This is an idea that I actually started working on with some friends (Mike S. and Mike C.). We got pretty deep into it and developed a pretty in depth business plan in 2010 but for some reason or another, we stopped working on it. I still believe that there is an opportunity here.
Below is the executive summary that we ended up writing for CrowdRobot (which was the working name for the project). If you think that this is something that you’d like to pursue, shoot me an email and I can send you the rest of our business plan (as long as my the Mikes don’t mind).
“CrowdRobot is an online venture that brings together music venues, Indie bands and their fans. Smaller music venues are often in search of performers, however face significant uncertainty when booking small bands. Indie bands find it difficult to secure a venue in a location with a sufficient fan base. And fans are inconvenienced by searching through several channels in order to purchase tickets for a small concert. CrowdRobot provides a solution for venues, bands and fans alike through an online ticketing service.
Using a blue ocean strategy, the bare bones ticketing model utilized by CrowdRobot will allow the company to offer the target market only what it needs in order to drastically reduce the service fees paid by the final consumer. General admission clubs with capacities of 700 and smaller are currently ignored by event ticketing leaders such as the TicketMaster and Ticket Biscuit. By targeting these smaller venues and eliminating unnecessary services, CrowdRobot is able to serve a niche market and bypass competition of large full-service ticketing companies.
The profit model of CrowdRobot relies on a small processing fee garnered on each ticket purchase. CrowdRobot will strive to keep fixed costs low, enabling it to keep prices low while still turning a substantial profit. Though CrowdRobot’s margin on each ticket is only 25 cents, due to the scalability of the concept, increased volume over time will increase profitability substantially without increased fixed costs. Expectations are to break even by year two, and to generate a profit of nearly half a million dollars by year four. Due to limited fixed costs and internal development skills, a very small amount of start up capital is needed. The management team will provide the necessary $25,000 in equity capital to launch the business.”