Built To Enjoy: Andrew Fox’s 100% Owned $30M ClubPlanet (Part 3)

SM: What was the next major evolution in the business?

AF: Guest lists were very hard to quantify. The nightlife business is very fragmented, and is very much a vanity business for a lot of people. The mechanism of the guest list was an honor system. The clubs prepaid me an amount of money to have the guest lists up and running, but if I hit over a certain amount of people then I was supposed to receive a higher payout.

I started looking at the clubs and realized I could never scale the business if I relied solely on their being honest with me regarding the attendance that I actually delivered. That is when I began doing tickets to the clubs. Everybody thought I was absolutely crazy that I would even think people would be willing to buy a ticket to get into a club. It was like making a reservation, but pre-paying to do so.

That was the real pop in the business, however. In 2002 we did $300,000 in ticket sales. In 2003 we did about $1 million. In 2004 it grew to $2 million. In 2005 it grew to $8 million and in 2006 it grew to $10 million. Consumers appreciated it because it guaranteed attendance. Clubs liked it because we were giving them their first ever accounts receivable. We gave them a predictable method to touch their consumer.

SM: How far in advance were consumers willing to buy the tickets?

AF: Today we see that the vast majority, 80%, are spontaneous purchases. That means they were purchased the week of attendance. It is not like going to a Broadway show where you think three months in advance. What you are buying is prepaid admittance and the guarantee that you don’t have to wait in line. That guarantee is valuable enough in most major markets.

That established us as the first mover in the space. We have the largest nightlife presence on the Internet. I also think it is the dream job. I happen to love music and being out. There is not a better opportunity to do something you love than what I am doing. I think like is short and fragile, so I want to do something I love.

SM: How many people work for you now?

AF: There are forty-six in New York, fourteen in LA, seven in Montreal, four in Las Vegas, and two in Miami. Overall we are around 65 people.

SM: Do you have to have people in all the markets you cover?

AF: We have regional representatives in all of our regional markets. That is because the business model is one where we must be relevant to our customers. They must see our faces. In order to maintain our relevancy they must see our faces. The people who work for us are not selling our product as much as they are selling our influence.

Our regional managers are taking care of customers. They take care of opportunities that take care of themselves in various markets. We will do north of 1,000 events this year. Those events are done in those markets and they enable our regional reps to not have to scramble. They are there all the time. Our reps are young and also doing something they love. We joke that we get paid to go out.

This segment is part 3 in the series : Built To Enjoy: Andrew Fox's 100% Owned $30M ClubPlanet
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