Eric Kavanagh: Ladies and gentleman, hello and welcome back once again to Inside Analysis. My name is Eric Kavanagh. We're going to be talking with a real thought leader in the whole space of events and it's a pretty hot event you guys may have heard about, called South By Southwest (SXSW). It's got a whole interactive component these days. It's not just movies and music. It's a lot of technology and really a lot fascinating stuff going on. We're talking to Chris Valentine. He is the organizer for the South By Southwest Accelerator program. Chris, first of all, welcome to the show.
Chris Valentine: Welcome and thanks for having me.
Eric Kavanagh: Sure thing. Why don't you walk us through what the Accelerator is, where it came from, and what it's all about for you?
|Deadline: November 7th @ Midnight for 2015 Showcase
Chris Valentine: Sure. The South By Southwest Accelerator is a platform to allow early stage companies to pitch their product or services to industry experts, VCs or high-profile media personnel. The event started in 2009, so this will be our seventh year, happening on March 14th and 15th in Austin, Texas. We're looking for another great event and to see some great, great startups.
Eric Kavanagh: You're talking about innovation, so these are cool companies that have cool ideas and they're looking to get off the ground. I think one of the rules is they have to have less than five million dollars in venture capital and the owners of the company have to be active participants in what's going on, right?
Chris Valentine: Yes, to your point, less than five million in funding, and they have to have launched their product or service within one year prior to the March 15th event date, as well as have some sort of ownership in the company. Really what we're looking for here is just to find some interesting innovative companies, hopefully before anybody else is seeing them or just as they're starting to create that awareness and exposure at a larger level. We want the South By Southwest Accelerator to help them with their company, to get that exposure, and to help them get to that next place.
Eric Kavanagh: That's really cool. Why don't you talk about what got you into this business? I know that you're a big event producer and events are very exciting. They're also a bit nerve-wracking at times of course, because you lead up to the event and then it looks like a blur, and then it goes on. Before we launched this conversation here, you and I were talking. You made some really interesting points about how to know if an event is working and what you look for as you're planning the event and as you're doing the event. Maybe tell us what's the magic behind the event production side of the Accelerator program?
Chris Valentine: Myself, I've been doing events for over 20 years and have been doing technology and startup-related events for the last seven to ten, and work on really large-scale opportunities for these types of events. With that, when I started to work on technology events, I really just excited about the technology. I think it's one of the great things that I am able to do, and really it's to see the future of technology. I realized early on that especially over the last couple of years where technology pitch events are becoming more and more commonplace, how do you continue to be competitive in this space?
So I started to study ecosystems from around the world and started to really look at them, see what's happening, and see where the startups are coming from. We'll oftentimes have an advisory board. I realize on a US nationwide level, Cincinnati, Ohio is starting to rise to the top with regards to their startup ecosystem or Omaha, Nebraska. I would go to that market and find some influences in there and ask them, "Would you like to be on the advisory board?" with the intent that they'll help drive some of those who are in those communities to apply for the event and hopefully get involved.
I also took it to the next level and I started to do it on a global level. That's one of the things that in the last year or two years, it's something that I have really started to see, which is the globalization of the startup ecosystem. What I'm seeing more and more on a global level, you're having these startups; we're no longer just thinking of ourselves as a US-based company. We need to think of the global ecosystem, and it’s much smaller than it really seems. I started to study these ecosystems in places that would probably come to mind, like London would be an obvious choice, Moscow, Singapore.
But then there are things like places in Columbia; and Santiago, Chili; Buenos Aries, some places in Africa. These different pockets, some are obvious, some are not. I read an article yesterday about Wales and the UK having this ecosystem and I'm thinking, I would have never thought that. My mind goes, "okay, let me read about it." Of course I get excited about it and just love what I'm reading. Then there's also, who's in that community that can help me find these companies and help me better understand that community; as well as if they could help me find these companies? Why is that important?
I think for me, to your question of how do you make an event, but make it magic, is that we're constantly in this situation. We're looking for the next startups. We're always having to replenish the pipeline every year because it's changing. It's trickier than if you did just a regular tech conference, it would be a situation where you can go back to the same people year in and year out, and maybe change up some, but in the situation of startups, you're having to replenish the pipeline from scratch every year. One the things that I have to do is really focus on coming up with new, creative ways to find startups, to find ways on different levels.
