In a small, non-descript building on South Congress Avenue a machine is humming. Every day hundreds of tickets to concerts and events accounting for thousands of dollars in sales are bought through this office – from Lollapalooza in Chicago to the Austin City Limits Music festival. Since its launch in 2003, Front Gate tickets has become a formidable player in the entertainment business, selling millions of passes each year in more than 700 cities around the country. Credit internet whiz and techie CEO Mellie Price for this homegrown entrepreneurial coup.
But Price isn’t your typical corporate chief. She’s a woman who’s been around the deal block a few times, learned many lessons along the way and parlayed those into some big successes. And while she’s picked up a little diplomatic finesse through the years, she’s not the type to hide who she is, mince words or tell people what they want to hear.
Instead, having learned a long time ago to ditch the corporate America playbook and carve her own path, Price is now advising the start-up execs who come to her for guidance to do the same. For instance, if you’re wondering why after seven years she hasn’t already jumped to sell front Gate for a hefty profit, well that’s not her style. No thanks. Been there, done that, have the stock options.
That doesn’t mean she’s resting on her laurels. Rather, she and business partner Jesse Jack are embarking on a new venture, bringing their expertise and intellectual investment to start-ups and helping mold a new breed of business leaders along the way.
“I couldn’t be more excited about what we’re doing,” says Price. “I really believe the opportunity we have here is huge.”
The accidental technologist
Mellie Price learned HTML code over Chinese food and champagne.
Working for a digital pre-press company near downtown Austin in the early 1990s, she would stay late into the night with customers printing out the negatives of everything from magazines to brochures. David Avery was a regular customer who worked with University of Texas publications and the two struck up a friendship. For the price of Chinese takeout and a good bottle of bubbly, Avery taught Price the language that was the backbone of the rapidly growing phenomenon known as the Internet.
“Once Mellie gets something in her mind, she’s like a terrier,” laughs Avery. “I’d tell her something offhand, like ‘you should look into this or that or learn this’ and a week later she had been talking to people about that topic, completely focused on it.”
Price was working at the pre-press company as she earned her biology degree at the University of Texas. She had hopes of eventually getting a master’s degree in aquatic botany – a field she had a keen interest in. But, with funding for research getting harder and harder to come by and so many scientists vying for a piece of an ever shrinking pie, Price was staring at an uncertain future. Meanwhile, the pre-press job, and the company’s 24-year-old owner, were giving her another kind of education.
“To this day, he is one of the most brilliant designers I’ve ever met, and also one of the worst entrepreneurs,” she says of that former boss. “I essentially went to business school by working with an entrepreneur who had an amazing opportunity to grow his business but didn’t have the business experience to manage it into success.”
As she watched the toils and troubles of her employer, she was developing a talent of her own for creating basic Web sites. In a band at the time, Price went to many fellow musicians and offered to create Web sites for their groups. Soon, the recording behemoth Capitol Records came calling. The label had seen what she was doing with Web sites and wanted to pay her to build a site for one of their Austin bands, the Butthole Surfers. Price jumped at the opportunity and suddenly there was far greater potential in the internet than just getting the word out about her friends’ concerts.
“It all had this organic path and momentum to it that I was intuitive enough to respond to in the face of what I was seeing academically,” she remembers. “I saw that the internet was giving a voice to people who either didn’t have one or for whom having that voice was just too expensive. It was a cost-effective way of getting the word out.”
The early days
Price started her first company, Monsterbit in 1993. She was just 23 years old. The original focus of Monsterbit was rather non-commercial, building Web sites for artists and non- profits – helping them get their message out through the Web rather than printed promotions.
She worked with groups like the Indigo Girls and their Honor the Earth Campaign, traveling the country with them promoting the objectives of the nonprofit. Singer Amy Ray “was so supportive of me in those early years. …We started selling their CDs online, which was a very novel thing at the time.”
This was the early stages of the internet, back when many of those online had a Compuserve email address and everyone was working off of dial-up connections. “What we wanted to do was really put Austin on the map” in terms of the Web, says Price.
