He’s the Silicon Valley investor with the Midas touch. As well as being CEO of Eventbrite, Kevin Hartz has been a seed investor in PayPal and includes fast-growth companies, such as Airbnb and Pinterest, among his portfolio.
Hartz was in Dublin this week with his wife Julia Hartz, with whom he co-founded Eventbrite with CTO Renaud Visage in 2006. Julia Hartz gave the keynote address at the Female Founders Forum.
Eventbrite, which is opening a new office in Dublin, has processed more than US$2bn in ticket sales. Growth is accelerating to such an extent that in 2013 alone, the company processed US$1bn in ticket sales. The San Francisco, California, company recently raised US$60m in venture capital, valuing it at more than US$1bn.
Prior to Eventbrite, Kevin Hartz served as CEO of Xoom Corporation, an international money transfer company active in 40 countries worldwide.
He has been an early stage investor in a large number of start-ups, including PayPal, Airbnb, Palintir, TripIt, Yammer and Pinterest.
Hartz is a partner in Youniversity Ventures, a fund launched by YouTube co-founder Jawed Karim, and he is also a special technology partner with Sequoia Capital.
To give you a sense of his instinct for tech investing, both Palantir and Airbnb are currently valued at US$10bn while Pinterest is valued at US$3.8bn.
Hartz this week looked casual and unassuming in a black sweater, as he took in his surroundings at the Guinness Storehouse. Grinning, he opened the conversation: “I feel like I’ve been a good patron, I’ve supported Guinness through the years.”
Hartz has a warning for today’s crop of tech entrepreneurs: if you are creating something that has been done before or is in vogue, let’s say another photo-sharing app, he’s not interested.
Instead he channels the famous quote from former Apple CEO Steve Jobs: “The people who are crazy enough to think they can change the world are the ones who do.”
Hartz said: “There’s a lot of companies out in the market, a lot of start-ups, so what I find is I’m always looking back at the people but then secondly, really, it is looking for entrepreneurs that are contrarian.
“There’s just too many people following the same course and you want to find somebody who is running against the grain, doing something that one would almost say is ludicrous and unbelievable or strange or bizarre so that’s in fact what I look for – the real odd ducklings that are in a very odd category and run by brilliant people.”
Life is too short to do the ordinary
He says there are too many “me too” plays out there, especially in San Francisco, California, where he lives.
“The days are gone when you could start a shoe company in some part of the world and sell shoes online; you’ve got to be very unique, very differentiated and the best way to do that is to do something far out of the ordinary. Life’s too short to do the ordinary.”
But it isn’t just people doing ludicrous things, he seeks out pragmatism, too. Which was precisely what led to him becoming an early stage investor in Pinterest and Airbnb.
“At the time they had very small traction but the customers using the services loved the services against all odds. In the early days, investors wouldn’t even consider these businesses because they thought it was unusual or bizarre and crazy to have some stranger staying in their home, or this notion of a pinboard or many of these other things that have now grown into large industries.
“It was the uniqueness of the offering, it was the zeal and intellect and passion of the founders and I always like to see some traction. I am very rarely involved in pure seed-stage investments unless I truly know the entrepreneur.
“I think PayPal was one of the few seed-stage investments I did.”
It’s a dangerous time to be an angel investor
Rarely a day goes by when you don’t hear about San Francisco being overrun by Silicon Valley in terms of start-ups and culture. On every street corner and in every coffee shop there is seemingly a group of entrepreneurs who’ve convinced themselves they are going to put a dent in the universe. How does Hartz filter out the noise?
“This might be a disappointing answer – I’ve been investing less these days and part of the reason is I have this wonderful portfolio of new investments to make in Eventbrite.
“At the size and scale of Eventbrite we are investing in building out Dublin and broader Ireland as a business. We are investing in launching reserved seating, investing in making a wonderful mobile experience, and so the entrepreneurs I work with most today are those inside of Eventbrite.
“For me as an angel investor it is actually challenging, it is a tough time to be an angel investor, a dangerous time, because you may invest in one area that you may feel is unique but find out a week later that there’s a dozen different copy cats. So that’s the challenge of good times like these for an angel investor.”
Outside of Eventbrite, Hartz is excited about developments in the life-sciences arena, particularly in the genomics space. He’s also fascinated with what’s happening in the hardware space.
“I have a couple of drones just for sport and play. I’m not sure what the killer app is but somebody, somewhere, probably at the age of 20, is probably starting some insanely great business to really commercialise the use of drones and really revolutionise some area that I can’t point to yet.
“As I think about all the different opportunities, we have the explosion of Android into the global marketplace, we have what’s happening in the enterprise.
“The excitement that’s happening today is that there are so many different areas of innovation that are happening, so many different segments that can be entered with very low amounts of capital and that’s why I would urge entrepreneurs to really do something completely different, do something completely new and against the grain and be original.
“Don’t try to be a copycat of some other company out there, forge a new path.”
The current tech economy: frothy
The obvious next question for Hartz is whether the current tech bubble is about to burst, just like the previous one did in March 2000.
He answers with a sense of pragmatism, wisdom and experience that is worth paying attention to.
“It’s always dangerous when you hear people call in unison ‘this time it’s different’ because it’s not. The nature of capitalism is boom-and-bust cycles and we undulate between these different boom-and-bust cycles.
“Where we are in the upswing in the cycle it’s frothy but there is a lot of friction and value that’s happening.
“What generally happens is time will tell when things correct or when things have gotten too frothy, so in 2008 we did have a global recession that swung tech back down significantly and we had a minor correction on the NASDAQ just a few months ago, but time will tell the winners from the losers.
“Unfortunately, there tends to be few winners and many more losers, so the message to entrepreneurs out there is to stay very lean, don’t become reliant on the addictive drug of investment capital, really focus on building a sustainable business and having different alternatives to ensure you go the long run,” Hartz said.
“That was the essence of what we did when we built Eventbrite.”