It's using a strong advisory board. It's looking at these different types of markets and trying to find people in those communities. Then the other part is because I have the vast experience and I also have a top event manager who has been working with me for the last five years and she has 25-plus years of experience. From an event logistical standpoint, we're thinking about the user experience. How do we create an event? I go to a lot of other events, so I'm aware of what other people are doing. I think I've traveled this year to probably about 15-20 cities.
I've gone to probably about 10-15 different events, other pitch events, other types of conferences. I go to those events to look and see what they're doing and what can we do to better what we're doing, to make ourselves more compelling? The way that I was trying to think of this from an attendee's perspective is when we're asking somebody to attend something that I'm producing, they're making a commitment with regards to time and financial resources, so can I create an opportunity to have a positive experience when they attend these events? I'm always thinking about that.
It's a question of the quality event. I feel pretty comfortable we'll produce a quality event because we've got all this vast experience, plus making sure that we get the right startups and then getting them on stage, which is always the trick. I think if you ask anybody who is a peer to what I'm doing, they're probably having the same struggles and challenges. We're not supposed to say challenges. Stay positive! I think the ones that are really creative and continue to find ways to do this, those events will sustain themselves through time.
Eric Kavanagh: I think you made some really, really good points about the importance of an ecosystem here too. You guys of course have been doing this for a while and you have all these fantastic past judges and emcees who have worked with the South By Southwest Accelerator, and that's a great sign because these are the venture companies that will step up to the plate, throw some money at some of these organizations, because really in any kind of startup situation, you need to have obviously a good idea. You need to have good staff. Then you need enough firepower to get into orbit.
That's the key and that's why you need so much investment to get some of these ideas off the ground, because you have to sustain the vision that you have, but then you need to be able to get out there and get above the noise level and help people understand why your product or service is special. That's the kind of thing that this whole organization can really foster and help launch, right?
Chris Valentine: Yes. One of the things that I'm always trying to do is to create value for the different people involved, not just from an attendee's perspective, which is what we just talked about, but also from the judges’ because this is a live pitch event, so companies are pitching to the judges who are oftentimes VCs or Angel investors or different types of influencers, as well as from the companies who are presenting. If you can create that value, I think it's one of those things where over time, you continue to bring back a stronger and larger and larger audience because it feeds off year in year out.
It feeds off of the excitement that people know about the event and know you're producing a quality event, but you're also getting the highest level. When we talk about some of these people, when we're talking about with judges, we've had Tim Draper of DFJ. We've had John Sculley, former CEO of Apple and he was the CEO at Pepsi. He did the Pepsi Challenge, for anyone who’s old enough to remember that.
Eric Kavanagh: I'm afraid to admit.
Chris Valentine: I am afraid to as well, to admit that, but Tim O'Reily, Paul Graham, Guy Kawasaki; you know Bob Metcalf, the co-founder of the Ethernet; we're talking about some of the highest — those are the 0001% in technology — the highest level. If you were a startup and you have an opportunity to be able to sit there and be able to talk to them about this? We work with all these different firms. We'll have a VC from Kleiner Perkins or Sequoia, First Round Capital, Union Square, Morganthaler…
You're going, "who is this person?" He created Gmail. He was the former CTO of Zappos, that type of thing. Their resumes are staggering when you start to think about this. If you're from a startup perspective, you're getting access to the highest level. Yeah, you might be able to schedule a meeting with some of these people and it might just be a quick one-off, but if you're lucky and you are successful and you're able to make it to the finals on site, you have a chance of meeting potentially, and we do three judges on day one, three judges on day two, these are different people, plus we do a couple of emcees.
There's potentially up to ten people that they would meet over two days. There's a value there. Then for the venture capitalists or the people who are coming as the judges, the opportunity there is to continue to see high-quality companies. I never undervalue the fact that this is a part of the bigger South By Southwest Interactive, so there are people who come who get involved who go to lots of pitch events, but they're also there for the idea that they're coming to the bigger conference. Knowing that, we still need to create value, so I've got to be able to put some great startups on stage for them to say, "Yeah, I'm willing to come to Austin. I'll do all that."
