A key marketing tool for companies is to hold an event like a user’s conference or a topical forum to build relationships with their customers and partners, drive additional revenue and/or generate business development opportunities. Azure held its 11th annual CEO Summit last week, and as we’re getting great feedback on the success of the conference, I thought it might be helpful to dig deeply into what makes a conference effective. I will use the Azure event as the example but try to abstract rules and lessons to be learned, as I have been asked for my advice on this topic by other firms and companies.
Step 1. Have a clear set of objectives
For the Azure CEO Summit, our primary objectives are to help our portfolio companies connect with:
- Corporate and Business Development executives from relevant companies
- Potential investors (VCs and Family Offices)
- Investment banks so the companies are on the radar and can get invited to their conferences
- Debt providers for those that can use debt as part of their capital structure
A secondary objective of the conference is to build Azure’s brand thereby increasing our deal flow and helping existing and potential investors in Azure understand some of the value we bring to the table.
When I created a Wall Street tech conference in the late 90’s, the objectives were quite different. They still included brand building, but I also wanted our firm to own trading in tech stocks for that week, have our sell side analysts gain reputation and following, help our bankers expand their influence among public companies, and generate a profit for the firm at the same time. We didn’t charge directly for attending but monetized through attendees increasing use of our trading desk and more companies using our firm for investment banking.
When Fortune began creating conferences, their primary objective was to monetize their brand in a new way. This meant charging a hefty price for attending. If people were being asked to pay, the program had to be very strong, which they market quite effectively.
Conferences that have clear objectives, and focus the activities on those objectives, are the most successful.
Step 2. Determine invitees based on who will help achieve those objectives
For our Summit, most of the invitees are a direct fallout from the objectives listed above. If we want to help our portfolio companies connect with the above-mentioned constituencies, we need to invite both our portfolio CEOs and the right players from corporations, VCs, family offices, investment banks and debt providers. To help our brand, inviting our LPs and potential LPs is important. To insure the Summit is at the quality level needed to attract the right attendees we also target getting great speakers. As suggested by my partners and Andrea Drager, Azure VP (and my collaborator on Soundbytes) we invited several non-Azure Canadian startups. In advance of the summit, we asked Canadian VCs to nominate candidates they thought would be interesting for us and we picked the best 6 to participate in the summit. This led to over 70 interesting companies nominated and added to our deal flow pipeline.
Step 3. Create a program that will attract target attendees to come
This is especially true in the first few years of a conference while you build its reputation. It’s important to realize that your target attendees have many conflicting pulls on their time. You won’t get them to attend just because you want them there! Driving attendance from the right people is a marketing exercise. The first step is understanding what would be attractive to them. In Azure’s case, they might not understand the benefit of meeting our portfolio companies, but they could be very attracted by the right keynotes.
Over the years we have had the heads of technology investment banking from Qatalyst, Morgan Stanley, Goldman, JP Morgan and Jeffries as one of our keynote speakers. From the corporate world, we also typically have a CEO, former CEO or chairman of notable companies like Microsoft, Veritas, Citrix, Concur and Audible as a second keynote. Added to these were CEOs of important startups like Stance and Magento and terrific technologists like the head of Microsoft Labs.
Finding the right balance of content, interaction and engagement is challenging, but it should be explicitly tied to meeting the core objectives of the conference.
Step 4. Make sure the program facilitates meeting your objectives
Since Azure’s primary objective is creating connections between our portfolio (and this year, the 6 Canadian companies) with the various other constituencies we invite, we start the day with speed dating one-on-ones of 10 minutes each. Each attendee participating in one-on-ones can be scheduled to meet up to 10 entities between 8:00AM and 9:40. Following that time, we schedule our first keynote.
In addition to participating in the one-on-ones, which start the day, 26 of our portfolio companies had speaking slots at the Summit, intermixed with three compelling keynote speakers. Company slots are scheduled between keynotes to maximize continued participation. This schedule takes us to about 5:00pm. We then invite the participants and additional VCs, lawyers and other important network connections to join us for dinner. The dinner increases everyone’s networking opportunity in a very relaxed environment.
These diverse types of interaction phases throughout the conference (one-on-ones, presentations, discussions, and networking) all facilitate a different type of connection between attendees, focused on maximizing the opportunity for our portfolio companies to build strong connections.
