Right after publishing the blog post that I will participate in this year's Web Summit 2015 in Dublin I got a couple of requests by our startup clients. They in particular asked two questions:
• Why I break the rule, I preach all the time not to attend startup events?
• When breaking the rule why then by going to Web Summit, the event accused of being a scam?
Before continuing this article, I have to give a full disclaimer: I have been invited by the Web Summit team to do media coverage, especially on Fintech covered in the Money Summit.
There is no other affiliation nor have I been asked to publish an article about the allegations.
I have never been to Web Summit before, although I know the conference since its beginning, so I cannot give you a first-hand insight about participation in the past.
Still I deem it important to write about the subject matter as it is discussed also in Germany and it is a perfect occasion to illustrate some insights that are valuable for our readers, startups and (not yet) clients in general.
Valuing information quickly - the scam critique on Web Summit
The first insight is about how to evalue the fraud allegations on a general level as such situations repeat over time.
There is so much information – and (emotional) opinion snippets (aka Shitstorm) in the web that the first thing you need is a quick technique with which you can assess information in a very short time (the business case for structured feeds).
A simple, but effective way I found over time – albeit not being perfect - is to check the volume of reaction e.g. in form of comments. The danger is to overvalue emotional reactions leading to many comments (or good social media teams commenting) as they can be very far removed from reality, but it is one indicator.
With 55 and 12 comments on the relevant articles on Tech.eu you get the impression that the problem cannot be as huge compared to about 20000 participants in 2014
A second indicator is that most people preferred to remain anonymous. In this case, it is strange because it should not be a problem to tell your story when others did so openly. What do you have to lose as a start-up when you speak out against an event? They might not invite you or sell you a ticket in the future - so what? They are not your customers, nor your investors. And once you are in the unicorn club, they will invite you in any case. If not invited then, it is still a great media story, so why care.
Then there was another sentence in one article that caught my attention:
"In 2013, some startup founders desperately tried to get my attention (...). They were put in a separate room with hundreds of other attention-hungry startups, each receiving a small table and enough space to hang up their company logo on an A4 paper. Not a single investor or journalist dared enter that room, from what I can remember, and the real losers were of course the startups."
Mmm - a journalist does not dare to go into a room to a) first talk to potentially great start-ups or b) get a picture of the situation and then write about it. And this was already in 2013. Just noting the research approach.
Is this a defense or full whitewash of Web Summit?
Interview opportunity for start-ups!
As I have been invited for media coverage and I am always curios I decided to not focus on interviews with speakers but give you - the start-ups - a voice.
Just fill in the form and tell me, why you should be interviewed or we should meet. I am not interested in product pitches alone, but also in the problem you solve and how your solution fits in our today's context.
Does this mean to defend Web Summits marketing techniques in the past or future when they are making use of things as people claim e.g. in the following statement coming also from tech.eu
Examples aplenty: from toying with the number of attendees from a certain country that have purportedly signed up to buy event tickets (which Neil pointed out in his post) to actually showing logos from startups who haven't registered – and some not even ever heard of – the Web Summit. That is downright misleading and unethical.
Worse is that I've witnessed Web Summit go out of its way to hide from startups that they will need to pay to attend.
No, not at all. I will tell you that there are rules and laws concerning the use of numbers/statements in advertisements, with respects to misleading customers as well as with regards to logo usage. They are valid for Web Summit as well for your start-up (e.g. in the reference page or as reported in pages). It is only very difficult to verify this without the proper mandate and technology. This is why for such cases the corresponding institutions exit that should/will take care of it.
What I can validate from available material (see screenshot from Web Summits September 2015 page) is that other than cleverly turning the old marketing trick of tradeshows upside down (instead of free tickets for paid space you get free space and paid tickets) I cannot see that they stated it is all for free.
As this + the aggressive email marketing seems to be the core of the critique, I will list three methods you can apply for Web Summit as well as for any other offer to take a decision. Many companies have problems defining the service/product and the corresponding price. And sure, some do it intentional. But, I am often surprised how well they get away with it, as they are not questioned.
Method number one for star-ups/any businesses – fixate the deliverables and their costs on paper
The first skill a start-up founder has to acquire (as valid for any other business and your private life) is to read/understand offers and contracts especially when talking on the phone.
There is one simple rule: if something is unclear or you are not exactly sure what value you are getting in return for the money you have to pay, you at least want to draft an email that repeats and states on paper the most important points including
a) what you get, what is extra and what you have to take care off by yourself
b) what is the price you pay and what is for free.
It seems like an unnecessary formality in the in fast-moving "I'm your buddy" start-up world, but it is still the number 1 thing to do. And no, it does not save you from disappointments entirely.