It's not an easy event almost to attend because of the size and the volume and everything that's going on, the energy, which is incredible and you probably won't experience it at most any other event, maybe a few other big, big shows. It's just this interesting thing that I work with. I think the key is offering value to attendees, judges, emcees and the finalists. I think if you're able to do that, I think it's a positive win for everyone involved.
Eric Kavanagh: It all comes together. That's really good stuff. Let's talk about the different categories because of course there are lots of different kinds of technologies that can get involved here, enterprise and smart data technologies, entertainment and content technologies, digital health. That's a huge space these days. I have to think there are a lot of people who are getting into that; social technologies, wearable, and innovative world technologies. You really do a lot of research with your advisory board and you go to these events and it's really the result of all that research and all that investigation that results in these kinds of categories, right?
Chris Valentine: Yeah. We traditionally launch the categories when the site launches, which is usually early August, the first week of August. During the first few months from the event, which happens in mid-March to August, I work with some key advisors. We start to look at what we're seeing in the technology ecosystem. Because we only have space for six categories, every year, we have to find ways. I wish I could do more categories, but there's some limitations. What happens is, and one of the great advantages of working with South By Southwest is through their network, we might start to see trends.
All of a sudden you'll see, a few years ago, I had somebody from South By Southwest approach me and say, "Are you guys doing anything on food tech?" I'm like, "It's a sub-category within our innovative world technology category." "Have you thought about creating its own category?" I'm like, from the research that I've done, and I spend a lot of time every year looking, I actually looked at it just yesterday; I look at about 80 new sources every day in the morning from around the globe, and all startup focus technology type of thing.
My comment to that person was, is, "Yes, I'm aware of what's happening in food tech." It's good to know that you're starting to see that reflected in the research process as you're reviewing that. I think that it's a strong subset within a larger category. I don't think it can be its own category. What I determine is when you're looking at these categories, number one is, where is the industry going with regards to technology? What categories are the strongest? We think we can get enough quality companies that are game changers that influence the ecosystem.
When I was thinking about food tech, I was like, I'm probably only going to get about maybe 10 to 15 companies to apply. I can probably pull out companies, but I'm not going to have a good showing, whereas a category like wearable, I felt like I'll get probably as a minimum 50 to 100. I know I can pull a good eight companies, which would be the companies that showcase on site for that category, so we'll have those great eight companies and be able to get a good strong showing, and all eight companies will be strong as opposed to maybe two or three and then the rest weak.
Again, I have to always think I'm producing a show. It's an event, but it's still a show. I have to think about the quality and what do people want to see? If I'm able to show one or two good companies, but then the rest are not at the level that they should be, and people that are in the audience are the highest level of tech influencers — they're going to know really quickly. You can't mask these things, especially in a live pitch event. You can't really mask the weak companies, so they would quickly find out.
I think we might be able to get away with it one year, maybe two, but after, we've been doing this for seven years, and the reason that the numbers continue to increase with regards to people attending the conference on site with regards to the Accelerator event is because I think year in year out people know when I walk into that room, I'm going to see strong companies. The six categories are reflective. Every year we look at the six categories and we say, "What has changed?" Do we want to completely get rid of a category completely? I'm notorious. If I don't think something is going in the right direction, I'm quick to swipe.
It's not working. What do we do to fix it? Or what we'll do is we'll change up some things. A few years ago, we had a news technology category. It was strong for about one or two years. I thought the third year got a little bit weak, so we quickly made something into entertainment and content technology. We pulled that into almost like a sub-category of the bigger entertainment category. We gave it equal billing with a title. I think we can still get some strong companies, but I didn't think we could get a good eight from that individual category. It's this weird challenge where we only have so much space.
We're still having eight companies in each category pitching on day one. Most tech conferences don't have that many. If they're doing startups, they're not dealing with that number. Most of these types of things, you'll probably see 10 to 20. Like most of the things that happen with South By Southwest Interactive, it's always at a very large, grand scale. I'm trying to work within those parameters, but it's always about finding the best and then trying to have as many as you can possibly get.
