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A bi-weekly column with timely, relevant and possibly irreverent insight into the BC technology industry.

Something Ventured:
October 6th, 2006


By Brent Holliday
Greenstone Venture Partners

Trade Shows: Boondoggle or Boo-Yah!

“Her ego wrote cheques incredibly fast,
But her personality didn’t have the cash,
I laughed out loud to my total dismay,
She ain’t pretty, she just looks that way.”
– Northern Pikes, She Ain’t Pretty

Ah, trade shows… the necessary evil for technology companies.  They are necessary for getting access to concentrated customer groups and getting PR messages out to the world.  But they cost money, can cost the company dearly if the show is a disaster and tend to be drunken boondoggles for marketing and sales types (and the odd investor/board member that attends… ahem).  I just attended my millionth trade show since first attending one in business school in 1992 in Florida.  I was supporting my company ICEsoft (www.icesoft.com) at AJAXworld in Santa Clara.  As I flew home, surrounded by heavily festooned bag/knapsacks full of marketing material, t-shirts and pens, I reflected on my years of experience at these things and came up with some immutable laws for start-ups attending trade shows.  If you want to get more than a hangover and a bag full of magic eight balls, then follow these sacred laws:

Law #1 – Thou Must Go To The Right Show – Face it, you have to go to trade shows.  Whether you are attending to gather information on the market or presenting your company and/or products to the masses, you have to attend.  Depending on your market space and the relative hype around it, you may have many, many choices of trade shows or conferences.  If you are simply attending to gather info, you needn’t be as picky as if you are attending to present or exhibit.  When you are shelling out big money (see Law #2), you need to get to the right show.

As a start-up prudently spending money, do your homework on attendance of shows and quality of speakers.  Be skeptical of new shows unless they are run by big, established event companies.  Call sponsors and ask if they feel it is worth their time and money.  Ask the PR agencies which shows are hot and which are not.  Do not attend every show.  Pick one with good coverage of the market, the “can’t miss” show of the year in your space and then attend smaller ones only if the customer mix is different than the other shows. 

Law #2 – Thou Shalt Spend The Marketing Tax – Grit your teeth and prepare to pay up, once you have chosen the right show to present at.  You have to get the show organizer on the phone and bulldog your way into a good uncluttered location.  You will have to pay more to be near the door or beside the big gorilla in your space.  But do it.  Do not end up in the back beside the empty couches and the washroom.  If you are getting speakers, be a bulldog and get uncluttered speaking time.  Pay up for the “keynote” or at very large shows, get some quality speaking time (never just before lunch and never late in the day). 

This is so important.  Do not try and save money here.  Pay the marketing tax to the show organizers.  Even a snazzy booth and great products will get lost if you are in a bad spot with terrible speaking times.

Law #3 – Thou Must Have A Real Product To Sell – Spending PR dollars and big trade show dollars to “pre-launch” you product is like pouring money down a hole.   Those games don’t work anymore and if they do, they only work for the biggest companies with many product lines.  A little start-up looking to make a big impact and grab a few lead customers cannot stand straight faced in a booth and say general availability will be in July 2007.  Not when all the others are selling today.  Only attend trade shows as an attendee before your product is ready for prime time.  Laws 1 and 2 only work if you can satisfy the curiosity of the customers (and your competitors) with real, demonstrable product. 

If you are a highly technical product selling into a very sophisticated market (life sciences, optical networking, embedded design for example) where the product takes years to develop, then there is a caveat to Law #3.  Having your CTO attend conferences as a speaker to launch white papers ahead of the product is OK, as long as the technical discussions don’t tip the hand on your product too much and your IP is still protected.

Law #4 – Thou Must Train And Test Your Floor Staff – Forget the booth babes (Law #6) and train your staff rigourously on your product and its core benefits.  Your staff must be able to recognize a customer or important potential partner.  There must be a plan to refer these important people to the right staff member and/or to refer more technical questions to the right staff member.  Your staff cannot have their valuable floor time eaten up by some VC who is an investor in your chief competitor (amazing how many companies don’t know this law) or some know-it-all technical wiz looking to pooh-pooh your invention.

