I’m sitting in the hotel before heading off to catch my flight back home. The past three days at WebSummit in Dublin have been very hard work. The initial heady delight at being selected as one of the few vetted companies to go through as an Alpha startup is very far away from the reality that you are one of 400+ startups competing for the attention of perhaps 100 investors in a sea of 40,000 attendees.
Consider the ‘meat market’ analogy:
In this example, the buyer is the investor – eager to get a good cut, something healthy and fit for the audience they are preparing the meal for. The startups are the ‘meat’ – a selection of beef, pork, chicken, veal and (oddly) a vegan alternative – has all been packed in the same foil wrapper with a note saying simply ‘approved meat’. WebSummit are the people who own the store and are wrapping the foil around each bit of meat as it comes in – it’s nice that they’re putting us together, but they’re making it hard work for everyone to meet the right buyer.
Expectation vs. reality
The whole process starts with an online application to be a startup at WebSummit, which then results in a 20 minute phone call with someone from the WebSummit team. In this call, you’re asked to explain a bit about your business, what your market is, where you are in terms of commercial readiness and so forth. It’s not detailed, but it’s broad in asking reasonable questions.
You are also told about how last years’ 40 companies have already raised over $1 Billion in investment and they highlight that it is the event where Uber raised their funding. If selected, as an Alpha startup, you get a 90% discount on the price! It’s a good pitch, unsurprisingly for a company that built around hearing pitches.
We finished the call with me fishing to find out whether MiFile was the sort of company that might go through. The person interviewing me laughed and said she couldn’t tell me that as she was one of the judges, but then conceded that she really liked what she had heard and would be happy to put us forward to the group. The whole group had to unanimously agree though, she said managing my expectation.
You can understand why we were so delighted a week later when we found out we had been selected! A link in the emails that followed also sent us to the page to register and pay for the event – almost €2,000 for three days, excluding hotels, flights, meals, etc. It wasn’t an easy decision, but the promise of having such great access to investors seemed too good not to go ahead.
Small print, scams and Dublin
Between hearing that we had been selected and actually arriving at the event, there were a few alarm bells.
The first was an odd post that appeared in my Facebook feed, where Paddy Cosgrove (Founder of WebSummit) was defending views that WebSummit was running a scam. I hadn’t seen the article or heard anything to suggest that WebSummit was a scam, so it was a problem to me only because WebSummit made it a problem.
Next we were sent details for the day that we were exhibiting. I don’t recall any part of the call saying that €2,000 bought you only one of the three days, but sure enough there it was in the follow up emails amongst all the other news they had shared. I complained to them, but then considered that this might be good as it would give us time to walk around and listen to some of the talks and arrange time to meet with the investors around the day at the booth. I said as much when someone from WebSummit called to tell me that the 1-day was clearly covered in the email.
As the week approached ahead of our flying out to Dublin, Paddy Cosgrove announced that he would be moving future events outside of Dublin – and shared a set of internal emails between himself and the local government. This seemed petty at best – we didn’t need to know any of these details – he could simply have made that decision internally. As an outsider it looked very much like a primadonna having a public temper tantrum and forgetting how not too long ago he had benefitted greatly by the Dublin community and government.
3 days in the meat grinder
We arrived a day ahead of the event and went over to see the venue. We were pleasantly surprised at the scale of the stage areas and our location to the main stage seemed good. The venue was split over three areas – a larger multi-hall, our area (the Village) and the Food Court. As the venue was still being set up we didn’t really feel like we could look around, but left with a very positive outlook for the coming three days.
Tuesday arrived and we got to the venue with plenty of time and sat ourselves in the front row to hear the opening welcome by Paddy followed by the opening talk on Robots. Neither was particularly good. Paddy spoke about font choices and his the jumper his wife knitted, whilst the discussion on robots was very general (yes, a car or washing machine is arguably a robot as it meets the definitions applied to robots) and didn’t really inspire or excite the audience.
