6 years ago, Sam Sherman came up with the idea for Broker Genius right around the time that Peyton Manning was deciding which team he would play for next. Sherman's gut told him that Manning was going to play for the Broncos. He made some calls to determine what ticket inventory he could buy, trying to position himself ahead of the coming demand. But the only tickets left were pricey premium club seats.
Once Sherman discovered that it was just about a done deal that Manning was headed to the Broncos, he maxed out his credit cards by buying those Broncos club seats. It turned out to be a wise move, as Sherman sold those tickets for high profits.
Noticing inefficiencies with ticket pricing through the Manning scenario and thereafter, Sherman decided to create an automated ticket pricing tool. I recently spoke to Sherman about that startup and how it has grown to date.
Who are the clients of the company and what is the structure of the relationship?
Sherman: Our clients are our ticker resellers (ticket brokers). We have 2 different offerings. One is our license product that they can use to set pricing rules to automatically adjust their prices. The other is a full service pricing solution where our team of pricing analysts manage their pricing for them.
What were and are the difficulties in breaking into the hyper-competitive secondary ticket marketplace?
Sherman: When we first introduced the concept of dynamic auto pricing back in 2013, many brokers were afraid that it would cause the markets to crash. They all wanted the technology if they could be the only ones to have it. In addition to their initial fears, the marketplaces we were using to power our technology were not giving us API access. That meant we had to scrape, which caused the product to constantly get shut down in the early days. It was a huge uphill battle until we became an integral part of brokers' businesses.
What are the biggest challenges that ticket sellers face in the near future?
Sherman: Content rights holders are rethinking their approach to pricing as well as how they want to handle distribution. With more consolidation, brokers will need to be able to find other ways to source inventory. They will also need to have more powerful and rich data tools to better understand risk.
How much revenue is Broker Genius receiving on an annual basis? What are its projections?
Sherman: We would want to keep this information private; however, we are projected to price over $1 billion worth of tickets in 2018, and our clients represent over $2 billion of tickets sold per year.
Correction: Broker Genius's pricing tool does not take into account market size, weather and standings to predict optimal pre-market ticket values. An earlier version of this article incorrectly stated that it factored in these variables, based on inaccurate information provided by the company's public relations firm.