Rethinking the DEMO, TechCrunch 50 Megalaunch

Wow.  The blogosphere has erupted into a near riot after Robert Scoble’s “companies launching at DEMO suck” series of blog posts.  The discussion has understandably been emotion-filled, but other than some really good link-bait, I’m not sure much value is coming out of it.

What I’ve been thinking about a lot though is how the “big conference launch” fits into our plans here at BuzzStream.  We’re a micro-financed business, so we look long and hard before undertaking a big expense like a conference launch.  I think the beat down that some of the DEMO companies took occurred because their approach to launch marketing doesn’t match the economics of their business.  There’s been a lot of talk about how the economics of building a product have changed.  The economics have never been better for starting a business and the way that companies get funded and products get built has fundamentally changed.  The problem is that, while a lot of companies have bought into the “micro” strategy for developing a product (small team, low financial commitment, etc.), they’re holding on to the traditional, big bang approach to getting the word out.  There’s nothing wrong with this approach for the traditional VC-funded company, but I’m not sure it makes sense for businesses like ours.

FACT: There’s too much that has to be done for these conferences in so little time, so something is almost guaranteed to suffer. For many of the DEMO companies, their marketing efforts appear to have taken the hit.

The cost and time required for the traditional, big-bang, big conference launch adds up quickly…and yeah, I know, TechCrunch 50 is free, but the entry fee is just where your costs begin.  Let’s look at an example.  My co-founder, Jeremy Bencken, was invited to present at DEMO to launch Tenant Market a couple of years ago.  In addition to the entry fee, he calculated the following costs for even a bare-bones approach:

1. devote 80 hours to prep time.  At $100 an hour, that’s $8K.
2. Speaking coach – $5K
3. Travel – three nights for three people – $6K
4. PR rep – $10k to $20K (lots of variation depending on the quality of the PR professional and the required retainer)
5. Booth, collateral, SWAG, etc. – $3K to $5K

So you’re looking at around $40K in addition to the entry fee.  On top of this, doing a big launch is similar to moving into a bigger house and suddenly realizing you need new furniture, art, etc.  If you look at what Scoble is keying off of, it’s the website of the DEMO companies….another big cost, and one you wouldn’t associate at first with the cost of a big conference launch.  When you go with the big launch though, you’re now expected to have the perfectly designed marketing website with the perfectly crafted message leading to the app that scales to an unlimited number of users.  LOTS more time and money for that.  For us, it just doesn’t make financial sense.  And we don’t view it as necessary either because we don’t think it’s aligned with how most micro-financed businesses typically grow.

Again, I’m not suggesting that shows like DEMO and TechCrunch 50 aren’t valuable.  For the right company, there are few marketing vehicles that can have as big of an impact.  A good showing can single-handedly change the trajectory of a company and put it on the map.  But we just don’t think that the big bang launch is aligned with the economics for a micro-financed business…and we look at going down that route as more than just a marketing decision.  It’s a decision that impacts the company’s core strategy.

For us, it just feels more comfortable to go with a more measured, “slow burn” approach to our launch.  We look at the initial launch as just a step in the process….and hopefully along the way our product will grow, our message will get better, we’ll continue to build relationships and our skills at link building, blogger relations and social media marketing will continue to improve.