Step 5. Market the program you create to the target attendees
I get invited to about 30 conferences each year plus another 20-30 events. It’s safe to assume that most of the invitees to the Azure conference get a similar (or greater) number of invitations. What this means is that it’s unlikely that people will attend if you send an invitation but then don’t effectively market the event (especially in the first few years). It is important to make sure every key invitee gets a personal call, email, or other message from an executive walking them through the agenda and highlighting the value to them (link to fortune could also go here). For the Azure event, we highlight the great speakers but also the value of meeting selected portfolio companies. Additionally, one of my partners or I connect with every attendee we want to do one-on-ones with portfolio companies to stress why this benefits them and to give them the chance to alter their one-on-one schedule. This year we managed over 320 such meetings.
When I created the first “Quattrone team” conference on Wall Street, we marketed it as an exclusive event to portfolio managers. While the information exchanged was all public, the portfolio managers still felt they would have an investment edge by being at a smaller event (and we knew the first year’s attendance would be relatively small) where all the important tech companies spoke and did one-on-one meetings. For user conferences, it can help to land a great speaker from one of your customers or from the industry. For example, if General Electric, Google, Microsoft or some similar important entity is a customer, getting them to speak will likely increase attendance. It also may help to have an industry guru as a speaker. If you have the budget, adding an entertainer or other star personality can also add to the attraction, as long as the core agenda is relevant to attendees.
Step 6. Decide on the metrics you will use to measure success
It is important to set targets for what you want to accomplish and then to measure whether you’ve achieved those targets. For Azure, the number of entities that attend (besides our portfolio), the number of one-on-one meetings and the number of follow-ups post the conference that emanate from one-on-one are three of the metrics we measure. One week after the conference, I already know that we had over 320 one-on-ones which, so far, has led to about 50 follow ups that we are aware of including three investments in our portfolio. We expect to learn of additional follow up meetings but this has already exceeded our targets.
Step 7. Make sure the value obtained from the conference exceeds its cost
It is easy to spend money but harder to make sure the benefit of that spend exceeds its cost. On one end of the spectrum, some conferences have profits as one of the objectives. But in many cases, the determination of success is not based on profits, but rather on meeting objectives at a reasonable cost. I’ve already discussed Azure’s objectives but most of you are not VCs. For those of you dealing with customers, your objectives can include:
- Signing new customers
- Reducing churn of existing customers
- Developing a better understanding of how to evolve your product
- Strong press pickup / PR opportunity
Spending money on a conference should always be compared to other uses of those marketing dollars. To the degree you can be efficient in managing it, the conference can become a solid way to utilize marketing dollars. Some of the things we do for the Azure conference to control cost which may apply to you include:
- Partnering with a technology company to host our conference instead of holding it at a hotel. This only works if there is value to your partner. Cost savings is about 60-70%.
- Making sure our keynotes are very relevant but are at no cost. You can succeed at this with keynotes from your customers and/or the industry. Cost savings is whatever you might have paid someone.
- Having the dinner for 150 people at my house. This has two benefits: it is a much better experience for those attending and the cost is about 70% less than having it at a venue.
I have focused on using the Azure CEO Summit as the primary example but the rules laid out apply in general. They not only will help you create a successful conference but following them means only holding it if its value to you exceeds its cost.
Last June I wrote about why Kevin Durant should join the Warriors
If you look at that post, you’ll see that my logic appears to have been born out, as my main reason was that Durant was likely to win a championship and this would be very instrumental in helping his reputation/legacy.
Not mentioned in that post was the fact that he would also increase his enjoyment of playing, because playing with Curry, Thompson, Green and the rest of the Warriors is optimizing how the game should be played
Now it’s up to both Durant and Curry to agree to less than cap salaries so the core of the team can be kept intact for many years. If they do, and win multiple championships, they’ll probably increase endorsement revenue. But even without that offset my question is “How much is enough?” I believe one can survive nicely on $30-$32 million a year (Why not both agree to identical deals for 4 years, not two?). Trying for the maximum is an illusion that can be self-defeating. The difference will have zero impact on their lives, but will keep players like Iguodala and Livingston with the Warriors, which could have a very positive impact. I’m hoping they can also keep West, Pachulia and McGee as well.
It would also be nice if Durant and Curry got Thompson and Green to provide a handshake agreement that they would follow the Durant/Curry lead on this and sign for the same amount per year when their contracts came up. Or, if Thompson and Green can extend now, to do the extension at equal pay to what Curry and Durant make in the extension years. By having all four at the same salary at the end of the period, the Warriors would be making a powerful statement of how they feel about each other.
Amazon & Whole Foods…
Amazon’s announced acquisition of Whole Foods is very interesting. In a previous post, we predicted that Amazon would open physical stores. Our reasoning was that over 90% of retail revenue still occurs offline and Amazon would want to attack that. I had expected these to be Guide Stores (not carrying inventory but having samples of products). Clearly this acquisition shows that, at least in food, Amazon wants to go even further. I will discuss this in more detail in a future post.