TicketSwap: The primary marketplace for secondary tickets
Marketplace startups are all the rage. The golden formula:
- Find a market that’s just begging to be conquered by a marketplace
- Build a good platform to buy and sell on
- Become the de facto place where supply and demand meet
- PROFIT!
It’s easy to see why one would want this. Once established, the revenue model of asking a % of each sale is extremely scalable. Inventory management? None of your concern. Determining prices? The market will fix that for you. Customer retention? Well — where else do they want to go to now that everyone’s here? Heard about a rising competitor? Just tell them they can kiss your network effects.
Indeed, for many aspiring entrepreneurs, this would be the dream. For TicketSwap though, building the perfect marketplace was just the beginning. Their next feat? Solving an unsolvable problem in the music event industry.
TicketSwap is a marketplace from the Netherlands where customers can buy and sell second-hand tickets for music events. Let me take you through the two acts of their play.
Act one: Building a brilliant marketplace
What makes a good marketplace? Let’s consider that formula again:
1. Find a market that’s just begging to be conquered by a marketplace
What kind of a market would that be? Answer: one where the current way of trading suffers from significant problems that can be remedied by a single point for buying and selling. For instance, markets where
- sellers are numerous, small, and/or informal and thus hard to find
- sellers’ supply is only situational and thus hard to find at the right time
- there’s no standard way of offering and buying products, making trading inconvenient
- sellers and buyers have no way of building trust or paying securely, inducing fear of being scammed
As a music festival enthusiast, oftentimes my favorite festivals are sold out, leading me to the secondary ticket market — and boy, does that market check the above boxes! Even if I’m lucky enough to find a potential seller through a time-consuming process of asking, Googling and Facebook-event-page-ing around, I’m still wondering: who am I communicating with? How will we handle payment? Will this person actually send me the ticket after paying? And even if they do — who says they won’t still use it themselves, rendering my copy invalid? Indeed: it is only at the very moment my ticket is scanned that I know whether I can go on to party, or have to return home and cry over the money I lost. A stressful and messy experience.
At the seller’s side, things aren’t much better. Sellers are less likely to be scammed, but their search for buyers is just as inconvenient. In addition, it’s hard for them to determine the right price. As they have no way of knowing the demand, out of fear for not selling at all, they may ask lower prices than necessary.
So there’s TicketSwap’s opportunity. Now for their solution.
2. Build a good platform to buy and sell on
When is a platform ‘good’ in this context? Answer: when it remedies the aforementioned problems.
TicketSwap solves the first problem — that of buyers and sellers being mutually hard to find at the right time — simply by existing as a marketplace. This is obvious: I no longer have to find a seller, and the seller no longer has to find me. We both asynchronously go to TicketSwap, and as long as it has its basic functionality in place for offering and searching tickets (which it does) and doesn’t make any blatant mistakes in the user experience department (which it doesn’t), that’s taken care of.
The more interesting challenge is in the second problem: that of establishing trust, both in the process and in the person I’m trading with. A small step in the right direction is that TicketSwap handles the payment, alleviating the ‘who hands over first’ uncertainty inherent to direct consumer-to-consumer trading. But the main challenge still stands: regardless of how well the platform is designed, in the end, the success of a transaction depends on factors out of TicketSwap’s control — the correct and faithful listing of the offered ticket, and the seller not using the ticket after selling it.
This problem is common to many marketplaces. Airbnb, for instance, ultimately depends on whether their hosts actually provide what they say they’ll provide. Although it can never be perfectly solved, in my view there’s two things a platform can do:
- Against malevolent sellers: have a reputation system in place.
- Against benevolent but incompetent sellers: make it extremely hard for them to screw up by streamlining the product.
TicketSwap nails both.
The reputation system is simple and effective. It clearly presents data contributing to seller credibility (amount of tickets sold, phone number verified, picture, full name, coupled Facebook account and amount of friends). When an event for which I bought a ticket is over, TicketSwap sends me an email with two clickable buttons: ‘yes, the ticket worked’ and ‘no, it didn’t work’, making peer reviewing effortless. Nothing we haven’t seen before, but it works.
As I think it is particularly exemplary of their effective design style, it’s the streamlining I want zoom in on. TicketSwap achieves it through a butter smooth UI, automated checks and crystal clear communication. Let’s go through the steps I need to take if I want to sell a ticket.
I look up the event I want to sell for. To prevent double or incorrect listings, TicketSwap maintains its own database of events from which I have to select. This would be infeasible for many marketplaces, but music events are relatively few, and their information is easily accessible.
I can add a new event, if I need to. If I do, I get clear instructions on how to provide the information, such that TicketSwap’s backend can easily verify it. But this option is less prominent; users are nudged towards selecting an existing event.
