Startup, Get Down: How To Throw A Profitable SXSWi Party

While Austin’s SxSW has been over for a few months, one of our portfolio companies uncovered a very interesting way to throw a brand-name building, link-generating party and actually have it make money.  This is the story of how they did it; this post was originally written by Rachel Greenfield of SpareFoot (rachel [at] sparefoot [dot] com or @SpareFoot).

It’s already time to start planning your startup’s SXSW 2013 party. Really. Interactive is a big opportunity to put your name on the hip map in the tech world, and let your internal spirit of debauchery go public before the company does. SpareFoot felt ready to do it big in 2012 for the sakes of PR (read: SEO link building) and developer recruitment. We never expected to actually make money in the process. I’ll enlighten you on how to achieve this profitability by sharing our own experience.

We’re not event planners.
Our System Administrator, Andrew, was a party promotor for raves in the 90s. Our Marketing Analyst, me, was naturally responsible for winning marketing bang for the buck at SXSW. Andrew and I randomly share an appreciation for non-rave electronic music – hip-hop, breakbeat, dance hall, Baltimore club – and the skilled DJ work that brings it to life.

Spare Beats was born about five months premature of SXSW. We rode a choppy wave on our enthusiasm for the concept— a free eight-hour monster that would move from relaxed day party to evening rager. I literally had no idea what I was getting into, having no experience booking talent or planning and coordinating events. We brought in my friend Gerald, a professional all-of-the-above and local DJ, as unofficial consultant. Together the three of us fought the good fight against an impossibly tiny budget, chaotic to-do list, and each other.

We managed to: Choose a date, book a venue, secure six local DJs and two nationally known DJs, book flights and lodging for national talent, get dinner and drinks and ground transportation for national talent, bring on six sponsors to cover costs, deliver on service trades with sponsors, coordinate with advertising partners, order and distribute two runs of fliers and posters, order banners, set up a VIP list with drink tickets and wristbands, bring in a third-party sound system, order swag (T-shirts and mini SpareFoot tape measure keychains), blast email campaigns, process payments for everyone and everything, claim 42 PR mentions with links, 261 Twitter mentions, 46 Facebook mentions and 9,290 RSVPs.

…And that doesn’t cover the logistical nightmares. But the actual event went off pretty successfully. We exceeded our minimum bar sales amount set by the venue, earning 20% back on drink sales. In fact, our party set a record high on bar sales for the venue. The date we nailed was prime timing on the first Saturday of Interactive. We snagged the SpareBeats.com domain for our party  and redirected it to run through our main website for maximum SEO value. Jeffrey, our in-house designer/developer, created perfect visual branding and threw our website and promotional materials together on tight deadlines.

And we made money through sponsorships— not tons, but enough to come out above the budget. So we’re going to do it again next year, recycling the concept but executing an updated, streamlined approach that will return more profit and more media mentions and links over this year.

Where we messed up. 
Most painfully, Spare Beats stole Andrew and me from our core roles. We’re both still catching up after losing roughly 150 work hours to the event, and have a medium-length list of things we easily could have done differently. If only we had felt less like recently decapitated chickens running a race.

Basically—  we should have gotten started a full year in advance instead of five months out. We should have chosen a venue closer to the city center of downtown, because between the distance and the chilly rain that surprised us the morning-of, I think we lost a lot of potential attendees (it was still packed). Of course, a weather preparedness plan could have been in place to prevent our last-minute scramble for a roof-top tent. We lost revenue by providing unlimited drink wristbands to employees, their +1s, and a list of VIPs. Civilians were asking folks with wristbands to grab them drinks, and it’s hard to say “no.” Multiply that by all the wristbands we had out in the crowd, and you’ve got a serious bar tab.

Because none of the people involved in planning Spare Beats 2012 were actual event planners or designated as lead project manager, the effort was chaotic and lacked reliable structure. We felt too busy to set one up, as one thing came right up after the other. Thankfully, we’ve since hired our first formal office manager, Geni, who will handle event coordination moving forward. She’s already taking a front seat in organizing Spare Beats 2013.

Now do it yourself, only better.
Let’s talk about you, and how you’re going to pull this off like a champ the first time. The big takeaways:

1. Profit alert: Tap relationships with local businesses and tech companies to bring on sponsors. Develop different levels of packages based on trading services for party cash, and reach out to every connection anyone on your team has. Service trades can include branding and SEO favors like building links to sponsors in tandem with your own web marketing, and splashing sponsor logos on dedicated screens and banners at the event. Contract sponsors with a term requiring them to link back to the event from their own sites. Cast the net wide, but aim for a few big-ticket sponsors.

2. Designate an event planner who will project manage this from conception through execution. He or she should get started as early as possible, setting up a task list/calendar and communicating about who is responsible for what.

3. Consider hiring a consultant who does this stuff regularly. Ask around your favorite bar and club owners, even tap employees for connections they may have in the nightlife scene. Nail a contract with terms listing their specific responsibilities in advance, to determine a fair rate and avoid role confusion later.

4. Commit to keeping the event planning logistics on the project manager’s plate, and off your marketers’. Let marketers focus on reaching a wide scope of influential bloggers as far in advance as they can, applying a dedicated PR focus.

5. Get traffic by hosting the event page on your domain. Run the RSVP platform there instead of on a third-party like Facebook— bloggers covering your event will just link to wherever the RSVP capture lives. And if your party is free, add a hoop to jump through, like requiring people to “Like” your Facebook page upon RSVP.

6. Get other teams involved, particularly SEO— interns can add the event to user-curated directories and capture lower-influence guest blogging links.

7. Beyond the standard fliers and posters, get creative with your street team approach. We had a great experience with iWearYourShirt, scoring us extra social mentions. For 2013, we have a crazier, top secret plan in store.

8. Negotiate a low bar minimum and high return on drink sales with the venue, for a fun cash bonus after the party.

9. Put a maximum spend limit on your company bar tab, and distribute a set amount of drink tickets per VIP and employee. Keep your VIP list in alphabetical order by first name for the door guys’ sake. They’ll hand out the strips of drink tickets, which you should pre-stamp with your company logo to avoid foul play with generic tickets.

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