London Business School
This is two-case series discusses some of the key marketing decisions faced by Eric Baker and the rest of his management team immediately before and after the launch of viagogo in the United Kingdom and other European markets. viagogo is an on-line marketplace where sellers and buyers can exchange live event tickets (sports, entertainment, etc) in a legal and secure manner. The underlying business model replicated the one introduced by StubHub in the United States, a company founded by Eric Baker and a fellow Stanford MBA a few years earlier. The first part of the case is set in June 2006, just two months before the official launch of the website. At that time, the case protagonists faced important decisions with respect to the company’s revenue model. In particular, they had to determine what level of commission to charge, how to split this commission across sellers and buyers, and what pricing mechanism(s) to use (ie, fixed price, auction, and / or declining price). Eric was also considering a potential partnership with a major football club in the UK. A deal was expected to generate considerable exposure for viagogo but, on the other hand, required significant investment and likely constrained the company’s promotional options. The second part of the case takes place in early 2008. Following a brief review of viagogo’s initial performance, a series of new challenges are introduced: (1) how to deal with increasing competition; (2) how to improve the general perception of secondary ticketing in the marketplace; and (3) how to scale the business up from start-up to middle-sized enterprise. Overall, the case highlights common challenges when launching a new business venture. It also questions the common belief that a successful business model in one country can be easily replicated in another. Finally, the case allows for a discussion of how business models tend to change as industries ‘mature’ and new opportunities arise.