While the seller may not even be aware of this, events often have various types of tickets. Getting the ticket type right is crucial for a successful transaction. TicketSwap prompts me to select the type in a screen I can’t skip, so I can’t overlook this. Again, I have to select among a predefined set.
I now upload the pdf ticket. I can only upload the original pdf file. Even if that file contains multiple tickets of which I only want to sell a couple, TicketSwap insists on handling the splitting, minimizing the risk of user error (and sparing the user a cumbersome task).
Should I upload a wrong pdf, then TicketSwap detects this. Instead of simply preventing me from continuing, it conveniently offers me to change the listing to the detected event.
Similarly, should I upload the same ticket twice, then TicketSwap will detect that and prevent me from selling it a second time.
If successful, I mark the tickets I don’t want to sell (if any). Finally, I decide on the price (not pictured). TicketSwap clearly shows the amount I get on a sale; the amount the buyer will have to pay; and the fee TicketSwap receives. It also shows the prices for which this ticket is currently on offer, allowing me to tweak the price.
When the listing goes live, TicketSwap makes sure I know exactly what will happen going forward, and what I should and shouldn’t do.
Afterwards, I can review, retract or change my listing. I can also download the split tickets that I didn’t want to sell. This way, TicketSwap discourages me from taking the original pdf with me to the festival as to prevent me from accidentally using the sold ticket to get in.
Through the straightforward interaction design, TicketSwap ensures I submit the right listing. By communicating friendly but clearly, I know what to expect and what not to do. And by incorporating automated checks, I can’t accidentally mix up files. Clearly, unless I’m actively trying to do so, there’s no way I’ll screw this up, even if I’m not that tech-savvy.
This is just one example of how TicketSwap applies its user experience paradigm throughout the platform — the other standard marketplace features are there too, and equally well-designed. With that, we have the base: a good platform that solves an otherwise painful process for both buyers and sellers. All set for the formula’s next step…
3. Become the de facto place where supply and demand meet
The first time I used TicketSwap was for selling, and I remember it fondly. I had bought tickets to a highly anticipated festival for me and a friend. When the day finally came, right after hopping in the car that morning, my friend called in sick. The ticket was expensive, but judging from my experience on the old-school secondary ticket market, I knew I would have no chance of selling it in time. Then I remembered someone mentioning TicketSwap. It was actually while waiting in line for the festival’s entrance that I had some time to kill and decided to give it a try. I downloaded the app and expected a cumbersome process, but before I knew it, the listing was live. I passed through security, entered the festival, quickly forgot about it, and started exploring the venue. Later, I checked my phone:
It’s weird to say this about what’s essentially a chore unasked for, but not only was this sale more convenient than anything I’d experienced before — it was almost fun to do. I think I told at least four other friends about my experience.
A good platform and an initial mass of users may get some business going, but consolidating the market requires retention and continued growth. Various things may contribute: significant marketing investments, user lock-in, referral programs, habit forming, etc. The most beautiful way, though, is through sheer product greatness. A good product is one users don’t mind using, but a great product is one users insist on using, actively encouraging others to do the same.
In the above, I’ve only covered some of what TicketSwap has to offer. Other smart features are one-click posting of ticket asks and offerings on user’s social media (which of course proved helpful in spreading the brand) as well as the option to get a notification upon certain tickets becoming available. It all blends in well with the core offering and is designed and communicated in the same thoughtful way, creating blissful moments for users.
Anecdotally, recently a friend stumbled upon a secondary ticket offering the old-school way: on a Facebook event page. When he reached out to this person, they quickly agreed to proceed through TicketSwap. They were well aware that would occur an additional cost, but they thought it was worth it: to them, TicketSwap just felt like the definitive way to trade.
By exceeding expectations and maintaining product greatness over an extended period of time, TicketSwap organically grew to be the de facto marketplace for secondary tickets in The Netherlands, and set on to expand to other countries on its path to — you guessed it:
4. PROFIT!
Act two: Solving the unsolvable problem
So far, we’ve seen TicketSwap identify a consumer need, catering to that need with a marketplace, and winning in the Dutch market. An admirable feat, but arguably nothing unique: while skillfully executed, it’s a fairly straightforward application of the marketplace-playbook. Where I think TicketSwap really starts to become interesting, is how they’re capitalizing on their position in the market and proceeding to solve a previously unsolvable problem.
Popular as it became, the observant reader noticed that in the system described above, one problem is left unsolved: if a malevolent seller really want to, he or she can sell a ticket and then still go to the event themselves (or sell it again outside of TicketSwap). So while TicketSwap minimizes the risk of a disappointment on the buying side, it can’t make guarantees.
The unsolvable problem I’m referring to, however, is not one with TicketSwap, but one with the secondary ticket market at large. The music event industry has long been plagued by so-called scalpers that buy large quantities of tickets they anticipate will sell out, in order to resell them at a profit. Needless to say, this is undesirable: the true music fans either can’t get tickets or need to pay up (for potentially fake tickets), while the primary vendors (i.e. artists, event organizers, venues and their ticketing contractors) don’t benefit from this increased ‘revenue’.