Eric Kavanagh: That's great stuff. It's got to be very exciting to work with startups and then the whole startup culture. I'm guessing that as you see some of these past winners succeed, and there's some really powerful numbers here — of the 257 companies who have participated, 50% have received funding. That's huge. That's a really, really big deal, and that's I think a testament to the process that you're talking about. I'm guessing that sometimes makes you feel pretty good to think that some of these companies really do very, very well. A lot of them have been acquired by even bigger companies and that's cool stuff, right?
Chris Valentine: Yeah. We just finalized this research about two weeks ago with the numbers. The numbers you were referencing are from 2009 to 2014. We had 257 companies participate; 50% of those have received funding. I want to be careful how I say this. We are not a funder. We are just a platform to the pitch event. We're a live pitch event where companies can come and they can be showcased, but I feel like there's a reason why I think we're getting those types of numbers. The numbers, to your point, $1.78 billion, 12% of those companies have been acquired.
What that tells me is a couple of things. I think number one, it tells me that we're choosing the right companies, that we have the right advisory board, that the systems and processes that we've created are doing what they need to do. I think that by doing this long enough, I think by having the right people involved, we just know when you see a right company. I remember last year looking at one company and just going, "This one's going to win." Sometimes you just know it after reading the application. I called somebody who I could tell because it was in confidence and say, "I think I found the winner," and they were looking at some of the applications.
He was like, "Don't tell me. Let me guess." He called me later that next week when they had finished their part of the reviewing and they go: "I think I know who it is. Is it…?" And I was like, "Yeah, that's the one." It was like, yeah: sometimes you just know. Sometimes you don't know because they get on stage and that company could have done really well in the pre-stuff and then they get on stage. We even do coaching of the finalists before they actually get on stage, but they could have done well in every part, and they get on stage and have been so nervous where they're not able to articulate their message at that level. We try to help them and coach them to be prepared for that, but sometimes they're a stakeholder and sometimes we're dealing with younger CEOs who don't have a lot of experience with regards to presenting in front of a large audience, again, at that high level and the people who are sitting in those judges’ and emcees’ chairs.
The research, to me, is really exciting. I love the fact that when you're talking about 12% have been acquired, and you're talking about companies like Google, Facebook, Apple, Live Nation, to name a few. Those are all really powerful names. Then the companies, which I think is one area where we need to do at South By Southwest Accelerator better is to sell our story with regards to the companies who have been involved. I'm not sure people realize that Siri was involved, but they were involved in the competition well before Apple ever acquired them. It's one of these things. That's an interesting story that we should continue to try to sell to a large audience, but we've also worked with groups like Hipmunk, Foodspotting and then Tango. Tango is looking at about 250 million dollars.
Wildfire was acquired by Google for 350 million. I think what happens is a series crosses over when most people know about it. If I was go to my mom who is not tech friendly or go to somebody who is not tech friendly — I love my mom, but I know her limitations — and say, "Do you know who Siri is?" She'd go, "That's a thing on my phone." But if I said Tango or Wildfire, they'd have no idea who that is. Some of these names aren't as big, they don't know how to cross that consciousness of the masses, but I think they're doing some pretty incredible things.
I think that's why you see the 1.78 billion dollars. Again, what that tells me is that we have the right advisory board members. They're finding the right companies. We've got the right people who are helping us along the way, coaching of these companies, so we're helping them get to a certain level so they can present themselves well. Then we're creating that platform to be in front of the right judges and emcees and if it makes sense, to offer some sort of funding and opportunities along the way.
Eric Kavanagh: Yeah, that's great. I can tell you that I've been involved with events for many years now and I've been very, very impressed by your processes. You guys have obviously thought all this stuff through. You manage it very, very well and that's huge because it's very fair to everybody involved and I think that makes a big difference because people who get involved know what to expect and they know that they're going to get a professional kind of operation.
I guess maybe I'd close with this question because you've already talked about this and I think one of the more valuable services you provide is this whole nurturing process and helping people understand what they should do, how they should approach this situation, how they should make the most use out of this opportunity. So maybe if you could just close with some advice on the startups out there. What are some key things they need to keep in mind as they engage this kind of process to better their chances?
