My opinion about startup conferences has… shifted over the last few years.
And when you are paying hundreds, sometimes thousands of dollars for a ticket, plus flights
and hotels for you and your team… you just can’t ignore the question of ROI.
Hanneman: Radio on the Internet.
I am attending a bunch of conferences this quarter.
Speaking out to a few of them, but for the others, I did have to pay for my ticket.
And it's not a small price
so why are those tickets so expensive? Who is keeping all this cash? Because for any startup business
a $1,000 ticket or that $5,000 booth on the ‘Startup Alley’ is a big decision.
And for them conferences tend to promise customers, investor intros, round tables,
and meeting Lupita N’yongo for some reason,
and if you’re looking for that- a conference might not be the place.
So I sat down with conference organizers who agreed to share numbers they hadn’t
shared publicly before. We looked at dozens of industry insights,
and the main thing we learned is that conferences are an extremely risky business.
Despite the expensive tickets and the super expensive sponsorships and booths,
organizers barely make any money, and a fair share of them closes at a loss.
So, let's talk about the actual numbers behind startup conferences in today’s Company Forensics.
Now, before I get into breaking down that ticket price,
let me spend 45 seconds talking about whether or not they are worth it for you.
I've been to a fair share of conferences and trade shows, from SaaStr to Collision to SXSW.
And I went from ‘I just can’t see the ROI’, to actually enjoying them lately.
And the key here is embracing networking.
Visiting booths is cool. Only a handful of talks will be insightful (like the
one I’m doing in Saastr and Saastock next month), but the core of this is NETWORKING.
It’s not sales, you won’t be able to quantify the value (we did a whole video on whether the booth
was worth it). But if your position, if your job, your company requires you to meet people,
partners, collaborations, other founders… there are few spaces
other than conferences where you can get so many relevant people in the same room.
So I went from a full schedule of keynote to keynote, taking notes and paying attention-
to skipping most of the talks, and just spending the day chatting with people. Truly!
I kinda suck at that (I’m an introvert), so my cheat sheet is bringing my team with me.
I wouldn’t have thought that networking as a team is easier, but it really is.
Team networking is so much easier!
Also, we have Youtube now. It’s been crazy to see how people recognize my face, or at
least have heard of Slidebean- so it’s also a test on the effectiveness of our marketing.
If you didn’t know yet, we’re not in the business of making
videos- Slidebean is a platform for founders to scale their startups.
Also, by all means, I’m speaking about real in-the-flesh events. Those virtual things
are so 2020. Real humans with real beers in their hands. Beer is a key to networking.
Ok, let’s talk about numbers now.
Conferences are a massive business. In the US alone, in 2018, there were 1.8
million conferences, conventions, and trade shows, that generated 3.2 Million
jobs. This is a $381 BILLION industry (with the shittiest margins, but I’ll get to that).
Even if we reduce our scope and we focus on the tech world, there are still hundreds of
conferences happening all over the US and the world.
And there are niches within niches- but in this niche that it is startups- and SaaS,
Saastr, and Saastock are the (competing) leaders.
So, Saastr was started by Jason Lemkin.
In 2012 he had made a name for himself after selling Echosign to Adobe for some good money.
He started blogging and answering questions on Quora, and in a matter of months,
started bouncing the idea to convert this audience to a meetup. Fast forward 10 years to this this.
They’ve operated their US conference for almost a decade,
and the first thing you’ll assume is that this is a large organization.
So 15 people organize this massive event, with hundreds of speakers,
hundreds of sponsors, and thousands of attendees. All of this work
in an entire year sprinted and compress to this 3 days event.
And COVID almost killed them in 2020. I’ll bring that story in a sec.
But precisely because of they started organizing their events outdoors, and it was a HIT!
Add to that free food, and BOOZE! It’s a festival
vibe. A big evolution from the loomy hotel they used to have.
But the better vibe, the better backdrop for photos
doesn’t come close to guaranteeing profits, it just makes things riskier.
When they started, it took them 3-4 years to see any profit from their early conferences.
Moreover, costs rack up quickly. These aren’t thousands of dollars in food or production;
we are talking hundreds of thousands, sometimes million on a single item.
So if we were to cut this ticket to understand how much went to each thing,
we’d have to start by extending it with sponsors.
Sponsors and booths end up funding a good portion of your costs.
Add to that that many ticket sales happen in the last few weeks before the event.
That is why tickets get more expensive towards the last few days, because their
risk is higher (and also FOMO and pressure for the buyers who decide last-minute).
BTW if you are one of those last-minute buyers,I’ve got some codes for you.
Like I said I’m speaking at both of these competing conferences, and Saastr SF gave me a 30%
discount code you can use. Just type in Slidebean at checkout or use the link in the description.
But back to my point- If they miss their ticket sales mark, they are in the
hole for things they already paid for, for things that they already committed.
And nowhere was that a bigger hit than in 2020.
So there’s a possibility that you can LOSE millions of dollars.
Also, you won’t know how much money you actually made until the very last minute.
So why go through the trouble?
Many companies have leveraged their reputations to create events massive events.
It seems like a natural evolution for a platform such as SaaStr, TechCrunch, or us to make that
leap and go beyond the screen. It was time to exploit that potential and meet people.
These human connections are worth more than online connections. I understand that now,
and it’s one of the reasons I’ve been forcing myself to attend more if these.
Companies and Media outlets that take the risk are looking to maximize their company reach,
to consolidate a digital presence into the physical world.
It’s the same reason sponsors have booths, it makes those customer connections real.
It’s like the anti-Metaverse.
For many organizers, that connection IS the reason why it’s worth it.
For us, I just hope that now it feels like the ticket isn't a complete waste of money.
I hope to see you on the conferences that are happening in the next couple of months
if not, make sure you hit that subscribe, and we'll see you next week