Founders: Do not waste money on TechCrunch Disrupt's Startup Alley
Jason Calacanis
I invest in 100 new startups a year... get a meeting with my team at launch.co/apply, or learn how to start a company by joining founder.university (our 12-week course). watch thisweekinstartups.com if you love startups
Last month we had 15,000 registered attendees at the LAUNCH Festival and we gave 250 startups free demo pit tables and five tickets each based on merit. The way we did this is, candidly, we don’t make a profit off our event.
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Seventy-five percent of the people in the DEMO PIT reported they met an investor (the other 25% certainly did meet an investor, but those investors didn’t uncloak -- many, investors, including myself, don’t uncloak at events).
Have you done TechCrunch Disrupt Startup Alley? Please take this SURVEY and tell us how it went: https://launchevents.typeform.com/to/RcV2gA
TechCrunch Disrupt has taken my DEMO PIT model -- which I came up with 9 years ago -- and corrupted it. They are giving their demo pit tables to founders for only one day and they are charging founders $2,000 for two tickets.
If the Startup Alley is open all day, you’re going to pay $300-400 an hour to stand at your table. Not to mention you are going to have to fly to New York City with three people (what it takes to properly have a table), and you’re going to have to put yourself up for four days.
Four thousand dollars (with travel, at least) to do the Startup Alley is a huge waste of resources for your startup. Just think about what else your startup could do with $4,000. If your customer acquisition cost is $5 or $10, you’re going to get a lot more attention from angel investors by emailing them a chart that shows you’ve now got 200 or 400 new customers -- trust me, this I know.
Also, the Startup Alley is, largely, the startups that CAN’T RAISE MONEY and who are SO DESPERATE that they have to PAY FOR EXPOSURE.
All of us angel investors understand that the Startup Alley is for the companies that are desperate -- and that’s not a judgement. I’ve been desperate myself to get attention many times.
However, you don’t want to put yourself in the middle of a bunch of people who are desperate because it’s a negative signal.
We select our 250 startups for LAUNCH Festival based on merit. It costs us around $250,000 to set up the space and furniture for these 250 startups. You know how we give these tables away for free? We get sponsors! TechCrunch can easily get sponsors, and they do, so what they are doing with the “Startup Alley†is sucking a massive amount of revenue from desperate startups -- it’s despicable.
Here is the math: if they have 250 tables sold a day and they sell them all for $2,000 they are making $1.5m off startups during their NYC event.
Don’t fall for it.
It’s a rip off, as is this dream that you’ll get pulled up on stage (which is an idea I came up with as well, for the record!). At LAUNCH Festival we bring 5 startups from the demo pit every day AND we put 150 of the 250 DEMO PIT startups on our AMA Stage. So, for free, we put 165 of the 250 DEMO PITs on one of the two stages.
Founders shouldn’t support conferences like Disrupt, which are designed to rip off founders. Don’t support them, it enables them to do more.
In fact, some group in New York City should rent a huge space and just divide the cost of that space with other founders on the same days as Disrupt New York next year -- that would be a very New York City thing to do to the Valley interlopers who are looking to take your money.
What you’ll find is it will be between free -- if you get sponsors -- and ~$100-200 to do it collectively.
Fight the power!
best @jason
Strategy and Innovation at Neo4j
8 å¹´There's a whole cottage industry built around pay to play "investor" events, agree it's far better use of cash to invest in building your business.
Exited founder, open to advising entrepreneurs and investment.
8 å¹´My start-up was one of the ones that attended Launch Festival. I found it to be a wonderful event! Gorgeous location too! We were not from the valley Bob Korzeniowski, MBA, CPA, PMP, we are Canadian, and they reached out to us because they found our product interesting. We mets lots of great people and are still working through all our leads. Thanks Jason Calacanis for such a kick-ass experience.
Well said by Jason. C. there are a lot of such events/ people who are banking on entrepreneurs dreams. Domenic -with a vast majority working remotely , all it takes is a team that believes in vision , does not matter where they are located , and they get the job done .. From what i heard and know ,silicon valley engineers tend to jump between jobs more frequently compared to their East coast counter parts , do you think that is good for the startup? Before you know you have a team , your team member found another startup to work on .....just my personal opinion. I would love to connect with you and talk next time when I am in Bay area.
Python Core Team (versions 1.6 to 2.x); Senior Leadership @Amazon; Xoogler Investment Syndicate
8 å¹´Bob, if I may, I'll try to provide some clarity on that point. While it is certainly true that talent exists outside of Silicon Valley, it is the desire of many senior-level engineers to work with their peers. That makes many of us migrate to the Valley, for better or worse. As far opportunity outside of Silicon Valley, I'll say without hesitation that I'd fund 100 Valley startups over 50 non-Valley startups, and probably make more money doing it. Aggregating pools of talent geographically lets us all operate on a higher level. If you make a trip out here, feel free to reach out and I'll buy you a coffee and discuss in person.