“We were dealing with small organizations and we were doing just about anything to create a good stable of customers,”
Recalls Avery, who joined Price in Monsterbit early on. Indeed Monsterbit was the only Web development and hosting game in town, and one of the first in the nation. The company built the first site for South by Southwest and even worked with a then relatively-unknown Mark Cuban who was building the first collection of media streaming content from Dallas. Cuban’s streaming site AudioNet would later become Broadcast.com, which he took public and eventually sold to Yahoo for $5.7 billion.
Meanwhile, Monsterbit was going through its own evolution, from building sites for musicians and artists to doing them for the entertainment industry as a whole and even experimenting with features such as audio and database streaming.
That kind of advanced know-how, plus the libraries of information that Monster- bit had built over five years to make its Web development faster, caught the attention of another Austin company called Human code. In 1997 Human code bought the commercial segment of Monsterbit, turning Price from entrepreneur to corporate executive at 27.
By then, the net had really taken off and her job was to service the Web development of really large accounts. Also growing were the tools for creating dynamic Web sites. Instead of just stagnant brochures, Web sites were gaining functionality, allowing people to buy things, post comments and otherwise interact. It was, in essence, the birth of online communities.
“I had the opportunity to learn some good things, and some not so good things from the integration of the two companies and the two cultures,” Price says. She got mentorship from people who knew their game and also knew how to work with creative types helping them integrate into the larger business world. Ever irrepressible and prone to speaking her mind, she even got a few lessons in workplace tact from those who took her under their wing.
“Mellie learned a lot over that time, dealing with all of the weird speak and the management stuff,” Avery says. “It was a learning period for all of us.”
But another jolt was quickly approaching. This was the fast-paced dotcom world of the late 90’s, when companies were being gobbled up by one another at breakneck speed. Just three short years after Human Code purchased Monsterbit, a publicly-traded consulting company out of the northeast called Sapient saw an asset in Human Code and bought it for $104 million. Price once again climbed the ladder, and now she was a vice president with one of the biggest players in the technology consulting industry.
The wake up call
The Sapient deal threw Price into a non-stop whirlwind of flights and meetings that went on for months. But the big realization came in May 2001, when her 37-year-old brother Scott died of a heart attack. “Here was my brother, very healthy, a vegetarian, and it didn’t make sense. And here was me, overweight, stressed to the max, on a plane 20 hours a week trying to keep a million bosses happy and dealing with the integration of these two companies that clearly wasn’t going well.”
Her brother’s death made Price realize that she was “on the fast track to nowhere” in terms of her own well-being. “Scott and I were extremely close,” she says. “He was a very gentle soul and was always looking out for and guiding me. If there was a silver lining in his death it was that I learned I needed to take responsibility for my life.”
On the professional front, Price gradually came to understand that her greatest thrill was in the early stages of building up a company – not so much the mid-level executive at a public giant part. “That’s when I started to explore entrepreneurship as a choice instead of accepting the default of climbing the career ladder.”
Price left Sapient with the intention of taking some time off to explore her next venture. It wasn’t long before a casual lunch with Jeff Waughtal, co-owner of restaurant and concert venue Stubb’s and one of her first Monsterbit clients, turned into that next idea. Stubb’s was having issues with its ticket vendor and wanted to hire Price as a consultant to help vet other ticketing systems. But after taking a look at the expensive options already in the marketplace, Price had a better idea. “I went back to him and said ‘give me six months and I’ll not only solve your problem, but if you’ll be my first client, I think there’s a lot more we can do.’”
Waughtal and his entertainment booking partner Charles Attal (now with C3 Presents) saw an opportunity to create an alternative ticketing company for Austin and Dallas. Price recognized a chance to do it nationally. She describes the launch of Front Gate as a three-legged stool, with Stubb’s serving as the primary ticket client, Attal bringing the music relationships and herself serving as the operating partner, building the system and growing the company. After months of development, Front Gate officially launched in February of 2003.