We ducked out to look at venues. The first observation were that there were a lot more than 40 startups… and probably a lot more than 400 startups… These were grouped into three groups: Alphas (sub-$1M in investment), Betas ($1M – $3M) and Start ($3M+). The ratio looked to be about 50 Alphas to 5 Betas to 1 Start. Alphas had a 1 meter area, whislt the Start and Betas seemed to have a slightly larger pitching area and were able to present for all three days.
It was also clear that the event was focused on making money over anything else. To that end we were packed in 12 to a row, tightly spaced with little room for 4 people to man a 1 meter wide stand and still have room for people to walk through and look at the startups. As a startup in one of these rows it was obvious that anyone brave enough to walk into a row was going to be grabbed and pitched regardless of their interest in your area. For anyone not manning a stand (investors, media, attendees) it must have looked very intimidating.
WebSummit also included a number of speaking areas – from the large stages (main stage and Marketing) to about a dozen smaller venues (from seating about 50 people to others that might seat 150 people). Here there also seemed to have been little consideration for the bulk of the attendees – the startups – with the StartUp University area only allowing about 50 or so to sit, with a 40 minute queue of people waiting to try get in. At the same time, the Marketing hall (which seated ~500(?) was almost empty much of the time.
Our first day was spent taking much of this in, attending some talks, and trying to get to speakers that we thought would be interested in our solution. Luckily we had a seasoned sales guy in our team, who was happy enough to grab people and pitch them. This approach was uncomfortable for people like me with clear boundries, but it had some great results as we were getting great feedback and some real interest in what we were offering.
At the end of our first day I knew that this had been a bad investment in terms of time and money.
Day two was better – given that we had a clearer idea of what we were doing. We turned up early to set up our stand, put out our brochures and leaflets, and waited for the investors to queue up to talk to us.
Of course that’s not how it actually played out. Every group was identified by the chest/ breast high, custom designed lanyards. Instead of being reduced to a number, you were reduced to a group – Alphas, Betas and Start were largely just background noise (nice people, but unlikely to help move your business forward), Media might help but were usually flying from one place to another, Investors were shy types that flipped their passes so you couldn’t see that they were investors and then there was the Attendee group that were the wild card.
For every ‘Investor’ that came through a row, there were 100 startups (Alpha, Beta and Start). Each row of startups (12 teams of up to four people on each side, with enough room for someone to squeeze down the middle) could only really accommodate one or two people at time meaning that the chances of getting to decision makers was way too low.
Enter our sales guy, who grabbed a whole lot of hand outs and took to the floor to pitch people, reporting back occasionally to top up and give us feedback on the people he had met. In this way we met as many people on the stand as our sales guy met – with his results generally much higher in terms of high value discussions.
We finished up with about 20 good contacts, and the value of the event was improved but still questionable. Without a very active sales person it would have been less than half of that in terms of contacts.
The final day rolled around and we decided to take a chance by squatting on one of the few areas where someone hadn’t turned up. We had also decided we’d move to the other hall area to give us the best opportunity to meet people that didn’t go to both halls.
This was another ‘hard work’ day, with a combination of stand pitching and our roaming sales guy. At 3:30pm we weighed up whether we should stick with it, or call it a day. We decided to give it another hour and to press on. I don’t know if it was fate, but 20 minutes later an investor came round and we got talking. It was a great talk – he liked our solution, saw the scalability and appeal, but it didn’t fit what he was looking for. Given that I had nothing to lose I took the chance to ask him how I swap things around, so that instead of having 1 investor to 50 startups, I could be in the minority.
Shockingly he offered to take me up to the investor lounge and help me connect with some of the people there. Note: This is very unusual, and you should not base any plans at WebSummit on the assumption that this can/ will happen. He finished his tour of the startup floor and came back to get me.
My last 40 minutes of WebSummit were spent telling a couple of investors about MiFile – with great feedback and suggestions from one, and the other asking to meet up in London to discuss the opportunity further. Our talk was cut short by the security team chasing us out of the building as the venue was closing. This was actually a little bit amusing for me, as the investors were obviously not used to being shuffled out in the way that they were and looked really irritated about it.
