How likely is the live events industry to be disrupted?
The topic of industry disruption- “A process whereby a smaller company with fewer resources is able to successfully challenge established incumbent business” is the way that this Harvard Business Review article describes how industry disruption is affecting most industries.
I think that the live events industry, including trade shows, conferences, corporate events, festivals, sports, and music is a massive industry impacted by many different disruptive forces in each specific live event vertical segment.
I shared my thoughts on corporate innovation and corporate venture capital and why any big company must have an active strategy to “disrupt themselves before someone else will” and I also work on a regular basis with live events organizers and event tech companies who are eager to try new ways to improve their customer experience and return on investments in many different live events categories. I’m so excited on this topic that I also co-wrote with Jay Weintraub, the Face of Digital and I present and participate in many industry forums debating on this topic.
All those thoughts, examples and use cases analyzed as part of our book research are clear a strong validation on the fact that the live events industry is ready for disruption but honestly, we are still in the very early days, and nobody knows when, how and how dramatic that disruption could be.
Each live events category is different, but there are obvious similar problems and opportunities in areas like customer engagement/fan experience or measuring and maximizing return on investment that are common to every single live event category.
Now, the fundamental question that I keep thinking and debating with event owners, marketers, brands and investors is “how can we capitalize lessons learned from other industries and apply those learnings to the live events industry?” or, are there any shortcuts to be applied or our industry is so different that it will need to be unique in terms of disruption?
I personally think that the answers to these questions are not “black or white type of answers.” I’m convinced that industries like retail or media changed, are changing and will continue to change so dramatically that we can save tons of time, resources, and money learning from them and I continue to benefit from these learnings.
Talking with the CEO of a massive event organizing company this year he told me that he was excited to continue to see double-digit growth (top line and EBITDA) on his business and his concerns on industry disruption were still there but without a “sense of urgency” as you can feel in other industries like finance, retail and of course media where we see dramatic disruption affecting growth and profits like never before. This could be good or bad for many event organizers. It’s true that many events continue to grow on a healthy double digits trajectory and because of this growth many events organizers continue to think that “life is beautiful and nothing bad could happen” but we also see many large and established events no longer growing or reducing their size and we saw many successful events going out of business after three or four years without adding concrete value to their customers.
Every live event industry conference is covering topics like “Digital disruption” “Innovation” and “Transformation” as part of the agenda and many different industry leaders are sharing their own views and thoughts on how our industry is changing and will continue to change mostly because of technology.
After participating in many interesting debates, panels and presentations on these conferences I see three key elements that now are very clear to me and will probably define some potential trends for the next five or ten years regarding the “live events industry disruption.”
1. A critical mass of talented entrepreneurs building event tech companies.
Follow me on this simple mathematical analysis. Based on the latest Tracxn event management report, there are 3,209 event tech companies and 1,050 of these companies are already funded by professional investors (early stage angels, Venture Capital or Private Equity). Let’s assume that we apply the classic conventional wisdom that says that 90% of startups fail (some investors disagree on this rule but for this particular analysis, let’s keep it simple) and in a couple of years we start seeing around 10% of these companies moving into the right direction and creating new digital scalable solutions for our industry. But let’s be pessimistic. Let’s think that only 5% of these companies will succeed. Even with this 5% and assuming that no new startups will be joining the industry which is almost impossible, we will experience more than 150 successful companies innovating in our space. We just need a small group of these 150 companies being very successful to start seeing some real disruption. It only took one Airbnb, Uber or Netflix to change their industries dramatically. Many of the institutional investors that backed some of the most successful tech startups during the last decades are starting to fund and support event tech startups, and I know enough smart entrepreneurs leading event tech startups in order to be optimistic about the fact that we will see some innovation and disruption critical mass during the next decade.
2. Cultural change and new engagement attitude on event organizers, exhibitors, and visitors adopting tech as part of the live event experience. We all know that events industry is slow to engage innovation. Many event organizers are slow (and many times lazy) engaging and utilizing new technologies. But their customers (exhibitors and visitors) are moving faster than them in many of these technologies and are starting to demand similar adoption velocity for the events industry. This key strategic pressure from customers is forcing organizers to invest more time and resources understanding which specific solutions they will need to execute on their events to provide the appropriate return of investments for their customers. This pressure will generate a bigger appetite and demand for event tech startups products and technologies.
3. The domino or snowball effect. The events industry moves really fast if something works well or it’s validated. Let me share a small example of a company where I invested in the early days, and I know well enough to share my own experience. Feathr is a digital marketing platform for event organizers, helping event owners to generate better and more efficient customer engagement. Only a couple of years ago, during the early days of Feathr Reed Exhibitions, Clarion and Access Intelligence (leading event organizers) tested this technology on some of their shows and worked very well. These organizers were happy to expand and leverage this technology and Feathr is now doing more than 650 annual trade shows and conferences engaging with millions of events visitors globally. There are other similar examples where the “snowball effect” is generating exponential growth and adoption in different technologies for each live event segment and it’s fascinating to see how fast adoption happens when technology adds value and generates efficiencies.
I think that if we combine these three trends together, I would be surprised if the live events industry is not disrupted during the next decade.
Is disruption a bad thing or a risk? It could be for those companies who are not investing in the right management team, culture and tools to anticipate disruption but for those companies who are brave enough to invest in innovation and keep rethinking and reinventing their events testing and using many of these digital tools, the future growth opportunity will be massive since they will be able to capitalize a fantastic digital audience and engagement that will allow them to improve their customers experience and return on investment and also their own profits margins as event owners.
Let me be clear on one final thing that I’m also convinced. Disruption is not about technology. It’s about culture. Those companies who are able to keep their culture flexible, open and entrepreneurial in order to engage with innovation regularly are going to be ready to capitalize any future disruption as an opportunity and not as a challenge.
I can’t wait to see the initial disruptors in our industry and how these companies will change the live events industry forever.
Originally published at www.marcogiberti.com
Originally published at Marco Giberti.