Background: StubHub is the New York-based ticket marketplace that lets people resell tickets they no longer need. It was founded in 2000 after its founder couldn't get tickets to a sold-out Broadway showing of The Lion King and decided to build a safer resale platform. StubHub went public on the NYSE last year, debuting with a market cap of US$8.6 billion.

What happened: StubHub is now being sued by customers after allegedly failing to deliver promised Soccer World Cup tickets. The timing isn't great for the company, which has already seen its share price fall around 30% since its IPO.

What else: While StubHub says affected customers will be refunded, fans who had already spent money travelling for matches aren't happy. Thousands of customers have flooded social media and joined a US$5 million lawsuit, alleging consumer law violations over the missing tickets. But StubHub never actually had those tickets in the first place - one of the key challenges of the marketplace model.

What's the key learning?

💡 The marketplace model means a business doesn't hold the inventory, but it still definitely holds the reputational risk. Even without owning the product being sold, the platform still carries the brand risk when something goes wrong.

💡 Platforms like StubHub sit between sellers with inventory... and buyers with money. The model is attractive because there's no inventory, no warehouses, and strong margins from transaction fees. But it only works if sellers deliver and buyers follow through.

💡 When a transaction fails, customers blame the brand they paid, rather than the seller. Regulators make them wear the blame too. For example, Uber was hit with a $21 million penalty in Australia over misleading fees and fares. In short, you can outsource inventory, but not accountability.