Conference Ho 2 — Electric Boogalo (with a nod to @msuster)

Several years ago, Mark Suster wrote a post that I’ve often forward to founders to that I’ve invested in — http://www.bothsidesofthetable.com/2010/10/13/be-careful-not-to-become-a-conference-ho/

The tl:dr of the post was that, as a CEO, your time traveling and attending conferences had diminishing marginal returns and that your time was better spent in the office, showing leadership.

I wholeheartedly agree with this (even more now as a founder of my own startup) and have made a proactive effort to curtail any sort of travel unless necessary.

That said, I’ve been seeing a disturbing trend that is related to Mark’s post — founders of FAILING startups spending significant SPEAKING at conferences. (How do I know they’re failing? I’ve either invested in them or have been asked to invest them and have seen their metrics).

Why do founders do this?

I’ve been heavily influenced by Fred Wilson, who says that the principal role of the CEO is to set a company vision, make sure the company doesn’t run out of money and hires the appropriate talented people (http://avc.com/2010/08/what-a-ceo-does/). You could make a case that by showcasing their startups by speaking at these conferences, the founders are highlighting their businesses to potential investors and employees. Makes sense on paper. However, this only makes sense if the business is not FAILING.

Investors aren’t dumb. When they hear your story and dig in, they’ll see the metrics of the business and wonder why you’re speaking at a conference. Potential employees may hear your speech but if they’re talented and smart, they too will want to take a look inside the business before considering joining.

If your business is FAILING, what should you do?

1. Look inwards — Some hail mary to an outside investor isn’t going to work.
2. Push existing investors — Have an honest discussion with your existing investors about what is needed for a bridge round and hold them to it. If they’re uncomfortable expressing this, think about alternate sources of investment (more on this in a future post) or an asset sale.
3. Cut costs ruthlessly — If it isn’t absolutely critical, get rid of it.
4. Generate Revenue — Figure out what can be monetized (even if it’s consulting revenue) and then sell it.

On a corollary, I don’t mean to say that speaking at conferences are bad in of itself. Quite the contrary, there is a time where talking about what you’re doing makes sense. When something is working and you want to attract attention from investors, acquirers, and employees, conferences can be an awesome weapon.

First things first though — get things right inside your house before you spend meaningful time putting on airs publicly.