Out of all the great speakers that took part in W2O Group’s 2016, PreCommerce Summit, the fireside chat between Hugh Forrest, director of SXSW Interactive Festival and NewCo CEO John Battelle was one that I personally was most excited to hear about. Though it’s huge now, it didn’t start that way. Beginning a few years ago, it surpassed the music festival in terms of attendees—a trend that continues in 2015 and probably beyond.
Hearing the humble beginnings (Interactive started as the SXSW Multimedia festival in 1994… anyone rememeber CD-ROMs? Heh!) from Hugh’s perspective to what it’s grown into now (Hugh expects about 35,000 will attend Interactive this year) was worth the wait in my book. He covers a lot of the history and the evolution of the festival. And maybe next year we can expect a single ticket for all SXSW? And BTW, Mr. Robot fans can check out the Ferris wheel(!) on 4th and Congress.
If you want to watch John’s interview of Hugh, tune into the #SXW2O livestream at just about the 7 hour 40 minute mark.
Here’s an edited summary of the Q&A between John and Hugh.
Q: When was the first year of SXSW Interactive?
A: The Music part started in 1987. In 1994, we added SXSW Multimedia because we thought multimedia was the future back then. With CD-ROMs, there was a lot of potential there, wasn’t there? 🙂
Q: In 1994, how many people attended?
A: That first year, we combined it with the Film part, so it was SXSW Film and Multimedia. If you counted all the volunteers, we had about 1,000 attendees combined. We thought at the time it was a good first showing. After that, we split it into two separate events, one for Film and the other for Multimedia. In the startup world you have concept known as the Valley of Death. For startups that survive, it’s usually a period of about a year to 18 months. We had about a 10-year Valley of Death, where we were really struggling to find our voice, to find our market to understand what we were doing. The reason we survived during that 10 years was of the success of the SXSW Music event. It was paying the bills during that time. If we’d have been a standalone event, we would not have survived that difficult period.
Q: During that period, did you have a lot of difficult meetings where people thought. Maybe this multimedia thing isn’t working. Did they ever think: maybe we should just stop doing it?
A: Many things keep me humble. This was one of them. I remember an above the banner headline in the Austin American Statesman from 1998 that was something like “Excitement Coming to Austin: Music, Film, Rodeo, Multimedia!” No disrespect to the Austin Rodeo, it’s a cool event. But we were slightly below that. In terms of meetings, it was more me wondering to my boss, why are we doing this Multimedia thing? It doesn’t make any sense. We can’t find our audience. The Music festival brings the rockstars from all over the world. We’ve got this film event that brings in movie stars, and all I’ve got is a bunch of geeks.
Q: When did it tip?
A: Certainly the biggest tipping point was 2007 with Twitter. But, we started to see a little bit of an uptick in growth in 2004. A keynote speaker that year was a guy named Jonathan Abrams from Friendster. I had seen him on a late night TV show, and I thought this guys kind of interesting, let’s try to get him for SXSW. He turned out to offend about half the audience. That’s a common theme in many of our keynotes.
John: I remember in the early keynotes, those people in the audience were really quick to tell you if they weren’t pleased with what you were saying.
Hugh: Are you saying that from personal experience?
John: I’m saying it from watching it happen to someone I interviewed onstage. I don’t remember all the specifics, but that person answered a question and got hisses and jeers from the audience.
Hugh: It’s a tough crowd, not like this one… Jonathan’s keynote in 2004… when he offended some people here coincidentally or not, that was about when Friendster hit it’s peak uaage in the US. I think it is still popular in Asia. But that was our first real foray into social media. Who could have known in 2004? I mean, in retrospect it makes sense, but we didn’t know back then that social media was going to be such a big deal, so much a part of our lives. Many things contributed to our eventual growth after 10 years of non-growth. I would say that startups and social media are two of the biggest things. Again, particularly Twitter in 2007 [was the big turning point]. The irony of the Twitter story is Ev and Biz have always credited SXSW as the place they launched, but the fact is they actually launched about 6 months earlier. Thanks to both of them for that.
John: I know I wasn’t there that year, but I was following what was going on, somehow, before Twitter… maybe e-mail. Everyone was talking about Twitter. I knew it, because I knew Ev, but it became a big deal here…
Q: So, how many people are copmong this year
A: Probably about 35,000 total.
John: So about 35x growth, with most of it coming in the last 10 years?
Hugh: We were lucky enough to experience a hockey-stick level growth from about 2004 – 2014. It leveled off at that point simply because we really hit capacity in Austin. There were some years where the growth numbers were crazy. On the one hand you’re happy after not growing, after struggling so much for so many years. But it’s just as mystifying [to think] why are we growing now when we couldn’t grow before? Now, it’s the challenges of growth, of scale, of trying to retain the user experience that helped growth is very significant in and of itself.
Q: What year did the marketers show up?
A: You should ask these guys in the crowd… they’re the ones who know.
Q: The startups obviously caught on at some point. Was there a tip to that piece?
