Small tech company reinvents itself after pandemic outbreak
A Calgary tech company whose revenues evaporated in the wake of COVID-19 has avoided mass layoffs by pivoting to an entirely new business model.
Showpass, an online event ticketing platform, was one of this city’s most promising technology firms prior to the pandemic. With 50 employees working out of its Ramsay headquarters in southeast Calgary, the company had been looking forward to a major expansion and hiring spree in 2020.
“We were growing triple digits year over year, which was obviously really great for our size of a business,” said CEO Lucas Mccarthy.
“We did a pretty substantial fundraising round last year, finished it up in December, and we broke records in January, broke records in February, and we were on track to break records in March.”
But COVID-19 public health restrictions and the cancellation of public events and gatherings brought the Showpass winning streak to an abrupt end. Nearly overnight, the company ’s earnings evaporated.
“We realized that for the next six to 12 months, there will be zero revenue,” Mccarthy said. “That’s a really tough thing to grasp and understand after you’ve been building this great business for so long.”
Deciding that layoffs were “not an option,” the Showpass executive team looked to reimagine their business. They considered multiple scenarios — including getting into the food delivery business — before ultimately settling on their new platform, an online marketplace that connects talent with fans and supporters in a virtual setting.
The new platform is designed specifically for the physical distancing era, and seeks to address the pent-up hunger for socialization as well as artists’ and performers’ need to find new ways to make money in the absence of in-person events. Via the new Showpass site, country music artists like Aaron Pritchett and George Canyon are offering up private online concerts for sale. Top Chef Canada winners are offering virtual cooking classes, while the head sommelier from the Ritz-carlton hotel chain is selling online, in-home guided wine tastings. There are also comedians offering private “living room parties,” as well as tour guides offering virtual tours of the African savanna and other exotic locales.
Experiences are priced either per person or per group, and the money goes to the performer; Showpass gets a cut of all revenues earned. When you purchase an experience, you can invite friends and family to connect virtually and make it a group event. The site offers purchasers a chance to browse all the experiences on offer, as well as a way for performers and hosts to create their own event for sale.
Mccarthy said the Showpass decision to reinvent itself was “drastic,” but the company had little choice. Many of the existing COVID-19 relief programs unveiled by government so far don’t make sense for tech companies, whose needs are different than bricks-and-mortar businesses.
“A lot of the companies that aren’t in tech are probably a lot better off than us, honestly,” Mccarthy said. “But we got to have one of the most crazy, unique brainstorming sessions I think we’ll ever have the opportunity to have. How many companies get to go to their staff and say, ‘If we were to start a business from scratch today, what would that business be?’”
Mccarthy said the fact that Showpass has been able to pivot so quickly demonstrates the potential of Alberta’s sector and the role it could play in an eventual economic recovery.
“It’s easy to see a 50-person company and say, ‘Oh, they’re not that big,’” he said. “But we can move really quickly and scale quickly. You just can’t do that with asset-based businesses. So if we want to recover as an economy, the quickest way to do that is to support our tech sector.”