How FestivalPass CEO Ed Vincent grew FestivalPass to $5.7M revenue and 200 customers in 2024.

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is ed vincent he's an entrepreneur with over 20 years of business technology and management experience having founded and exited several companies in that time including helping to launch film festivals in multiple locations and creating the concept for a maxim branded hotel in the caribbean he's a former head of data at moviepass now building something called festivalpass.com are you ready to take us to the top i am let's do it all right by the way why move on from moviepass a lot of people would say that thing was a rocket ship you just figured you learned everything you could yeah i was i was a contractor brought in to help them with their data and um moviepass has an interesting story in itself for the good or the bad i think a lot of people know some of the good and some of the bad all right let's go to festival pass what's the company doing what's the revenue model is it per place ass sure no it is a subscription marketplace um so so uh different than when you think of marketplaces in general a lot of people think of the ubers and airbnbs and postmates and other other type of two-sided marketplaces and when we think of festival pass it is a two-sided marketplace you have the consumer and then you have the event owners the rights holders that have a lot of these live events um in the festival space music film food and wine tech and innovation and both sides of the marketplace need to be fulfilled okay so tell us what you do for both those sides so what do you first off who's paying you more are the consumers are the festival organizations yeah so it's uh it's a consumer play right so consumers pay a monthly fee and for that monthly fee they get credits they can then use those credits to attend thousands of live events throughout the country okay uh what do you do for the festival organization um so for them uh it's it's a a couple pieces to it the the number one piece is additional distribution so the ability to allow our members to be able to attend their events is is the first the second uh coming from a very stringent string is the wrong word very a robust data background um i really understand the whole consumer data play especially in the entertainment space and what i find is outside of the very big players in the live event space the live nations of the world and a few others um data is is a little disparate um only one in ten uh in venues most venues they only know one in ten people in the audience interesting okay do the festival organizations pay for this or it's just the consumers paying uh the consumers are paying the festival uh the festival owners are sharing revenue with us uh in the form of a discounted access to to the event okay so let me try and get a real example here just to make sure i understand um name a festival that works with you coachella uh good example coachella soon at some point will uh so we're talking to some of their parent companies they're not on board yet um think of south beach food and wine southern beaches and wine big hundred thousand person festival every year in february okay so what do they charge for a ticket like direct on their site yeah and it's hard to get the exact dollar amount because they have over a hundred different mini events within the overall big event some are fifteen dollars some are two hundred dollars some are three hundred dollars and that that really plays into why the model for us makes a lot of sense we look at it as a gross margin economic uh union economic model so um people on the show yourself would probably be familiar with how class pass works have you ever seen how class pass works and what they did well and one thing we learned from them is building a credit-based system allows us to manage for gross margin positive unit economics okay so let's try and run an example here let's just say the south beach food and wine ticket is a hundred dollars you use your consumer play to sell one of those tickets what will south beach wine pay you on the 100 ticket sale yeah so our average gross margin across all events i'm not going to specifically talk about each event is we target at 30 gross margins so in theory across the board if it was 100 ticket we'd be paying the event 70 and we'd be keeping 30 dollars um that margin then allows us to maintain how we put it to the customer and how at what price we want to offer it to the customer okay got it let's go back to the flip side of this and put this on a timeline real quick when did you launch the company what year uh just last year so so this is it it's still early stage like 2019 or 2018. 2019 we're still in the very beginning stages um but what having all the background i have and having an experience i've had with other models that are similar um we've been able to kind of jump start the process in terms of really uh getting involved with some of the big players so right good no no i didn't mean to cut you off i was just going to try and get a sense of on the consumer side are these like college students or young professionals or like older folks going to festivals how many what are they spending per month on credits on average so great great conference great question so um i'll tell you about the pricing and then i'll tell you the target audience so on the pricing side we have packages that go from nine dollars a month to 29 a month 49.79 and 99 a month so for each of those different price points you get a certain amount of credits obviously the more you commit to on a monthly basis the cheaper per credit price you have therefore you attend events more cheaply um in the uh on the targeting side um when we think about we're crop we're the only festival subscription service that's across the genre so we have music and film and food and wine tech and innovation eventually we'll have sports and other kind of concert events and other things but uh when you have that cross section we will eventually hit different target demos of course millennials have tended to be uh the the focus of our of our uh go to market because of the fact that they'll spend more of their consumer dollars on experiential uh activities than they will on hard consumer goods um 75 million millennials in america and north and in north america as well um it's that's the path that they choose to spend their discretionary dollars however when you think of food and wine you think of something like south beach or aspen food and wine or veil food and wine or new york food wine you're talking about slightly higher not not that millennials don't go to those as well but uh it tends to skew a little older where you have 40 50 60 year olds uh happily attending these major festivals throughout the country so your economies of scale look something like this at a nine dollar a month plan for six credits called a dollar fifty per credit you get all the way up to scale at 100 bucks a month or 99 it's basically a dollar per credit is that do you think you're going to change that kind of arbitrage spread over time will your per credit pricing come down or is that really what you're going to stick with for a while yeah i think we'll stick with that from a business perspective what gets really interesting about this whole credit model and i'm still shocked that more marketplaces and subscription businesses haven't adopted it and i give class pass a lot of credit for for pioneering the way is uh what it allows for is it really builds in a reverse dynamic pricing process so we don't have to change the per month fee we don't even have to change the per credit fee what we can play with is using data from hundreds of data points to be able to identify what is the credit cost of an event so you who might tend to go to music festivals at average 50 per you know per festival or use that example you know somebody else might um actually prefer food and wine festivals at a 200 per ticket typical uh concept i'll know over time what is my lifetime value of you as a customer i'll know um how much i want you engaged in in the activity and i may choose to offer the same event to you for slightly different in credit pricing than i might somebody else based upon all your behavioral aspects yeah and just to be clear so i mean at someone that buys a hundred credits from you right for a hundred let's call it a hundred bucks make the math easy that then uses that on the food and wine festival that we just talked about you're essentially making you know 30 cents per credit right effectively that's the goal yeah correct well what i'm saying is when you have a any kind of um super popular festivals that are typically going to sell out anyway it's unlikely the rights holder is going to give us such a large discount to drive that however if you if you look at the collection of thousands of festivals...