Chris Valentine: I want to go back to one other thought with what you said and with regards to the event being done officially. One of the things that I've learned, and I hope that people can hear this, is that I work with a lot of people and I think last year, and I'm not talking about people that attend, but people who are involved. We had over 317 volunteers. That means advisory board, judges, emcees, coaches with regards to what we're doing. One of the things I think has helped have people be involved in what we're doing for long periods of time and year and year, and I am quick to push people hard and to have a high expectation of people, but one of the things that we try to do is we set the expectation up front, so there's a lot of clear communication.
We want you to get involved. Here's the things that we need for you to do. We have a defined timeline. We tell you exactly what you will be doing and won't be doing along the way. Then there's always e-mail followups on that type of communication. The expectations are set early. Then along the way, there's this communication. It's like, we've got this deadline coming up. We don't just tell you once. We'll communicate that probably three times. We'll tell you that when we first spread the news to somebody, like an advisory board member. We'll give them a two-week out notice and then we'll give them the day-before reminder.
We know that’s important to the people that I'm dealing with. This is why I want to work with them, because they are at the highest level. They are very successful and they know these startup ecosystems, in particular the parts that I need them to know about. I get to work with what I like to call the 1%, the people at the highest level, but to work with them, you have to be understanding and respectful of their time. The more organized, the more efficient you are with regards to what you're doing, number one, they'll be appreciative of it.
Second, they'll also be in a situation where they'll want to continue to work with you year in and year out. We're looking at a very high ongoing relationship with a lot of the people we work with, from the judges, from the emcees, from the advisory boards, from the coaches, because they know that they have an expectation they'll be treated fairly, they'll be treated respectfully. They'll also be treated at a level where their time is respected and valued. I don't always see that sometimes when I'm asked to volunteer for other opportunities, and it's one of the things that frustrates me the most. That's just a side point.
I think when you're talking about with regards to your question about how can we help startups and what can we do? I think when we're looking for startups, for me oftentimes I'm always looking for this and before our interview we talked a little bit about this. I think it's the same thing. I want to find a startup that I get excited about. It's the same thing when you are talking about a product. You hope that you get excited about that. For me, it's really just about that, and it's so hard to define what that is, but I know that there's some things.
Sometimes it's the team. Sometimes it's the innovation of what they're doing. Sometimes it's just something that is so simple. You look at it and you're going, like, that's so brilliant. Why hadn't somebody thought of that before? They're fixing a problem. Then sometimes, there's always different types of tangibles that you look for. Those are the things that we're oftentimes looking for with companies. Again, I'm always looking for who is going to be changing the startup ecosystem and making the world a better place? That's why a lot of times, I'll get excited about health or wearable companies, in particular health because sometimes I'm focused on that for myself.
There was a company a few years ago that basically focused on being able to detect Alzheimer's years before. They ended up winning the category. I have to tell you, I was so happy they were involved. To me, that's making technology for the better and I'm not minimizing this, but it's better than another dating app where you're just starting how to connect with somebody, which I think is important, but it's not at the same level of, now we're changing the way that people live a better quality lifestyle. They can make decisions based on the fact that they know about the fact that they have this or they don't have this.
I think those are some of the things. Then once we start working with the companies, we do a lot of coaching with them. I want on-stage preparation — this is a show. During the event we want the companies to be at their highest levels, so we actually work with them. We do three to five pre-event conference calls where we actually coach them on their presentation. The day before the event, we actually do something where we do a dry-run tech rehearsal. That's another big thing.
Those are the big types of pushes that we're doing and again for us, the key is just trying to get the right companies involved and then finding a way to make sure that they're able to be showcased. If you can help, they ultimately help the bigger event. I think they're appreciative of that type of support along the way.
Eric Kavanagh: That's fantastic. Folks, we've been talking to Chris Valentine. The deadline is November 7th, 2014 to get those applications in. Just do a Google search for South By Southwest Accelerator. It's under the interactive components, so sxsw.com/interactive/accelerator. Chris Valentine, thank you so much for your time.
Chris Valentine: Thank you so much. I really, really appreciate the opportunity. It's been good to see you again.