Image Image Image Image Image Image Image Image Image

07 May

By

On freebies, externalized costs and carrying your own weight

May 7, 2014 | By |

There’s one slightly awkward dark side in the conference business: Over the last few weeks many, many people asked me for freebies of one sort or another. That’s not unusual or unexpected: Being involved in three conferences, there are always some who cannot afford or don’t want to spend the money for tickets.

But what genuinely surprised me is the profiles of the people who asked.

A trade or a freebie?

I expected mostly educational organizations or charities asking, which is perfectly fine because if at all possible, of course I want them to be able to participate. It’s not always possible at the desired scale, but usually there’s some wriggle room. We had some of that, and it lead to a large student presence at ThingsCon for example, and lots of students at UIKonf, too.

What I also often see is a proposal of a trade of some wort. Free access in exchange for XYZ. I hasten to add that the goes for conference organizers like me, too, who often ask speakers to speak for free in exchange for something or another like attention, travel, meetings, etc. This can all work out nicely if the chemistry is right.

But this time ’round, it wasn’t charities or schools or students asking for free access. It was predominantly for-profit companies, startups and even a surprisingly large number of venture capitalists. This struck me as deeply disturbing on many levels.

Externalizing costs for future profit

As an early stage startup, being bootstrapped is a fact of life. It’s both normal that people (like conference organizers) accept that and try to help out. It’s also clear that the so-called bootstrapping phase is a calculated move by the founders that serves the purpose of getting a maximum of product, traction, reach or attention before inviting investors, ie. it’s a conscious investment into future financial leverage (through exits or otherwise). In other words, bootstrapped startups asking for special treatment externalize their costs – in exchange, really, for largely nothing. It’s not like they’ll pay for other startups or educational institutions or the company behind a conference once the money comes rolling in. Still, that’s something we are all happy to help with, after all many of the founders are our friends, and it could be one of us one day. So that’s all good.

Can you trust a VC who wants a free ride?

But then there are the surprisingly large number of VCs and related companies who not only have the budget, but make it their business to invest this same budget, who ask us for free access to our conferences, in exchange for absolutely nothing at all. This, frankly, disgusts me personally – more importantly though, it makes me wonder: If a company doesn’t carry a minimum of their own weight by even just purchasing a ticket to a conference that’s commercially relevant for them – if, in other words, a company is too stingy to play a valuable role in the ecosystem but rather actively damage it – then how can we trust them not to screw over their investees?

The number of people who approached me saying their (investment or incubator or large tech) companies are “running lean”, or “think like a bootstrapped startup”, or “are there to help startups” and hence should get through the door “for free” was staggering.

“For free” is anything but.

Of course “for free” in this case isn’t free at all. Every person in the room incurs a significant cost. That very real cost usually is much higher than you’d expect from the outside. (Even after years of doing this, it surprises me.) No, “for free” means “free of charge for this particular attendee, at the cost of someone else”.

Depending on how we handle this kind of “free” on the organizers’ side, this could mean that we eat the costs (ie. take it out of our own pockets), or that we externalize it even further by passing on the costs to the other attendees. That latter of course would mean punishing the honest, fair ones who contribute their share.

Would you ask a stranger for money on the street?

There’s a very simple test I apply if in doubt. I try to imagine what it would feel like if I did the same to a stranger on the street. In this case, would I ask a stranger to just hand me over 300 Euros for no good reason whatsoever? Maybe because I don’t feel like I should be spending my own money?

That’s what asking for a “free” ticket is. It’s asking someone to pay for you. Which can be perfectly fine for all kinds of reasons, or it can be really, really totally off. It’s all about the context.

A thank you to all of you who contributes their share!

Of course, for every VC and startup who asks for a freebie, there are dozens who don’t, who contribute their share, and put their money where their mouth is. To those I say: <3. You’re the reason we keep doing this stuff.