More than anything else, tradeshow attendees want to see new things, new technologies. They know what’s available to them right now; they want to know what’s next.
The numbers prove it. Three of the top four reasons people attend events are to learn about new products or services, the Center for Exhibition Industry Research reports in a recent study.
South by Southwest (SXSW), the annual music, film and tech festival in Austin, Texas, has made a conscious effort to play to that basic tenet by focusing on startups. The event has many conference and consumer elements, but a growing number of venture capitalists and a 300-plus-exhibitor tradeshow are major parts of it—there’s a definite buyer-seller component.
That startup culture had been gradually developing at the event, hitting a new high in 2007 when Twitter hit the mainstream in Austin. Social location service Foursquare debuted at SXSW two years later, ramping up the trend.
That same year, 2009, the SXSW Accelerator competition was launched. Now, more than 500 companies apply for admission to the two-day contest, with about 50 chosen to pitch their companies before a live panel of high-profile judges at the event.
“We needed to formalize all the startup activity that was happening,” says Hugh Forrest, director of SXSW Interactive, a segment of the larger event that hosts the Accelerator competition. “You create somewhat of a formal structure for ‘a thing’—whether that’s a VC pitch or gaming or whatever—and that structure helps create and populate what becomes an entire ecosystem.”
Accelerator didn’t create the startup ecosystem at SXSW, but it’s been one of the major factors adding to it over the past five years. There were around 100 VCs in 2008, Forrest says, while more than 750 showed up this year. SXSW Interactive launched its Startup Village in 2012 as a way to cater to the segment even further.
Why It Works
The benefits are clear for the contestants. Burdened by limited resources, startups get an affordable, efficient way to market themselves and meet contacts. Close to half of the previous finalists have received funding, with the contest generating more than $427 million in investments so far. Siri, the interactive voice command feature on several iOS products, was purchased by Apple six weeks after winning at Accelerator in 2010.
Anecdotal evidence also suggests it’s seen as an explicit value-add. As repeat presenters, tradeshow exhibitors, panel speakers or attendees, contestants are coming back. Accelerator starts a relationship with them; it’s a “conduit for new talent,” Forrest says.
It’s also a significant draw for the show in the short term. Apart from the rise in VCs, Chris Valentine, producer of Accelerator, says the program’s attendance was maxed out this year. The space will be restructured to fit more people in 2014.
Production quality is key to maintaining the popularity of the event, he adds. Organizers view the contest the same as they do an education session or panel—it’s content. Presenters are given mandatory coaching sessions in the months leading up to the show to ensure the quality is high.
“I want the companies to give the best presentation they can because it helps them with their objectives, be they marketing or financial, but as a producer, I also want to make sure they represent our event at the highest level,” he says. “We basically tell companies they have to do the coaching or we won’t allow them to be a part of the event. If we have three or four bad pitches, that’s a reflection on us.”
The judges—which have included well-known industry experts like Craig Newmark (Craigslist), Tim O’Reilly (O’Reilly Media) and Chris Hughes (Facebook), among others—also add an integrity and cache the startups couldn’t capture on their own.
“We’ve always wanted the event to be focused on novelty and the future,” Forrest says. “One of my favorite lines I’ve heard someone say about SXSW Interactive is: ‘It’s the place that I go to see what’s going to be hot in the next two years.’”