Dear Disco Fam,
I hope you had a happy holiday season and New Year! On my end, I am happy to say goodbye to 2020, which proved to be a "challenging" year, to say the least. While we are not yet out of the woods, with the Covid pandemic still rampaging through the majority of our markets, I am more confident than ever that Discotech will survive and then thrive into 2021 and beyond. Having already scrapped it out through ten long and dark months, I know that our team has the grit that it takes to make it out to the other side of the tunnel. There is no tougher team of honey badgers that I would rather be a part of. Now with that, I bring you our latest updates from the fourth quarter of 2020.
Key Updates
- Company Performance
- Company net revenue down ~82% YoY primarily due to venue partners being shut down. A handful of markets are partially open, offering limited capacity VIP table reservations but to tickets, guest list, or general admission.
- One promising anecdote to share - While most of our markets were closed during New Years Eve, Miami was open for VIP table reservations. Despite some of our biggest partners being closed (LIV, Story, Rockwell, Wall), we still sold 257% more tables in Miami this year compared to NYE in 2019, at a 52% higher average spend per table. This is likely attributed to less competition and a stronger SEO presence. One of our Miami venue partners, Nikki Beach, mentioned that we were the only 3rd party promoter they were still working with. Hopefully this pattern continues to play out as markets start to open again.
- Net cash burn for Q4'20 was $125K (not including some new investment that we took in). Total cash on hand is ~$687K.
- In an extremely conservative case where revenues do not improve, we still have ~15 months of runway at this rate, not including grant money received from PPP round 2 or the Save Our Stages Grant.
- The government recently passed the Save Our Stages (SOS) bill, which Discotech appears to be eligible for. The potential grant amount could be up to ~$400,000 for our company. This is greater than the ~$125,000 we could receive from PPP round 2. We can only choose one grant (they are mutually exclusive) so we are currently waiting for the application for SOS to become available.
- Marketing and Business Development
- Continued adding more festivals and venues onto the platform.
- We are in discussions with Resorts World and the new Zouk Nightclub and AYU Dayclub that are opening this May. They are expected to be the new "mega" clubs in Vegas.
- Improvements to autogenerated SEO pages + webapp SEO.
- Webapp search traffic page views hit all time high on NYE, overall search volume is recovering, primarily through autogenerated pages. We expect to see a significant increase once nightlife starts to come back.
- This contributed greatly to our growth in number of tables sold in Miami this NYE, as a large percentage of our leads came from our web app.
- Working on adding more tracking / analytics to web app.
- Working with interns to generate content and backlinks.
- Improved content on old articles and pages.
- Adding artist pages to target long tail search traffic.
- Continued adding more festivals and venues onto the platform.
- Technology
- New feature: "Artist Tours" (group of events for a specific Tour).
- Added artist following/favoriting to the web app.
- First phase of web app UI/UX overhaul completed (mostly under-the-hood changes).
- Next up will be redoing functionality and UI to be more modern, e.g. new "browse events" view with more filtering and faster/cleaner UI.
- Continued improvements to table pricing integrations.
- Integrating new API to serve all major Las Vegas venues (UrVenue).
- Continued improvements to technical SEO: internal linking, performance, and metadata.
- Started development on automatic creation of new venues and artists (from external data sources like TicketMaster)
- Scoping out new mobile features, including:
- Higher visibility of social features (to encourage adding/inviting friends).
- Improved ticket-purchase experience (including better price breakdowns).
- Notification settings (e.g. receive alerts for new events from favorite artists).
- Music sampling (via Spotify and Apple Music).
- Continued improvements to event aggregations system.
- Continued performance improvements and tech debt clean up.
While 2020 was a year of unprecedented challenges, what lies ahead of us is a time of unprecedented opportunity. While I do not know when the rebound will take hold, I do know that our team will continue to do whatever it takes to be in the best position possible for it. After the Spanish Flu, there were the Roaring 20's. Post Covid, I believe we will have the Roaring 2020's. Cheers to a new and better year ahead.
All the best,
Ian