As John can attest to, I see the world in business terms. One common past time of mine is looking at particular industries and seeing how close they are to saturation, whether it’s time for consolidation, and who will consolidate with whom. Recently, I’ve been reflecting on two industries: tech conferences and Flex (maybe RIA) consulting. This post tackles tech conferences. I’ll make a separate post for Flex consulting.
The tech conference market is way past saturation. I foresee a consolidation happening soon and let’s be honest, it’s long overdue. Particularly with these smaller, lower cost conferences winning rave reviews over bigger, more expensive ones. I’m not tooting my own horn, as we can take 360Conferences out of the picture and still see the same effect. For example, FOTB vs FlashForward plus the rise of BarCamp style events.
Post 360Flex San Jose, we were in talks with various companies about conferences. The thing that struck me as odd was a statement made by someone in the conference space. “Conferences are big money.” Price points aside, there’s a lot of money involved in conferences. Our last event in Seattle made more than a quarter of a million for the Red Lion Hotel alone and we’re a tiny show in the conference paradigm. The same individual noted to us that if your conferences get big enough, hotels will pay your company for each room booked at their facility, etc. We don’t plan to ever have a show that big, but it was an interesting point to know.
Once we smaller events start to take away enough customers from the Big Shows, they will react. Right now, we’re seen more as mosquitoes that are more pesky than anything. Eventually though, these individual sores will add up. When a substantial decrease in per show revenue starts to take shape, that’s when the Big Shows will strike.
Currently, they could hurt us by simply dropping their price point to match ours. This will take care of the biggest differentiator between us and put us in more heated competition. They wont’ do that just yet though for two reasons: profits and budgets.
Let’s tackle profit first. Let’s say we small guys give them a 10% hit in their numbers. 90% of their old numbers is still a lot of friggin’ money. You can just hear some middle manager somewhere saying, “Why are we going to walk away from a cash cow? No one really takes those small conferences seriously.” Silicon Graphics said the same thing about PCs running Windows NT and look what happened there. Money makes you comfortable and slow. It’s one of the curses of success that companies must constantly strive to avoid.
Next comes budgets. People are amazed that John and I alone put on the 360Flex conferences. Granted, we have some temps hand out surveys, but that’s it. Now, we don’t do all the work, of course. We have partners (web hosting, ticketing, etc.) and a creative agency (for fliers, signage, etc.). However, our conferences currently do not support any full time staff. Nobody gets paid to work on 360Flex for their day job. You look at these Big Shows and companies, they have dedicated event staff demanding full time salaries. Some even have event departments.
Yes, John and I wouldn’t mind being full time employees of 360Conferences. However, the employee count should stop there. We’re hoping to never need more than 2 employees, but I’m guessing we’ll likely bring on board 1 more person in the future. (If for nothing else, to be the tie-breaker.) We will never have an office that we pay rent on. Nor will we ever have middle management or even peons. No work is below us and if it takes too much time to do, then we’ll find a partner to do it for us. For these factors alone, we’ll be able to out budget a majority of these high priced conferences. We need less, so we can charge less.
Therefore, as you can see, the Big Shows won’t be able to compete on our terms anytime soon so that leaves: mergers and acquisitions.
I’ll be honest. I think a lot on merging. I scan the landscape of just Flex/CF conferences and imagine consolidation to make it easier on attendees, speakers and even sponsors. For goodness sakes, there are 4 events between February and June of 2008 that serve the Flex/CF technologies: 360Flex in February, cf.Objective() in early May, WebManiacs in late May and CFUnited in late June. The crazy thing about the last two are that they are a month apart in the same city, Washington DC!
I thought about merging with Jared. We could easily rename CF.Objective() to 360CF or something of the sorts. It would be a good fit because it would give us a mid-US presence and he’s a low cost small conference as well. However, he’s dabbling in Flex so it’s not a straight CF show anymore. Plus, he’s growing exponentially so there’s no need for him to merge with us.
I also chatted with John about approaching Fig Leaf to merge with what was at the time FlexManiacs. Let’s face it. Fig Leaf is probably more interested in the training business their show funnels their way then they are about the show itself. Therefore, they should just shut down their show and become the premiere sponsor of our 360Flex East Coast shows. This will save them the time and hassle of trying to do their own show, but still drive whatever training business they want their way. However, they became WebManiacs so now that deal doesn’t make much sense. Plus, going up against CFUnited on CFU’s hometurf is suicidal.
CFUnited is tough to get a bearing around. It makes no sense for us to merge with them, because their an old skool Big Show type conference. At twice the price of the other shows mentioned, they aren’t shooting to compete with us. They do have their CFUnited Expresses though that is their approach to low cost conferences. If you’ve been to one of those Expresses, drop a comment and let me know your thoughts on them.
The way I see it going down now is WebManiacs dying off and CFU winning the DC front. CF.O chipping away at CFU and 360Flex trumping CFU’s play for the Flex attendees. CFU will then have to react to us, but I just don’t see how yet. If you care to speculate, drop a comment.
That’s just the Feb to June timeframe stateside events. 360Flex and CFU are both headed oversees this year. One conference on the other side of the pond that John and I are going to attend is Flash on the Beach. I’ve heard nothing but rave reviews about this show and how it’s ran. Hopefully, while we’re there, we can chat it up with John Davey. The refreshing thing is that he started FOTB for the same reason we started 360Flex: to fill a void. He’s in it for the community as are we, so it’ll be great to see what we can learn from each other. Davey competes against FlashForward, another of the Big Shows. While FF has its following, a lot of folks have said that it’s been going down for the past few years. Lynda is still probably licking her wounds from the failed DX3 fiasco, but it’ll be interesting to see how they react to FOTB. Like I said though, FF is a Lynda Event production which means to me there’s a bunch of staff sucking up budget money.
Well, that’s my thoughts. Remember, they’re just that: thoughts. No merger talks ever took place. No consolidations are going down (that I know of). However, if you agree (or disagree) express yourself in the comments. I look forward to the dialog.