Let me also share some of the insight I had from the investor that helped us get into the investor lounge.
The event was as difficult, if not more so for them. Ahead of the event they were sent a list of all the company names and the stand numbers – that’s it. Nothing useful to figure out whether the company had a product, service, was making revenue, or even if they were looking for investment.
One of the investors in the lounge told me that after the first morning he hadn’t left the lounge as it was just too difficult to quickly identify suitable relationships. Looking around there were also a fair number of investors sitting on their laptops, totally disengaged from what was happening below them (the lounge was on a raised area above the main startup floor).
I also overheard that the investors had their own ‘investor only’ evening events arranged whilst they were in Dublin – so you actually have almost no chance of bumping into them outside of the venue hours anyway. This goes directly against the whole ‘Uber happened in a pub’ pitch that is so well hyped by WebSummit’s PR teams.
It was one of the investors that summed up that WebSummit needs to be seen for what it is, a profit making business that uses investors and startups to do that… and it is very profitable.
Summary scorecard and thoughts
Out of a best possible score of 10…
- Chances of meeting interested investors: 1
- Ability to get feedback on your idea/ service: 6
- Ability to find channel partners: 1
- Ability to find technology development partners: 8
- Ability to network informally with investors: 0.5
- Chances that you can benefit from mass media exposure: 1
- Value for money as an Alpha: 2 (as a Beta: 3, as a Start: 4)
- For investors, chances of finding a great startup that fits your interest: 1
I will not attend another WebSummit without having secured meetings in advance of going – so really only as an interesting destination, rather than as the place that create the opportunities.
Are WebSummit selling a lie?
By the letter of the law, no. But they are pushing expectation well beyond reality, making it difficult for investors and startups, and are very obviously the real winners in the whole arrangement. Uber was an ongoing discussion, with many meetings taking place ahead of WebSummit and only happened to be the place where a happy founder and investor had a drink to formalise the talks.
Having seen the difference between startups I think the evaluation process is ‘relaxed’ at best, and borderline criminal at worst. More than a dozen startups were made up of early 20 year olds who had little more than an idea for their ‘pre-revenue’, ‘pre-prototype’, ‘pre-market plan’ startups. Taking €2,000 from these people and committing them to the other costs of flights, hotels and so forth, is highly questionable, and suggesting that you’ve evaluated them as a good startup opportunity for investors is horrible. They’re not ready.
Do the honest thing and tell them – everyone’s experience is improved as a result: investors have fewer and better qualified startups, so startups have a better chance of meeting those investors. But yes, then you get to fewer people crammed into a hall so I see what you’re doing there Paddy, it’s just good business.
Quick additional comments
- The Food Court seemed to be a huge disappointment for those selling food. The ‘voucher’ system meant that a €20 voucher got you a burger and a water, with no change. If the talk around the venue was right, only €7 went to the vendor, whilst WebSummit pocketed the other €13;
- The NightSummit was little more than a piss up for the same startup people to get together in the evening, and even then confusion reigned with some venues requiring pre-booking and cover payments on top of the attendance payment;
- Staying in the preferred hotels – at least for us – didn’t prove to be any advantage. Most nights the bar area was quiet and given that insight from the investors, it’s not a surprise that we couldn’t meet them there if they had their own ‘investor only’ events to attend;
- Around Dublin the people who live and work in the city – from people in bars to every taxi driver we spoke to – had nothing positive to say about Paddy and how he had taken from the city before he was someone, but was less willing to give back now that WebSummit had grown.
Our personal results from attending WebSummit were okay, mainly because we already have a working service, that already has subscribers, with a clear way to grow (with or without investment). Our thick skinned sales approach was our secret weapon and made all the difference in our securing about a dozen well qualified channels for investment or service delivery.
Go ahead and consider WebSummit, but I strongly suggest it is only a small part of your wider business/ investment planning.