Amy Corbin, a promoter at C3 Presents who consulted with Price on the creation of Front Gate was part of the small group that gathered late one night at Price’s home with bottles of wine for the site’s launch. “The first ticket purchased on front Gate was for Ludacris and I still have it today,” says Corbin.
In an industry that sometimes suffers from a forest-for-the-trees complex, Corbin says Price “brought along a refreshing new outlook to ticketing and the communication to venues, consumers and promoters. She had the ability to apply her software building models from a blank sheet of paper into one of the finest ticket companies in the country.”
Today, Front Gate Solutions Inc. powers the sale of more than 2 million tickets annually to thousands of events in 700 cities around the country. In addition to selling tickets directly, front Gate Solutions also licenses its software to third parties such as pre-sale ticket businesses and groups that want to run their own ticket sales.
Just as front Gate was ramping up in 2003, Price’s old Monsterbit pal Avery, who had been living in New York, was looking to return to Austin with his family. The two reconnected and Avery joined front Gate. “It was like trying to jump aboard a jetliner,” he laughs. “But we’ve written some pretty wildcat software through the years.”
‘Industry in flux’
Front Gate is the largest completely independently-owned ticketing company in the country. And it’s operating in a segmented ticket industry that could be in for a shakeup. At the moment, there are less than a dozen companies in front Gate’s class – meaning those selling a few million tickets annually. But there’s a big gap between that group and the giants like Tickets.com and Ticketmaster, which sell upwards of 70 million tickets annually.
In January, live nation, the largest U.S. concert producer as well as the owner or operator of more than 100 entertainment venues across the country, purchased Music Today, Front Gate’s largest competitor in the small-tier space, signaling its intention to compete directly with Ticketmaster. At the same time, those two giants are looking to merge as one, a move that some say could create a monopoly in the entertainment business and lead to a run-up in ticket prices. The Justice Department is looking into the proposed merger. As Price describes it: “The industry is in an immense state of flux.”
Price argues that Ticketmaster and Live Nation have been in an operating partnership for some time, so for the most part, “it’s as though they were one.” If the two do indeed merge, she hopes it creates new opportunities for Front Gate as an alternative to the big player.
“I think we’ve done a really good job building a positive brand image,” she says. “We’ve essentially spent seven years establishing a reputation as a rock-solid alternative.”
Not lost on anyone is the fact that, while many are floundering amid the recession, this Austin-based business is thriving and solidifying the capital city’s place in the industry.
“Front Gate has helped to define the Austin scene and bring it to a national level,” says Corbin. “We are the live Music capital of the World and we don’t just have concerts here, we have world class music companies that give Austin a broader appeal.”
Certainly with Front Gate hitting on all cylinders, its CEO could simply be satisfied that she’s built a strong competitor in a difficult industry and call it a day. But that wouldn’t be Price. Instead she and longtime associate and new business partner Jesse Jack are taking their collective experience and lessons learned into new markets through a venture dubbed Source Spring.
The idea of Source Spring is to provide business management and application development for micro-businesses, or those with less than $5 million in annual revenue, in exchange for equity in the company. Think of it as an alternative to venture capital.
“If there’s one thing that I want to accomplish with Source Spring,” says Price, “It’s that, by virtue of being involved in organizations through investment, partnering, mentoring, we’re continually inspiring those organizations to look for the truth in who they are.”
Already Source Spring has developed an application for an organization called Project Diabetes that allows patients to input their blood sugar levels wherever they are throughout the day via their mobile phone, laptop or other device. It’s also creating an application that helps solve a big pain point for medical professionals – incorrect input of medical codes.
“We’re partnering with good organizations that have good ideas but don’t have technology experience to see it through,” she says. “And in five years if we have a portfolio of a few dozen companies that we’ve worked with and a few of those have had achieved some success, then we’ll consider ourselves successful.”
Price hired Jack more than a decade ago when she was at Human code after he doggedly pursued working with her. “Jesse being my partner now is 100 percent a function of his track record in our professional relationship,” says Price. “He’s a great technologist, he understands business requirements. …and he’s a great guy who’s super balanced in his value of professionalism and humanitarianism.”
