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CEO Responds to Kraftwerk Nightmare

Fans were fuming after trying to get tickets for Kraftwerk's New York City shows at MoMA. Here's how the CEO behind ShowClix's debacle handled customer outrage.

Start-up Snafu: ShowClix was handling the sales of Kraftwerk tickets this week, but couldn't handle the demand.

Kraftwerk, the German electronic band that once topped charts with hits "Computer Love" and "Autobahn," recently announced they would play eight nights at New York City's Museum of Modern Art in April, the first time in 17 years the band has visited The Big Apple.

But when the tickets went on sale this week, the band—and the company facilitating the online ticket sales, ShowClix—faced their worst nightmare. ShowClix, the small ticketing company based in Pittsburgh, didn't anticipate heavy demand for tickets, so when the thousands of eager fans logged on to buy tickets, the company's servers caved. As desperate fans input their credit card information, most were left on a seemingly interminable online queue that, after almost an hour, eventually timed out.

Around mid-day Wednesday, when the tickets went on sale (well, sort of), the band's name was trending on Twitter, mostly due to outraged fans venting their frustrations.

"Which level of hell is this," tweeted one fan. "There are seven [rings of hell], but there are eight nights of #kraftwerk."

The Village Voice chroniciled the debacle yesterday, publishing its official "Guide To The Five Stages Of Ticketing Grief In 2012." The New York Post decried the ticketing company, saying fans were "freaking out" over the ShowClix's error, and even an Australian blog, Inthemix.com, chimed in, saying the snafu left "NYC fans raging."

But the problem with the sales was simple—you don't need to be an economist to understand why this happened. MoMA's venue capacity, which is limited to the "intimate" atrium in the center of the building, is listed at 1,000. Even over eight nights, that's a mere 8,000 tickets. In the end, all tickets were sold, but just 1.2 percent of the prospective buyers ever saw a "Thank You" screen.

Fingers were pointed in every direction.

"I blame Kraftwerk," commented one fan. "If they only do eight gigs in New York in 17 years, they're creating a huge imbalance between supply and demand. That's a recipe for rampant inflation, not to mention systematic corruption. Hence the $42,000 tickets for sale on Craigslist."

Iniitially, the online ticketing agent responsible for the sale, ShowClix, was silent. (The company founder, Joshua Dziabiak, is an alumnus of Inc.com's 30 Under 30.)

But in the end, ShowClix owned up to the mistake. While some companies use social media to apologize, Dziabiak went old school, penning a 659-word apology on the company's site.

"Ultimately, we failed many of you," wrote Joshua Dziabiak, the 25-year-old ShowClix CEO.

He continued:

"Sorry it took me a day to write this, but it was important for me to first understand all of the facts so they could be properly communicated. First and foremost, we are deeply sorry for the frustration and massive inconvenience that yesterday's on-sale for Kraftwerk caused for many of their great fans around the world. I recognize that so many of you spent hours in front of your computer watching a spinning wheel--or watching the page go blank….

We should have both of these problems resolved by the end of this week. However, even with these problems resolved, it is my belief moving forward that we should not perform an on-sale all at once for an event or venue that has such small capacity restrictions versus potential demand. Instead, we will advise our clients on various alternative methods to fairly sell tickets to an event that has such a small fraction of inventory available versus the potential demand."

Back in 2010, when Dziabiak was just 23, ShowClix already had 17 employees and about $8 million in company revenue.

"We're really trying to position ourselves as the fair, innovative alternative to Ticketmaster," Dziabiak told the magazine then.

Eric Markowitz reports on start-ups, entrepreneurs, and issues that affect small businesses. Previously, he worked at Vanity Fair. He lives in New York City. @EricMarkowitz