The Collapse of Lyte
Three Things I Learned from the abrupt collapse of ticketing vendor Lyte
The collapse of Lyte and why choosing vendors is high stakes
Choose who you work with carefully. It is so easy to get drawn in by whatever business you can get in the early days. Especially when times are tough- which they are for many right now.
We made a lot of mistakes, and have seen a lot of mistakes, since we started. In light of the collapse of Lyte leaving vendors and customers high and dry, here are three mistakes we made, or watched, when not properly vetting vendors.
Vet your customers!
In the early days of TicketManager we were living hand to mouth. Anything we bought for a client came out of our pockets personally until they paid for it. I made $16k that year - and that didn't count what I put back in.
Michelle Wing was stealing from her company to buy access to big events. We never looked into it as she was the exec assistant to the CEO, used her work email, and it all seemed legit. Until we got a call from the FBI. She owed us 20k. We lost it all.
Mitch Chirchick was a big customer of ours at StubHub who would buy lavish events. He took his business with us when we started. He would buy a suite for the Rose Bowl then show up with a boxing star and celebrities. Until he got indicted. And we were left holding the bag on $40k we didn’t have https://www.reviewjournal.com/news/man-gets-eight-to-20-years-for-scam/
Cy was a bigwig at our biggest early customer, CenterPoint Energy. We would marvel at how he’d throw money around at events. Once telling me to buy “all the Caymus” at the local liquor store and handing me his black card. I did. He was a great customer, until he was gone. Procurement let us know that none of the buying was approved by compliance. At least that one we didn’t eat.
All three of them seemed so legit.
But you know what they say about crooks: if they aren’t great liars, they aren’t crooks for long.Vet your vendors.
Enter Lyte.
They’re not the only one.
If something is too good to be true, it isn’t true.
ScoreBig was everywhere. Every event. They had big time VC backing and paid out rips better than any marketplace.
Until they didn’t. They went under and left people holding the bag.
SpongeTech had sponsored everything in the late 10’s. It seemed impossible they could do all these team deals.
It was. They flamed out and disappeared as fast as FTX.
Lyte was going to change the economics of ticketing. They made bold statements and did plenty of press.
Those that believed are the most hurt.
If the deal seems too good - it's much cheaper, easier to buy, or flashy - be very wary.Nobody can actually spot a cheat.
Gladwell's book “Talking To Strangers” examines just how terrible we all are at judging what is true and what isn’t. And the more certain people are they can tell what no one else can, the more spectacularly wrong they are. Don't take my word for it. Read the book.