Undesirable as it is, since primary vendors simply can’t know which of their customers are genuine, there is no clear-cut solution. Allow customers to sell their tickets back at any time, and the vendor faces severe financial risk. Tie tickets to buyers’ names (or ban reselling by law altogether), and customers with legitimate reasons such as sickness are disadvantaged. Limiting the amount of tickets one individual can buy will only make it a slightly harder for scalpers. It’s a stalemate.
Or is it? Enter TicketSwap’s new feature Secure Swap. Event organizers can choose to partner with TicketSwap and enable Secure Swap for their event. By doing so, they tie tickets to their buyers’ names, but they also allow customers to resell tickets exclusively on TicketSwap in a special way. First, the ticket being sold is invalidated. Then, the second-hand buyer receives a new official ticket that is now tied to their name. In addition, TicketSwap limits the resell price at 120% of the original price — too low of a margin for professional scalpers to be lucrative.
Amazingly, this eliminates scalpers, solving this problem — and as the buyer is now truly guaranteed to receive a working ticket, it simultaneously solves that problem too! Moreover, TicketSwap is uniquely positioned to provide this solution. Sure, theoretically, every vendor could offer their own Secure Swap-like service and bypass TicketSwap. That would be impractical to begin with, as TicketSwap already has the infrastructure in place. More problematically though: that would require the vendor’s official sales channel to endorse secondary ticket offerings. Picture a sales channel with two buttons right next to each other: ‘buy from us’ and ‘buy from reseller’. Unless the event is sold out, the right-hand button will offer a lower price, resulting in primary sales coming to a halt until all secondary tickets are sold. Obviously, no vendor would do that.
But aren’t they effectively doing the same thing by opting in with Secure Swap? Logically speaking, they are — but the alternative is the proliferation of scalpers. It’s a choice between evils, and Secure Swap is the customer-friendly middle ground. Of course, not all event organizers instantly embrace this. TicketSwap knows that it needs to put in missionary work to win them over. But the list of partners steadily grows. If they succeed in causing a paradigm shift within the industry, it will give their business model a whole new dimension.
Act three: Future opportunities
Bonus act! To conclude, some of my loose thoughts on what TicketSwap’s future might hold.
The first obvious opportunity is to further expand internationally. Some prior market research would be warranted, but a prima facie I can’t think of reasons why this product wouldn’t generally work abroad. I expect the only potential significant difference from country to country to be laws and regulations. Music events are universal, and judging by the fact that some notorious scalping organizations are huge multinationals, the secondary ticketing market is too. Furthermore, international expansion goes hand in hand with the mission of advancing Secure Swap, as some of the important partners will be internationally operating.
The second not-so-creative opportunity is to expand to other genres of events. Currently, TicketSwap gravitates around music events with a relatively young audience such as techno. This makes sense, as young customers will be more likely to use digital marketplaces. Still, the use case of reselling tickets should be just as common within e.g. the theater audience. As TicketSwap has an intuitive user interface, I suspect most older users would be just as fine using it.
More creatively, I think TicketSwap could play a larger role in actively suggesting events for its users. Currently, the product has a ‘passive’ stance: if the user doesn’t actively engage, nothing happens. There is a feature where users can browse for fun events in a specific region or venue, but its not personalized, and, again, passive. As TicketSwap learns the musical preferences of its users as well as the regions in which they frequent events, it could actively keep track of when a nearby, interesting event is just 1–2 days away yet still has many unsold and/or cheap tickets. This could lead to happier sellers, higher revenues, and some fun, spontaneous and cheap nights out for buyers.
Adding on that feature: this can be done for dumping unsold primary tickets, too — discounted, of course. While primary vendors will generally not be keen on mixing primary and secondary sales, I’d imagine they’d happily use TicketSwap as a backup sales channel in specific cases where an event just won’t sell as well as expected.
The above two features have to be very carefully balanced, however, as to not be too pushy. TicketSwap’s users love the product for being unobtrusive and no-nonsense, and this reputation is a key brand asset.
From a user perspective, it would make a lot of sense for TicketSwap to also try and take market share of primary ticketing companies such as Paylogic and Eventbrite. TicketSwap is the brand and UI users love to see, while the UIs of ticketing companies are acceptable at best. However, I think this is a move TicketSwap wouldn’t be able to pull off strategically for two reasons. Firstly, TicketSwap currently partners with primary ticketing companies for e.g. their events database and integrating Secure Swap. Attacking their market may damage their valuable goodwill. Secondly, I’m afraid event organizers would feel uneasy if TicketSwap would facilitate both their primary and secondary sales. This would go against the whole idea of TicketSwap being the ‘tolerated lesser evil’ as aforementioned.