Startup diary: Building trust - with deeds, not words - is the greatest investment you can make
Running your own meetup events is an excellent way to drive sales and business leads for a new startup, writes the voxgig founder
When I began this startup diary, I explained that it was a place to make and explain decisions, and follow up on the consequences of those decisions. A good example is the decision to go fully remote-working. This strategy is a response to our location in Waterford, and neatly solves the difficulty of hiring with a small local population.
However, one consequence that I did not anticipate was the significant extra workload on me as founder to set things up to run a fully-remote company. I had only run a partially-remote company before, and one where the entire management team, and key administrative staff, were on-site. The most precious resource in a startup is time, so this had an impact on our execution speed, especially in 2017. On the whole, the decision was worth it, as we can hire anyone anywhere in the world.
But we don't get to cash that cheque until real growth starts. And you could argue that we have slowed down that growth by preparing for scaling too soon. Final verdict: there is no significant win in going remote if you are based in a large population centre but if you based remotely, then work remotely.
Another decision that we made was to run monthly meetup events. We run the Dublin Microservices Meetup, and are just about to launch the Dublin EventProfs meetup, which will be for 'event professionals' - anybody working in the events industry in Dublin.
Running meetups is not cheap, although we do get sponsorship. It's more expensive for us as we have to run them in Dublin. The total cost per event is about €1,500, including employee time and travel.
From June 7 (the date of the first EventProfs meetup), the monthly meetup cost will be €3,000. This money comes from the marketing budget, because that's the obvious place for it.
Why do we run meetups? There are three reasons, the last of which is a slow burner, but the most valuable. First, meetups are a basic element of one of our chosen sales channels - events. There are many ways to sell and many 'channels' to find customers. You can advertise, you can cold call, you can network, and so on.
Events are a wonderful sales channel, and you'll find that, on average, about a quarter of marketing budget in the business-to-business market (that's us - we sell to other businesses) goes on events. They are incredibly effective when it comes to generating sales leads, and for recruiting. Most companies just attend, exhibit, or sponsor events, but I'd encourage you to go to the next level - run your own, it's twice as effective.
The second reason, for us, is to 'eat your own dog food'. This is Silicon Valley slang for the idea that you can't build a great product unless you are your own best customers. How can we build great event management software, great services for speakers, and great tools for sponsors and exhibitors, if we aren't doing all those things ourselves?
Our event management team is building a lot of deep understanding of our customers' needs. And because they are not directly inside the development process, the event managers are not contaminated by the assumptions of the software developers. It's one thing to disappoint customers, quite another to disappoint your colleagues. So running events keeps our product development honest.
On that basis, €3,000 a month is an absolute bargain - you'd pay far more for traditional market insight work such as surveys and focus groups. This was the original reason I decided to invest time, money and effort in running events. The verdict on this decision is nuanced. I can certainly recommend this strategy if you are recently funded or in growth stage, as you will have the cash flow to support it. You can run meetups far more cheaply by doing everything yourself (manual labour!) and putting a lot of effort into getting sponsorship.
That's a time cost that may not make sense for an early stage startup where the founding team needs to get an MVP out the door fast. The other aspect for us is that running events is so directly correlated with what we are that it is a bit of a no-brainer. We also operate in the technology and internet space, which is very event-friendly. The general takeaway is that you should find the right type of 'dog food' for your startup.
I cannot yet quantify the impact for us - that would require formally capturing the insights that have arisen, connecting them to specific features and operational approaches, and connecting those to customer outcomes. We will do that in time, but for now it is a gut-based decision. Decision-making in a startup is very much about working with little or no data.
The third reason we run meetups is something that has emerged over time as my thinking on our strategy has developed. This one is little more philosophical. Why do people buy from you? I like to skim through business books (they are seldom worth reading in full) to pull out the key insights that each offers. Many books about selling talk about the idea that "people buy from people".
Even though large companies like to make out that they have well-designed procurement processes, and take time to properly analyse purchasing decisions, this is the case in my experience. Clearly selling to a small business involves convincing the owner or partners, at a visceral level, that you can be trusted. They know that can pick up the phone and pester you if things go wrong. As an aside, always pick up the phone when your customer is angry. You'll learn more from a 10-minute rant than any customer survey. And you'll make them feel better and probably keep them as a customer. Some of my most loyal customers have given me some very severe (and deserved!) earfuls.
While selling to a large company is different (I'd never be done writing articles about that…), one important factor remains that same: people. There are just more of them, and you have to get some of them to sell for you. Most of the time, you never get to sell directly to the executive team, you rely on a mid-level manager to do your selling for you. That's tough. Selling to large companies can take many months and even years (this long sales-cycle is why we're positioning ourselves as a light-touch Software-as-a-Service vendor - just enter your corporate credit card).
To make sales to real people they need to trust you. People buy from people they trust. How do you build trust? The sleazy cliché of the used-car salesmen comes from his tendency to build trust using short-lived tricks and half-truths. Such 'trust' evaporates on the way home when the exhaust falls off your 'new' car.
Real trust in any relationship cannot be built with words, it can only be built with deeds. Running meetups benefits voxgig, but it benefits the event professionals community more. It is not cheap. We are clearly investing time and money into something that is greater than ourselves. It is a demonstration of our commitment to the industry as a whole, and that we are here to stay. This is our open intention.
I now think that demonstrating that we can be trusted members of our industry is far more valuable in the long run than any of the other reasons for running meetups. Sometimes you can initially make a decision for other reasons, but come to a deeper understanding over time, which will help you make higher-quality decisions in future. You only reach this deeper understanding if you take time to reflect on your business. Some of the best business advice I have read in those business books is the advice to just take a regular walk outside the office and try to think about the big picture. This is really hard to do when you have so many fires to put out, and so many tasks to complete, but it is something you must find time for - it will pay the biggest dividends in your business.
(Newsletter: another good week. Subscribers: 1,521, open rate: 18pc. There's few new tactics on the way to accelerate these numbers - stay tuned.)