EventVue, maker of event social networks and our first competitor, just announced that they are shutting down their business. They’ve posted a raw and honest post mortem. This is bad for the event industry. They blame themselves, but I blame venture capital.
Respect for innovation
EventVue built a good product. Whenever I talked to one of their customers, the customer seemed happy. The attendees seemed happy. The software looked good. In the world of event social networks, we launched first, but EventVue was so close behind us that their launch was clearly the result of an original idea. They were our competitor with the most innovations and I constantly wondered if they were going to make a huge discovery that dwarfed what we were working on.
An event social network is not a walled garden like Facebook, it has a limited time with attendees and so it needs to play nicely with the existing online personas of its users (Twitter, address books, big social network sites). EventVue got this and executed on it as well as anyone.
They didn’t stop innovating. They launched Discover, a product that let people lookup which of their friends were attending an event. Then they launched a twitter chat stream that let events offer a real time Twitter conversation that any attendee could comment on.
There’s something about the way the event industry buys software that breeds copycats. That’s why you can have 190 online registration systems that nobody can tell apart. In the nascent world of event social networks our model was an attendee directory paired with a personal schedule builder. EventVue, more than any other competitor, was constantly testing and refining their own original model and vision.
The event social network niche is too new to be losing innovators and innovators are too rare in this event industry for this not to be a blow.
Venture Capital is a competitive disadvantage
I think it’s fair to say that I’m anti-venture-capital. I think it’s a corrupting influence on products and companies. EventVue is just a mild example. They took a small amount of investment (reportedly $265k, although from their story it sounds like there was a double-down round). That’s peanuts, but it was enough to put them on that weird (to-me) funded company path.
Here’s how I would summarize the history of their company. They had a product that worked well and they had some paying customers. However, they doubted the product could be a big seller because it was a “nice-to-have” with a low price point in an industry with long sales cycles. So they switched directions to Discover, a product that seemed to have bigger upside potential because it was designed to be more tightly tied to the customer’s bottom line, but which did nothing to aid EventVue’s immediate bottom line. Then they tried another product. Then they ran out of money.
To me, that’s a history of a company moving backward. Every day gave them less traction and less money.
We took a different approach. We charged for our product from the beginning and we never once spent more money than we were making. So now we find ourselves in a much better situation: we’re still in business. It’s actually a lot rosier than just that: we have a growing base of repeat customers, we have no debt, and we have growing revenue.
The key advantage is that we never had a period where we weren’t a sustainable company. That means we have longevity. Bootstrappers, like us, live with a lot of constraints, but they also have the advantage of time.
My biggest issue with venture backed companies is the way they throw away valuable products and leave happy customers in the cold.
Ignore market size for a moment. The customers who use event social networks are very happy. The attendees who use them are even happier.
Like EventVue, I don’t think the event social network market is perfect. It’s currently small. No one has shown a path for rapid growth. It has integration challenges since the rest of the event software market is so fragmented. Sales cycles are long and price points are low.
But I also know that we have very happy customers and a sustainable business. And those happy customers are asking us to write software for other pain points. That doesn’t look like a dead end to me, it looks like a great starting point.
Every business is a bet, and the bet I placed was on compounding interest. Every year we will have more customers, more revenue, know more about the industries we serve, and be better and more talented business-folk/programmers/product-developers. This past year our revenue grew by 50% and we added one hugely productive person to the team. Carry that forward for ten years and the small four-person business we’re running right now feels like a pretty big opportunity.
For what it’s worth, and I know I’m in the minority, but I like working and one of my major goals for CrowdVine was to build a company that I would want to work for every day. I’m 31 years old. I don’t just carry that idea of compounding interest forward for ten years, I carry it forward for thirty-nine years.
What does the EventVue announcement mean to you? Can a venture backed software company succeed in the event space? Does having innovative companies matter? Let me know in the comments.