Method number two: Cost/benefit analysis, an undervalued tool, but (nearly) as important as your start-up business plan spreadsheet
Second: Do a cost/benefit calculation of the event participation. I am not going to repeat all the critique you can have about events. I do not like events myself too much, as they take time, they are exhausting, you meet many people, which is nice, but stress and you have very bad eating and sleeping routines during these days. On the other hand, there is all the energy in the room.
It is all about the number of events start-up you go to
Still they are important and helpful in the right dose. Do you remember the rule from above for "my start-ups"? I am not telling them to never go to an event or tradeshow. I want to prevent that it becomes the main occupation they do, especially in times when entrepreneurship became a lifestyle thing and you can easily spend one or two years jumping from conference to meet-ups to conference surfing on this lifestyle wave. And there are so many events your start-up friends attend, too.
With this introduction, it all comes down to the costs and benefits you assign and deem to be realistic to reach with the conference, tradeshow or event you want to attend in the end.
The simple solution is to do a calculation. I do not mean a fancy Excel, but a simple out-of-pocket back of the envelope calculation:
- How is the event participation directly helping you to reach your business goals?
- How much do you have to spend, what is the value in return and what can you reach in three days?
Is the right target group for your purpose at the start-up conference?
For Web Summit for example I would be surprised as your start-up advisor when you tell me that you go there to do a sales pitch and find customers for a very well defined business-to-business target group that needs key account work. I would rather argue that you might not reach a target until you show me how.
On the other hand if your target group are the tech savvy consumers, sharing a life-style with the folks going to such conferences, you might have the time of your life while doing potential customer acquisition and simply getting as many contacts as you can giving short pitches about why they should try your product and sign-up. Do the math: You pay 1950 € for a team in the Alpha program. If each member collects on average 50 contacts a day (low), you will have 600 contacts. Let's assume you can convert 10% which means you paid 32,50 € per customer. Depending on your business context, it can be awfully high or extremely cheap.
Event/trade fair participation costs money
I will close this paragraph with just a few lines about booths as the have been mentioned in the other articles. You can debate in general whether you need a booth at all. You can debate if one table and an A4 logo is the right value for your ticket price. But do also consider the calculation for the investment of a decent booth display stand, some lighting, prints, then transporting it in an airplane and back (have done it). These are all things to clarify on beforehand as explained in nr. 1.
Summarizing, it all comes down to being selective about the events you go to. Do not do too many and do a calculation that you also later on can compare to see which event was good for your start-up for a given investment.
Insight number three – be realistic about your start-up team's time budget and add it to the cost benefit analysis
You have to do the preparation and the follow-up work. As a rule of thumb, I always ask the startups I work with when discussing a trade fair participation the following questions. Has the team the time resources to not only go there, but to also deliver the necessary preparation and follow-ups? Because nothing is worse than having great contacts and leads that you cannot do the follow-up offering something. This is the method to ensure a maximum ROI as a result from the events you are participating in.
What is unique about this Web Summit that I participating? Some examples:
With his general advice, once again back to the Web Summit and our participation to provide concrete examples. Why did I choose to go there besides the invite reducing my overall costs?
There are three reasons that I found considerable and which is for me the value add I considered in my cost/benefit calculations.
Access and selection
First with 30.000 attendance and over 1.000 speakers you can be sure to get a snapshot of what is going on in the eco system. I do not have to talk to all of them in order to understand this. But I have access to a selected group of top notch speaker to choose from. In order to get the same selection and sentiment my small team would need to do a lot of work.
An outside-international perspective is good from time to time
One pointed out to me that probably many Americans will participate which are not a natural target group for European companies.
Yes, when I discuss the state of a national ecosystem I also use this observation as an indicator called "start-up tourism".
Yes, our client base is mostly European – primarily German, Austrian and Italian based.
But in the 21st century you cannot limit the market analysis of technology to the local geography. To illustrate this point with one example I will pick up our SaaS practice in Germany. To make a long story short there is still a lot of catch-up to do in the cloud and SaaS environment. This fact translates into particular problems in the execution and business development for SaaS in Germany (some of them we address with our SaaS seminar). Now this might sound like a nice sales pitch for it, but in many areas there are international standards today, one eventually hits when competition starts. Look at the schedule for the Data and Enterprise Summit, which both include a track on cloud computing/SaaS. It is no surprise to find the majority of speakers are coming from the U.S.. And this is for a good reason. So I face the choice to either go to a U.S. conference or have it much closer.
Exactly the same argument applies to Fintech in the Money Summit. While discussions about Fintech are very often on a narrative level or very technical, important financial system issues are not on the agenda. At the Web Summit they are.
In conclusion: if you want to meet and talk @ the Web Summit let me know and look at the interview opportunity we are offering.
Check out our digital start-up service: 1h start-up consulting