IAM worried about the Olympics.” Joe Cohen, the founder and CEO of Seatwave, leans forward to explain. “They are capping the cost of all the tickets at face value, which is a stupid idea. It’s simple economics that whenever you have a situation where demand exceeds supply and you have a price cap, a black market is created,” he sighs. “It is just going to open millions of people up to being ripped off.”
“I’ve tried campaigning against it, I’ve even made suggestions on how to prevent it. But there’s no political will to push for a safe, transparent, floating price exchange. It’s like live entertainment is the last industry where it is wrong to make money from solutions.”
Cohen’s business, Seatwave, could offer the Olympic solution. The company is an online secondary ticket exchange that provides a safe and transparent way for people to buy and sell tickets to major events. It displays all the different tickets on sale in comparison to one another next to a map of the venue. “I’m trying to create competition between sellers and allow users to develop a price mechanism.” Seatwave tries to reassure its customers by making those selling tickets provide their card details and sign a pledge saying that they own legitimate tickets and will deliver them to the buyer on time. If not, then they are liable for the cost Seatwave pays to obtain the buyer a ticket.
A DREADFUL EXPERIENCE
Cohen explains that he started up the site because he had a dreadful experience in 2005: “I wanted to go to this big American football game with my Dad and two friends. I was living in the UK, so I thought if I was going to go all the way to the States, I wanted a good seat.” But the only way he could get hold of these tickets was to bid on eBay. He tracked down four tickets next to each other, but they were being sold in two blocks of two by the same seller. “We really needed them to be all together,” Cohen explains. So he and all his friends were determined to win and all bid for them. His friends won, paying $1,100 for each ticket. “It was a dreadful consumer experience, made so much worse by the fact the next day I got nine emails from people claiming to be the winning bidder, offering to sell their tickets to me. It was absolute fraud.”
Cohen had been working for the UK division of Match.com at the time. His wife had just had their third child and they had recently bought their first home. “I sat on the idea for Seatwave for a while, but I couldn’t get it out of my head.”
With a handshake agreement for funding from a venture capitalist, Cohen quit his job and started Seatwave.
“I don’t want to make what I do sound easy, it’s not. It’s really hard, but I don’t have to convince people to want to go see Justin Bieber. They want to do that already. That’s why it’s a great business model, but it got a really violent reaction from promoters and venues, and ticket managers.” Cohen says.
“Within the industry there is still this notion that if there’s any money to be made above the face value ticket price then it should be made by those inside the venue or show. Anyone else and then there’s an ‘ethical issue’.”
Cohen said the exchange is already improving the market. Over the last three years the average price of a ticket on the exchange has dropped to only twice the original face value of the ticket. “The visceral reaction I’ve got from those in the industry made me realise that I’m on to something.”
CV | JOE COHEN
Job title: Founder and CEO
Born: Cleveland, Ohio, USA
Studied: “I flunked out of four universities and never finished.”
Motto: “It's not the size of the dog in the fight, it's the size of the fight in the dog."
Drinking: Patron Silver tequila
Reading: "Wikileaks" by Luke Harding
Idol: Jeff Bezos
Talents: “I make a mean grilled cheese sandwich.”
Favourite business book: Leadership Secrets of Attila the Hun by Wess Roberts
First ambition: Documentary maker
Awards: GP Bullhound Media Momentum Awards, 2009; Fast Growth Business Awards, 2009; Tech Media Invest Awards