’t hiring anyone, you’re not creating a neutral relationship with the agency world, you’re building a negative one. These Thought Leaders you need to recruit will already have heard about what kind of company you are from the people whose time you wasted.
When you become successful, you will get a larger VC round and have more money to spend on marketing. Then you really will have a budget in which to hire an agency. But this time when you send out your RFP’s the good agencies will remember how you treated them in the past and decline to participate. Yes, you will get responses to your RFP, but you’ll be getting them from companies that need the work. You want to hire agencies that turn down work, not the ones who can’t keep it.
You are going to work at other companies in your career. When you are a junior person and your CEO sends you out to burn a bunch of cycles from the agencies, he/she is sending you on that mission so they don’t sully their own name. We agency people are horrible gossip hounds. We’re going to share stories about the person who sent us on a wild goose chase.
And finally, it’s just not good start-up karma. Most agencies are like little start-ups. They have to be scrappy themselves to go get the next piece of business. They have to balance how much staff to have on hand because they always either have just a touch too much work or a touch too little. Their teams are usually either overworked or worried they are going to be laid off. So it’s just bad to make these people do free work for you. As a start-up, do you want to have customers with no intention of buying your product to burn your salespeople’s time? No.

So start-ups of the world, I suggest you resist the urge to get free work from people under the guise of an RFP. If your CEO and VC are making you do this, pause and think what kind of nefariousness they are committing themselves. Is that the kind of company you want to hitch your star to?

Biggio vs Jeter

January 8, 2014 / Andy

Imagine if Craig Biggio played for the Yankees his whole career:

Craig Biggio: 2850 G, 3060 H, 1844 R, 668 2B, 291 HR, 414 SB, .281 BA, .791 OPS, Played C, 2B and OF
Derek Jeter: 2602 G, 3316 H, 1876 R, 525 2B, 256 HR, 348 SB, .312 BA, .828 OPS, Played SS

Biggio always had to be one of the best hitters on his team. Jeter always had $150-200MM of payroll surrounding him.

Jeter will be 1st ballot Hall of Famer. Biggio will have to wait again for next year.

Poor guy.

The Importance of Your Talents vs Your Resume

January 6, 2014 / Andy

I’ve been doing more thinking recently about the role a resume (or LinkedIn Profile) plays in your job search. What is the perfect blend of connections, qualifications, overall talent and past experience?

Coincidentally, today Forbes released its annual 30 under 30 lists. Highlighted in the Marketing list is Seattle’s own Andrew Dumont. This inclusion did not surprise me in the least. It’s a great honor and well deserved.

Andrew_Dumont_Forbes It reminded me of the time I first met Andrew. I was a Principal at another social media agency at the time, and no less than 3 members of the team said, “You have to meet this guy. Super bright.” I was curious why his resume never made it to my desk despite everyone having such great things to say about him, so I inquired.

Our Office Manager was the gate keeper for incoming resumes. This person had certain skills and an ability to color inside the lines, but little ability to do any creative or lateral thinking, and sometimes even struggled if forced to make a decision on which crayon to choose. It turns out a hard and fast mandate had been implemented, “No college degree, no interview.” So despite Andrew’s entrepreneurial successes and social media prowess, our gate keeper would not allow us to talk to him.

But too many people told me I had to meet Andrew, so I chose a day when the gate keeper was on a holiday and invited the 20 year old in. It became clear within 30 seconds that we couldn’t hire him – we’d just never be able to afford him. I knew what we paid our junior team members and he was worth 2-3x that. I knew we’d never be able to make the numbers work, but I was really glad my colleagues had made the introduction.

Years later, I’m an old guy who pays attention to Andrew’s successes and tries to learn from him. It doesn’t matter if I have more experience – he’s the one wearing X-ray glasses that cut through the clutter and can see the future. But not only that, he makes time to support the Seattle start-up community. I’ve been able to interview him for a couple of panels, and he’s supported my class at the UW whenever I’ve asked.

So tying this back to the original topic: Talents vs Resume. A good HR person is recruiting talent that can add value to the future of company. And the easiest scorecard or scouting report to read is a resume. But a resume is usually just a recap of the past. It is not necessarily a predictor of future events. The HR person wants to see what your talents are, and if those talents translate into something their team needs. So you had a job at big company X. That’s great. It shows you can get a job. But what talent did you bring to the team? How much did the team win? What else did you learn while you were there?

Some people have outstanding talents that have never been showcased in a professional environment for whatever reason – bad managers, shrinking industry, crisis management, etc… Some great strategists spend their early careers putting out fires instead of planning the company’s future. But you have a ton of non-resume opportunities to showcase the talents you can bring to a company. Writing, volunteering, starting side projects, mentoring, being mentored, etc…

In a nutshell… When I met Andrew he was clearly talented, and we had an Office Manager that discriminated against him for not having the right resume. I’m sure we weren’t the only ones. But then there were other companies that evaluated his potential, not his past. And now he’s in Forbes as a 30 under 30 winner.

Moral of the story: Managers – Look for the talent, not the resume. Job seekers – Showcase your talents and don’t let a resume hold you back. This equation adds up to the right HR people hiring the right young talent. And companies full of talent and potential are the ones you end up seeing on CNBC.