Avoiding the Pitfalls of the Event Tech Founder’s Journey
By Michelle Bruno
April 24, 2023
Most first-time technology founders must feel their way through bringing an idea to market. For some, it’s easier than for others. But event tech founders arguably have a tougher time, especially when they come from outside the industry. Here are some thoughts to consider before you quit your day job.
Advice from founders who’ve been there
The event industry is very different from most other industries. To be a successful founder, “You need to spend time in the industry, learn about it and understand it,” says Jay Tokosch, former founder of event mobile app company Core-Apps and current founder of startup NoteAffect.
Customer service is crucial in the event market. “Even if you have a SaaS product, there’s a level of customer service expected in events. If you don’t provide that, you won’t last,” Tokosch explains. Core-apps had customer retention rates of over ninety percent. “Customer service was one of the reasons we lasted so long.”
Founding an event tech startup is difficult, says Marco Giberti, entrepreneur, investor, advisor, founder and CEO at Vesuvio Ventures. “If you have a low tolerance for risk, only want to work eight hours a day and aren’t prepared to spend five to ten years of your life in misery,” don’t become an event tech founder.
It takes a team to start a business. However, because many founders lack resources, “they try to do everything themselves and do things that are far from ideal in critical operational areas like finance and human resources,” Giberti explains.
Fundraising is a conundrum. Many founders either “raise money too soon or bootstrap for too long,” Giberti says. When you have money in the bank, you’re tempted to spend it [perhaps unwisely], and when you bootstrap for too long, you remain vulnerable. Either way, if the market softens, “someone else with resources will eat your lunch.”
There are good and bad reasons to start companies. “When an entrepreneur discovers a problem and becomes obsessed with finding a solution, that’s a good reason to start a company,” Giberti asserts. “When a founder says they’re starting a company because they want to make money, I usually run away.”
Hubris can get tech founders into trouble, says Rich Stone, CEO of event management and exhibitor marketing software firm EXPOCAD. “Founders sometimes develop tools in search of a problem and not the other way around.” There are many examples, Stone recalls, of now-defunct firms (VerticalNet, being a classic example) that believed they knew buyer-seller marketplaces better than exhibition organizers.
Founders who fail to understand users find it hard to get traction in events. EXPOCAD, Stone explains, was designed around the visual way exhibit salespeople sold space. “They got up and ran to the floorplan to see what space was available and what was sold. They didn’t go to their databases.”
The intense focus on the business drives many event tech founders to care more about the destination than the journey. “It’s easy to be concerned with EBITDA and profits,” Stone says, but founders should also be concerned about their motives, employee morale and customer satisfaction.
Most investors prepare for the wins, not the losses. “You can’t avoid pitfalls. It’s a matter of being ready and willing to start over, bounce back, reinvent yourself and your business, and move forward,” says Rachel Stephan, snöballer-in-chief of event marketing software company Snöball.
Resources for avoiding the pitfalls
DAHLIA+Agency offers Launch Shift Go, an “online course to help event-technology executives and entrepreneurs land softly and advance quickly in the U.S. business-to-business meetings, conferences, and tradeshows industry.
Marco Giberti teaches the Business of Events Masterclass, which “offers new ways for event organizers, event professionals, entrepreneurs and investors to identify challenges and opportunities and learn from concrete case studies and leaders across the industry.”
In a recent LinkedIn post, “Building the ‘perfect entrepreneur.’ Part I,’” Giberti addressed the critical skills he looks for from the founders he works with, including killer instinct, real passion, and the ability to “sell the dream,” attract the dream team and deal with failure.
Serial entrepreneur Lawrence Coburn famously (and generously) chronicled his founder journey in “The Mistakes I Made; Reflections on Nine Years Running DoubleDutch.” It should be required reading for all event tech founders.
If you want to learn more about event technology players and potential, reach out.