I find conferences interesting…especially the prospect of running my own conference. There’s something potentially rewarding about bringing people together in the real world, helping them connect, and providing a communal experience around a shared interest.
From a logistical perspective, I love how conferences have a beginning and an end. For an entrepreneur like me who likes to start things…conferences are perfect cause you basically get a brand new chance to start fresh every year. If things didn’t work out the previous year, you have the chance to execute on an entirely new experience the next year.
I also love that conferences have an end date…which is a refreshing change to the continual grind of normal businesses, where it can feel hard to take a break or even a vacation. With a conference…I imagine you can take a pretty long break before resuming with the following year’s planning and prep.
An the flip side to the seasonal nature of this business, producing these conferences year after year does require quite a bit of energy and time. There’s not much about this revenue that’s passive or recurring…two revenue traits that bootstrap entrepreneurs typically look for in appealing business models.
I mentioned in an earlier post that I often think of running a conference as one of several businesses I’d want in my life…and I find myself thinking about it a lot more lately. The conference I keep thinking about is around bootstrapping. The way I see it, the bootstrap community is a grossly underserved segment of the startup community. There are much more resources available for venture backed startups compared to bootstrapped startups…from books, to blogs, to programs, to conferences…bootstrappers are largely left to fend for themselves. That just doesn’t sit well with me.
The only conference I could really find for bootstrappers is a conference called Microconf, which hosts around 200 attendees a year. Compare that to 2 of the largest conferences targeted to venture backed startups…the Launch conference, which hosts over 15,000 attendees, and the Startup Grind conference, which hosts over 3,000 attendees.
Is there that little interest in bootstrapped startups? Something is wrong with this picture…and it’s something I’d like to help fix. But if I were to pour any energy and resources into this…I’d need to first know that the financials make sense. As much as I’d love to altruistically pursue this mission, I’d honestly need to run the numbers to make sure there’s a sustainable business opportunity here.
One thing I’ve been noticing is that many conference producers is claiming there’s really no money to be made in conferences. I recently heard on an interview with the producer of the Hubspot Inbound conference, that they mainly view their conference as a loss leader for the benefit of Hubspot branding. Can this really be true? Let’s do some quick back-of-the-napkin math.
The Hubspot Inbound conference has 14,000 attendees at an average ticket cost of $500. They have higher tier tickets at $1,500 and $2,000….but let’s just assume all tickets are sold at $500. That’s $7 million dollars in ticket sales alone. Now let’s take the other large bucket of conference revenues, sponsorships. Looking across their 5 sponsorship packages, I calculate they book around another $1 million in sponsorship revenue. I’m sure this is a pretty rough estimate, but my guess is total revenue from the event is in the ballpark of $8 million. I’ve no idea the cost of producing the event, but $8 million sounds like a pretty healthy number to me.
Now, let’s run some back-of-the-napkin math for producing a hypothetical bootstrap conference, just to get a rough understanding of the financial viability of this idea. Now bear with me, I’m sure these numbers are way off, as I’ve never in my life produced a conference and I really have no idea of actual costs. All the numbers below are guesstimates at best.
Let’s start with some assumptions and goals.
Let’s say for the first year, our target attendee count is 500, this will be a 2 day conference, and there will be 10 speakers. There will be no meals provided…just coffee, drinks, fruit, snacks, and maybe some breakfast items at best. We’ll have 3 paid staff during the conference, in additional to some volunteers. We’ll try to get volunteer speakers, but we’ll most likely still need to pay for their travel expenses.
Here’s a hypothetical breakdown of some costs:
- Venue – $5,000/day – $10k total
- Snacks & Drink – $20/head – $10k total
- Speakers – $1,000/speaker – $10k total
- Audio/Visual – $2,000
- Marketing Collateral – $1,000 total
- Conference T-shirts – $5,000 total
- Staff – $250/day – $1,500 total
I’m sure there are other costs I’m not accounting for, like internet access, etc…but my really rough estimate is a total conference cost of around $40,000.
Now let’s take a look at projected revenue. Let’s say my target ticket price is $400, which is pretty low, since our target audience are bootstrap entrepreneurs and typically budget conscious. Looking at the only other bootstrap conference, their ticket price is $800…so our $400 target price should be a good starting point. Total ticket sales for a 500 attendee goal would net out at around $200,000.
For sponsorship, my goal would be to have tiered sponsorship packages, totaling 10 sponsors in all. 2 gold sponsors at $6k each, 4 silver sponsors at $4k each, and 4 bronze sponsors at $2k each. This would total $36k in sponsorship revenue.
This sponsorship projection and goal sounds about right, as I’ve read several conference strategies that recommends having your sponsorship revenue cover the hard costs for the event, and having ticket sales cover cost of organizer and staff’s time and efforts. Ideally, there might even be an opportunity to sell through to a platinum sponsor, like Google for Entrepreneurs, who may have a missional purpose to help see that this event succeeds…and might be able to write a pretty large check far beyond normal sponsorship dollars.
Not sure how realistic any of these numbers are, and I’m not even sure if these revenue numbers sound at all interesting to me from a financial gain perspective. I do think that it’s worth at least taking this conference idea to next step of my typical business brainstorming process. Usually, after I validate some “back-of-the-napkin” financials, as I’ve done above, to see if the numbers seem viable/interesting…I’d then create a landing page or website to flesh out the entire concept from a marketing and customer perspective. This process helps me viscerally test if this idea makes sense and if it seems compelling…and of course it becomes the tool used to share with others to get feedback.
Still not sure if I’ll be pursuing this conference idea…but stay tuned…I’ll spend a little time creating a website for this to explore if this is something that might be interesting to bring into the world.