October 2012 - Teletimes

Laura W. GellerLessons from the E-Commerce WarsAs budgets tighten, manyexecutives face questionsabout how to grow theirbusiness? In the boomingworld of e-commerce, suchquestions are coupled witha need to stand out fromthe crowd. Entrepreneur JimMcCarthy has been on thefront lines of these decisionsfor 15 years. He cut his teethin tech startups, learningfrom both failures (onlinecalendaring venture Kiko Inc.)and successes (GeoCities, soldto Yahoo in 1999). Today, ascofounder and CEO of GoldstarEvents Inc., a privately heldhalf-price ticketing website,he’s found answers by forginga strong connection with thesite’s members. Getting toknow his customers — whatthey like, what they dislike, andwhat they might like — is keyto Goldstar’s business model,and drives its innovationprocess.When the startup launchedin 2002, the economy was inrecession and e-commercewas still reeling from the dotcombust. Today, Goldstar hasmore than 2 million registeredusers and has establishedpartnerships with thousandsof venues around the country.Although relatively small— the company sold aboutUS$50 million in tickets in2011 — it is growing rapidly,Entrepreneur - Jim McCarthy onwhy online innovations succeed — or failand forecasts that its saleswill grow by more than 50percent this year. Jim McCarthytalked to strategy+business inFebruary 2012, Goldstar’s 10thanniversary.Q: You’ve worked ine-commerce for 15 years, andhave seen highs and lows.What are some of the keylessons you’ve learned?A: One of the things that I’vecome to believe strongly isthat many people claim tohave expertise in a lot of areas,but the entrepreneur is in thebest position to evaluate whatworks or doesn’t work for hisor her company. Great peoplecan be very helpful to you, butthey can’t replace you as theentrepreneur when it comes tothe big decisions.You also can’t be taken in bythings just because everybodyis doing them. Otherwise, yourisk pouring huge amounts ofmoney into efforts that won’twork.I’ll give you an example, basedon something we learnedabout Twitter. Our firstimplementation of Twitterwas traditional; followerscould interact with us, andwe would editorialize. Thataccount is still active, and it’sfine. But we figured out thatmany heavy Twitter users justwant information. We createdautomated feeds for differentcities, such as @GoldstarLA.Nobody here touches them,we just take the data as anew event or new dates forevents come onto the site,and it automatically goes intothe feed for each city. Userscan sign up for a feed for theircity, and every time there’s anupdate on our site, they geta tweet with a link. Those aregreat links for generating ticketsales, and it’s very easy. Werealized that we didn’t haveto hire a team of people tofill @Goldstar with crazy, funcontent.I think the bigger point is,it’s possible that not usingTwitter would work for a givencompany. That’s not to saythat you shouldn’t try things ortest things or explore things,but entrepreneurs shouldhave the courage of theirconvictions about what they’velearned. It’s hard to do that inthe face of pressure, and if youhave investors, they can putpressure on you, too. You haveto resist it and do the thingsthat are best for the companyand for its customers andemployees. You can constantlychase whatever’s shiny, butentrepreneurs only have somuch mental bandwidth, soyou have to use it in the rightplaces.Q: What drives your decisionsabout innovation and growth?Jim McCarthyA: Innovation is really onlyinnovation if it serves a needthat customers have or givesthem something they want.Our job is not to find buyersfor our tickets, it’s to findtickets for our buyers. Ourinnovation process revolvesaround evaluating what we’redoing for our members andthen figuring out what we’renot doing as well as we couldbe. Sometimes those kinds ofinnovations are really simpleand other times they’re moretechnical. But they always startwith the customer.For example, early in ourbusiness, we started sendingout an e-mail to buyers afterthe event they purchasedtickets for had happened, tosee how it went. We were thefirst company I know of to dothis. We wanted to make surethat people were having aOctober 2012www.teletimesinternational.com41