Test your staff before they go with highly technical questions.  Make sure they refer before divulging anything that is a) wrong or b) secret.  Engineers love to defend their creation.  If they are on the floor, they need to know that you are marketing and “marketing” does not mean a throw-down-drag-out argument to win points over any propeller head that strolls along.  Core competencies of the product.  Key differentiators versus competition.  Make sure their badge is scanned or their card is procured.  Recognize a windbag and have an “exit” strategy.

My horror story from the AJAXworld show is about a company who announced their big new strategy for their product (open source) and had a booth full of new hires.  A couple of small problems… they did not have a product yet (Law # 3) and they had ill-equipped staff that didn’t know basic questions that customers were asking.  It seemed that everyone was referred to the founder/CTO and he was quickly swamped.  This company was small and entering a crowded market already for AJAX tools.  They left the show as no threat to anyone and I would imagine, little follow-up.  In short, a trade show disaster.

Law #5 – Thou Shalt Get An Honest Assessment Of Your Performance – Marketing people get so hyped up at these shows and tend to overestimate the actual success of your company at the show.  You can get jazzed easily after a few positive conversations with potential customers and a few dozen cups of coffee.  The reality is that you need to do a holistic assessment.  Is your booth busier than your competition?  It is natural to want to skewer your competition (as part of Law #4, you might want to have key weaknesses of the competition ready for your staff).  But an honest conversation with customers away from your booth about what the competition is saying about you and what they are touting as their advantage is important.  Send out your secret shopper to talk to the competition and overhear their pitch to customers.  Bring back their key messages.  Find out who they think is a threat in the market (hopefully it is you).  Talk to and listen to the people attending… don’t just sell them.

Law # 6 – Thou Shalt Not Do Gimmicks – Booth Babes, hired pitch men, free booze and any handout that will a) cause you to check a bag going home on the plane, b) increase your threat level at airport security or c) cause head scratching when the bag is emptied later because there is no logo or reference to what you do on the freebie is a No No.  Big signage, bright colours, stand-out uniforms, great collateral (more on that in a minute) and strong visuals (video, photos, charts) are the ways to attract people to the booth.  Gimmicks are hokey.  They make you look desperate.  Free booze is the worst of all of them.  Sponsoring a free drink up for 5 minutes of uncluttered pitching to the people who are already tipsy and will not remember where their hotel room is, let alone who paid for their booze, is a colossal waste of money.  At another conference I was at last year, the whole bar was open in the hotel and after three 15 yr old single malts and a couple of equally expensive cigars, I forgot my own name, let alone the sponsors.

Good collateral is to the point.  It is not pages and pages of stuff that I can read from your web site if I am interested.  It is hard hitting on the key differentiators and advantages of the product.  It is coordinated with your entire marketing push in design and feel.  In order to be cost effective, there are usually two levels of collateral.  The quick punchy inexpensive postcard that everyone gets at the show and the more detailed spec sheet/product description that is behind the booth or under a table ready to be handed to those that show keen interest.

Law #7 – Thou Must Follow Up Relentlessly – The trade show gets you nowhere if you don’t properly collect, prioritize and sort the leads generated on the floor.  Follow up must happen within a week in order to keep the lead fresh.  So many companies collect the cards and then put the stack on the sales guy’s desk when they return and never think of the people again.  It is a sin to spend the money at the show and then let the warm leads die afterwards.  If you don’t have a process to deal with lead generation, then get one.

While they cost big money, take away valuable employee time setting up and tearing down booths and take enormous organization, the trade shows are a necessary part of growing your technology business.  For me, they have always been the best barometer for your investment or the best way to check out the industry before you invest.  Just follow the laws of trade shows and they should work out for your company.

What Do You Think? Talk Back To Brent Holliday

 



Something Ventured
is a bi-weekly column designed to supplement the T-Net British Columbia web site with some timely, relevant and possibly irreverent insight into the industry. I hope to share some of the perspective and trends that I see in my role as a VC. The column is always followed by feedback (if its positive or constructive. I'll keep the flames to myself, thanks).

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