S+B: That’s a great segue. When you launched in 2002, the economic climate was challenging at best. What impact did that have?
McCARTHY: It was a tough economy, and it was just after 9/11, which added uncertainty. It was also a time that tech investors still refer to as the “nuclear winter”: After the dot-com boom had gone bust, the exuberance and enthusiasm vanished. Goldstar’s cofounders, Robert Graff and Rich Webster, and I had been working in e-commerce for several years. We believed that whether there were going to be crazy IPOs or frothy valuations from investors or not, the only direction that actual Internet usage could go was up, and up fast. We had this idea that the ticketing business was perfect for e-commerce. There was expiring inventory, but with the Internet and e-mail and the ability to customize, we knew that we could reach a lot of people.
On the one hand, the easy money wasn’t there. It would have been really difficult to raise money for a consumer concept at that time. On the other hand, the recession cleared the field for us, in a way. Because there wasn’t a ton of competition. It gave us a couple of years to build momentum.
In a time like that, if you say, “I’m going to start a business,” a lot of people around you will reply, “Wouldn’t it make more sense to just play it safe, get a job in a big company, and wait this out?” From my point of view, however, a recession is often the perfect time to start a business, depending on what you have in mind. It was a disadvantage in that generally everybody was a little more pessimistic, but recessions also create a lot of disruption, and they kill off some weaker businesses that are doing things in an outmoded way — and that creates all kinds of opportunities.
Reprint No. 00114
- Laura W. Geller is senior editor of strategy+business.