Revenue Per Employee $1 million
Randy Cohen’s aha moment came in 1987. Shortly after he graduated from the University of Texas, the school’s basketball team made it into the Top 10. When the Longhorns were scheduled to play the then-top-ranked Arkansas Razorbacks at Texas’ Frank Erwin Center, Cohen saw his opportunity.
Betting that the game would sell out, he bought 100 tickets at $7 each and sold them a week later for $15, turning a quick $800 profit. By 1990, Cohen launched a ticket brokering business that would eventually be named TicketCity.com.
Though it has a “.com” in its name, a relic of the dot-com boom years, TicketCity.com takes about 80% of its orders over the phone. And yet the Web applications it built for its online customers—both consumers and professional ticket brokers—to pool, search and buy event tickets are now in the hands of its internal sales staff and spurring the company’s productivity.
This year, TicketCity.com expects to do more than $20 million in sales with 21 full-time employees and three part-timers.
TicketCity caters to people who have decided they absolutely have to get into an event where the tickets, or at least the best seats, are sold out. Called “scalping” when it’s done by some shady character in the alley behind the stadium, reselling tickets has turned into big business for firms like StubHub, which says it does about $100 million in sales, and TicketsNow, which is projecting 2005 revenues of $125 million to $150 million. These businesses typically aren’t subject to anti-scalping laws as long as they pay sales tax and otherwise behave like good corporate citizens.
Purchases average more than $600 and can range up to a few thousand dollars, with a profit margin of about 30%, says CEO Cohen. During a conversation in early September, he reads off a few of the latest sales on his computer screen—$720 for four tickets to University of Texas vs. Texas Tech football, $150 for one ticket to the Austin City Limits music festival, and $2,850 for six tickets to a Texas/Oklahoma football game.
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