WHY STARTUPS ARE RETURNING TO IRL EVENTS/ACTIVITIES
Starting tomorrow, SF/LA Tech Week kicks off, and it will be one of the biggest tech conferences in the world. Across the cities, there are 1100+ events over the next 14 days with many 10,000s of people attending.
Our firm, a16z, has played a big role in organizing things, but the heavy lift is being done by hundreds of amazing organizers. These include gig guys like Open AI, HSBC, Fenwick, AWS, Google, Stripe, Atlassian, to scaled startups like Mercury, Deel, Eleven Labs, and hundreds of brand new startups and community members. Huge kudos to the a16z Tech Week team for making this happen.
But wow -- why is this happening? I can't help but wonder: Why has there been such an outpouring of interest and support to build the IRL communities within these startup hubs? Shouldn't we be in the era of fully digital everything all the time?
A few major reasons:
- the AI revolution is more B2B than B2C, and events are one of the best ways to sell into startups
- as social media and paid marketing saturates, IRL is cost effective and authentic. While IRL activities don't scale, they give quality over quantity
- there's an exchange of value in IRL, because attendees hand over contact info and you know they're highly qualified
- Many transactions, like VC funding, big partnerships, etc require the kind of relationships/trust that can only happen IRL
- after lockdown, people want to get together
AI is the big tech trend right now. Most new startups are incorporating AI as a major feature or core product offering. At this phase of the tech S-curve, these startups are often pure infrastructure or developer-led B2B products, so attracting other startups is very important. We're seeing some major AI applications, but they're mostly prosumer or vertical SaaS rather than broad consumer adoption.
Thus, there's a huge amount of energy around attracting other startups and businesses to use AI products/services. Customer acquisition costs for paying startups/small businesses are high (often >$2000 per customer), so capturing organic signups and building buzz in the startup community is cost-efficient. This is where IRL events come in. Hosting an office event, restaurant buyout, or mini-conference can bring hundreds of qualified customers to learn about your products. Tech Week calendars can drive thousands of attendees, letting you cherry-pick the most qualified. These leads could be worth millions in B2B sales pipeline.
The biggest criticism of IRL events and activities is that they don't scale. While that's true to an extent, Tech Week has helped address this issue in a couple of ways. First, by putting your events on the calendar, you can often get thousands of people applying to attend, achieving interesting scale - especially for B2B and prosumer products, as well as consumer beta launches - all for the cost of organizing an event. More importantly, it's about quality over quantity.
