The London tech star you’ve never heard of
Think of London’s tech-nocrats and the likes of Michael Acton Smith and Martha Lane Fox instantly spring to mind.
But there are lower-key characters who are just as integral to the tectonic shift in London’s tech scene.
One of them is Ajay Chowdhury, the former chairman of Shazam, the music recognition app that last year got $40m investment from Carlos Slim, the second richest man in the world.
Chowdhury still has a stake in Shazam, which he expects “will pay for his kids’ education”.
Other tech companies Chowdhury has led include global cloud-based retail company ComQi and LineOne, which he grew into one of the UK’s largest portals and internet service providers. He is also a non-executive director on the board of the Department of Culture, Media and Sport.
Chowdhury’s newest gig is heading up ticket resale site Seatwave, whose ticket sales are close to $100m a year.
We speak to Chowdhury about his plans for Seatwave:
Q. You’ve been involved with Shazam from day one. Tell us about your experience…
I became a venture capitalist with this $100m capital fund called IDG Ventures Europe and the first investment I made was Shazam.
Shazam has now become a massive success and is worth hundreds of millions of dollars. But we started off in a tiny office in Regent Street and then moved to a tax office in Kensington, the worst office in the world. These offices weren’t anything like the glitzy offices Shazam has now.
I was chairman of Shazam for seven years and saw it through some pretty tough times. I’ve still got my tiny stake in Shazam that will hopefully pay for my kids’ education.
Shazam’s my baby and remains my favourite company but I decided not to be a venture capitalist anymore. I enjoyed being a VC a lot but I like building and expanding companies and not investing in companies.
After Shazam, I set up ComQi, a company in the retail-technology space backed by venture capitalists. We had clients like Victoria Secrets, H&M, McDonald’s and Toys“R”Us, who we helped link their offline and online businesses.
Most of that business moved to New York so after getting tired of spending two weeks in London and two weeks in New York, I decided to join Seatwave.
Q. What attracted you to Seatwave?
I liked the space as I am passionate about music, theatre and arts. Also, the team at Seatwave was really good. But what was most interesting was that the one area of ticketing that was under-explored was mobile. With my experience at Shazam, I felt there were a number of interesting things we could do with mobile ticketing that nobody was really doing.
If you take the biggest pain points for anyone who likes to go to a concert or theatre is that they didn’t know it was on. So I thought if we could do something in mobile that alerted people as soon as one of their one of their favourite artists was on tour and lets them easily buy tickets – that’s a really powerful proposition.
I also wanted Seatwave to take up social media in a big way so that the company’s not just about ticketing but becomes part of the whole process of how a fan connects before, at, and after an event. The idea is to help fans create a memory of a concert by interacting with their friends, uploading photos and videos, as opposed to just having a ticket stub as a memento from the event.
Q. What are the revenue streams for Seatwave?
We charge the seller 10% of the price of a ticket and take a 15% cut from the buyer. But for that we’re providing the ticket, and the security that if something goes wrong with the sale you’ll get your money back. So it’s a completely risk-free transaction.
Q. Major ticketing sites including Seatwave were marred by fake tickets last year. How are you dealing with the issue?
It’s an issue that keeps coming up. From Seatwave’s perspective, we guarantee anything you ever buy on the site. So if you buy and find anything wrong with the purchase, you get your money back – no questions asked.
We know fans have emotionally invested in going to see a Will Smith or Katy Perry concert, so if things go wrong, we first try and replace the ticket before returning the money.
You can never lose money when you buy anything on our site. We’re putting in as many processes as we can to ensure that what people are putting up for sale is legitimate. At the end of the day because we’re a marketplace and sell millions of tickets, it’s very hard for us to police every single ticket that gets sold.
Q. Who are your competitors and how do you plan to take on them?
There is certainly a lot of competition from Getmein, Stubhub and Indiegogo. However, what we’re trying to do is not limit Seatwave to ticketing anymore. I am reaching out to some of our competitors to say there are areas on which we can work together. At the end of the day, it’s all about how we can all provide a better experience to the fan.
Q. What’s the ratio of fans versus bulk sellers on Seatwave?
The majority of people selling tickets on the site are fans and then we have others who may be power sellers. There is nothing wrong with that because at the end of the day we’re a marketplace.
For high-demand concerts or sporting events, people will charge what the market will bear. There is a lot of hype about people selling tickets for thousands of pounds but it’s very rare that tickets sell for that high a price.
Q. But does that inflate prices?
That is an issue but a lot of tickets sold on the site are what we call last-minute tickets and they’re often sold for below face value. So there have been times when Justin Timberlake tickets that originally costed £95 go for £25.
Q. What are the future plans of Seatwave?
Luckily, we don’t need more funding. We’re going to look at expanding our mobile presence and tap our social presence. We are looking at acquisitions too. The main driver of our ticket sales is which big bands are going on tour. This year there are quite a few expected like Coldplay, Take That and U2, among others.
Q. Why don’t tech companies want to list in London?
I think the tech space in the UK is very vibrant. The amount of new tech companies coming up is phenomenal. The UK has the tech talent but the issue in the UK has always been financing. Having been a venture capitalist, I’ve seen it from both sides.
A lot of companies raise seed investment to prove a concept but as they start needing more serious private equity funding, they start looking to the US. This is because unfortunately the track record of venture capitalists in Europe has been pretty poor. The good VCs around are picking and choosing companies. A typical VC might invest in six to 10 companies a year and if there are only 10 good VCs, that is just 100 companies getting investment out of thousands.
Q. Then why have we not been able to produce big global companies?
There is a huge amount of innovation going on in the UK. Shazam, Betfair, King are all British companies. Britain has always been a creative hub. The reason we haven’t built big global companies because there’s a different entrepreneurial mind-set.
While US entrepreneurs would turn down a billion-dollar offer because they feel they’re worth much more, UK entrepreneurs don
’t say no to a $50m-$100m offer. You have more serial entrepreneurs there who are willing to roll the dice again. This sort of entrepreneurialism is only beginning to come here with people like Martha Lane Fox and Brent Hoberman heading new ventures.
Q. Is there a tech bubble?
We’re in a bit of a bubble and the stock market is looking pretty frothy. Take King, for example – they haven’t done well in their IPO at all. There’s a danger that the tech bubble’s going to burst so we tech companies need to be prepared.
Q. Finally, tell us about your role at the Department for Culture, Media & Sport (DCMS)?
I joined DCMS last year. I really enjoy it and it’s fascinating helping ministers. These days I’m working on how superfast broadband can reach 99% of the country because getting that going really powers economic growth. There are so many blackspots in the capital and people to date don’t have good 3G coverage.
There was a great Ofcom report that came out recently which said that the UK had the best broadband across Europe, which is great news. I think if we can get to 95-99%, it would be the highest penetration any country in the world.
There is another scheme we’re running at DCMS which is giving companies vouchers for upgrading from dial-up connections to superfast broadband connections.
Thanks for your time Ajay.