Jack says partnering with Price on Source Spring was never a question. “Even in the most difficult times of launching a startup, we were always able to play nice together, find common ground and work to make each other successful,” he says. if you have a business partner like that and they ask you to participate in a new venture, you don’t even think about it: it’s a given.”
Having faced firsthand the challenges of the micro-business, Jack says he and Price understand better than most the lack of resources and support that exist for such companies and their leaders. With Source Spring, he says, “we can fill that gap in mentoring, software tools, and bringing our partners together when we think there’s a good match. All of that is a lot of fun…and rewarding for us.”
Price argues that a lot of business schools fail to teach two things that she believes has helped her immensely in her career: intuition and practicality. to that end, she’s offering regular courses to the community through Source Spring on how to foster creative businesses that incorporate all of what she calls the “spices to success.”
Source Spring is also part of the group Capital Factory, which makes investments in and advises early-stage companies in Central Texas, and Price is one of the group’s mentors, offering feedback to early-stage companies trying to get off the ground.
“Mellie is real. She does not put up a façade about her management style. You know where you stand and her exact views,” says Tina Cannon, the CEO of Web-based startup PetsMD, an online resource for pet owners and one of the companies that Price is mentoring at capital factory. “She has an amazing ability to process and quickly provide a course of action while maintaining a high level of perfection and remaining true to her goals.”
Cannon says Price’s own background has given her the tools to help others in very specific ways. That kind of expertise is why PetsMD recently invited Price to join its board. “Mellie speaks the language. She has been there and remembers all too well what hurdles a new entrepreneur deals with daily.”
“Please make this story fun,” Price beseeches at the beginning of our chat. She’s mindful of the fact that stories on CEOs can be a bit tedious and she doesn’t want to inundate people with business speak. that’s sort of the way Price lives her life. Yes, she is a businesswoman. Yes, she’s launched, built and sold companies. and yes she’s immersed in a new project. But “this is the business of life,” as she puts it. “Source Spring reflects my desire to be on a more integrated path with both my personal and career lives.”
Her two dogs Opie and Nicholson are grounding forces in this CEO’s life. Long daily walks and trips to the dog park are stable parts of their routine, allowing her time to contemplate and play. But beyond just being constant companions, her pups reflect the very essence of Price’s life pursuits. “Dogs are unconditionally loving, they are forgiving, they are present and loyal. They embody a lot of how I would like to live my life. …Source Spring is about Jesse and I putting our money where our mouth is on having a work-life balance.”
Indeed Price is the kind of sassy lady you want at your party. The kind that will spark conversation and debate while still respecting everyone’s viewpoints. “It’s hard to have faith and confidence in a world that’s constantly testing all of that,” she says. “So I respect and value people’s beliefs and their right to them and I think I attract other people who also value that.”
“Mellie is always on, no matter what the setting,” says Avery. “She is so good with talking to people, just a complete networker.”
Price says she’s never really denied or hid her sexuality. She had her first girlfriend when she was just 15 – a relationship that lasted until the two parted for college. And while she says she never “flaunted” her sexuality at the workplace, she didn’t pretend to be something she wasn’t either. “I’m fortunate to be one of those people who, at least to my conscious awareness, hasn’t been dealt a card of complete aversion to that part of who I am.”
That’s not to say she didn’t face a bit of discrimination on other fronts. “I was a 20-something, whippersnapper – a woman – consulting with VPs and executive-level people at large publicly-traded companies about their technology decisions. It wasn’t always easy to be taken seriously, but I had the respect because I was such a key player in the early stages of the internet. I wouldn’t have wanted to enter the field five years later be- cause there were a lot more people and the barrier to entry was set low.”
Lucky for Austin and the community at large, Price did enter the field and become one of the city’s big success stories. That she is so respected by – and an example – her fellow entrepreneurs is something she doesn’t take lightly. “At the end of the day, it’s about making a difference in others’ lives, and leaving something more important than yourself behind.”