A: There wasn’t a Twitter-like tip there, but again, Twitter just changed things so much for us. More startups wanted to come to SXSW to be like Twitter, more venture capitalists came looking got the next Twitter. Branding and Marketing people wanted to come to discover the next big thing before their competitors did. Twitter was 2007. 2009 was Gowalla… remember them? And 4square actually launching the same day at SXSW.
John: Yeah, it was like a duel for the location-based services with the local favorite, less highly-funded Gowalla.
Hugh: Right. And Gowalla is in the digital graveyard at this point. What’s interesting here and even going back last year to Meerkat is the products, apps, services, startups that get the most buzz out of SXSW are the ones that help people digest SXSW. Twitter got so much use because people used it to find which parties their friends were going to, where they were eating breakfast or lunch, what panels they were going to… it helped the crowd digest a large event. Same thing with 4square and Gowalla… and Meerkat. You can broadcast you’re in a session that’s great or horrible. It’s simple, but it can be complex. If you want the most buzz at SXSW, figure out something that helps people better digest the event.
Q: Do you see anything this year that is an emerging possibility to break out the way those did?
A: It’s interesting on the eve of their one year success at SXSW, that Meerkat announced that they were pivoting, essentially changing direction, changing business models. Facebook Live is certainly doing a big push here, and it’s essentially an updating of that type of app. Again, we’re seeing more functionality with mobile devices that take advantage of increased broadband in terms of personal broadcasting. I think that if something breaks out, it could be that. We were surprised as anyone that Meerkat got so much buzz at SXSW. It was a perfect storm for them. I remember the Apple Watch press conference had been on Monday before SXSW. People were using it there, it got featured on Product Hunt. It had some buzz going into the event. It kind of broke all the rules that we thought had become rules in the sense that it didn’t have a whole lot of money, was a relatively small startup, and all the sudden it got huge traction out of the event. The common wisdom at that point was that SXSW had grown so big… to rise above the noise you have to have a huge budget, it’s impossible to do. But again, something that hits that sweet spot that helps registrants better absorb, digest or discover the event is what popped. Who knows if that will happen this year?
Q: How has Interactive grown compared to Film and Music and is it the muscle that’s driving the business as much as Music was before?
A; Interactive is the biggest industry portion of the event in terms of people buying badges. The tables have turned around from 15 years ago. Part of that growth came from people who were buying badges for Music started buying badges for Interactive to understand how they could navigate the change in the [music] content industry. Over the last 15 years, geeks have become the rock stars. That narrative of Mark Zuckerberg dropping out of Harvard, creating a startup, getting crazy rich… that so much powers the startup ecosystem, the startup mindset of people much younger than us doing cool stuff out there.
Q: Has Interactive has kind of consumed the film and entertainment industry?
Q: I notice you have a Convergence Track where you’re sewing the two together. So people who have both (Film and Interactive) badges can go to both?
A: Yes. We have more and more convergence stuff that tries to bring these industries together. The idea being that 25 years ago, it was easy to tell the difference between Music and Film, and this weird thing called Multimedia. Now, years later it is all so interwoven and blended together. We argue, discuss converse within our staff: if you have a session about a YouTube or Vine star. Is that Interactive because they’re using technology? No it’s film because they are the film stars of 2016. Or it’s Music a song that way. These lines are completely blurred at this point.
Q: Will it come to the point that you just sell one ticket to the whole deal?
A: That’s a pretty good idea, John.
Q: So will we hear about that more next year?
A: I’m saying there’s a lot of good ideas that come out of this event on March 10 right?
Q: What lessons do you have for marketers or brands who are looking to make the most at SXSW?
A: We’ve seen lots of interesting, crazy, fun, weird promotions at SXSW over the years. This year it’s the Ferris Wheel on 4th and Congress creating the buzz. But the things that will create the most buzz with this audience. the visual trend setters, the forward thinkers, the people with huge social media followings are things that help people better absorb the event. We’ve been lucky to have automobile sponsors like Chevy and Mazda. The thing they do best? Provide rides to people. That solves a problem for people since it’s so difficult to get around. The program was called Catch a Chevy and they provided free rides to people. That’s where they got the most buzz out of the event.
Q: Without naming names, I’ve seen some [brand] activations that seem a bit off… do you or a team approve how marketers get to activate?
A: We’ve taking a much more active role here.. in the wake of some activations that weren’t quite right.
John: Can you give us examples?
Hugh: No, there are too many people tweeting in here. I don’t want to do that. But we do try to give brands guidelines to help them be successful here. As the event has gotten bigger, we know there is more noise. Now, rising above that noise is always a challenge. It’s harder and harder for a brand or startup like Meerkat to gain traction. A story that I still love is that when foursquare launched when we thought location-based apps were the next big thing, the promotion that Dennis Crowley did was he drew a four square with a piece of chalk outside the Convention Center. He was playing foursquare with people. I mean you’re playing four square with the founder of foursquare. It wasn’t reaching huge numbers of people, but it was reaching people who could create buzz about it. It’s harder to do that now since we are more strict about brands using chalk on the sidewalk, but…
John: Admit it. This year, you would have kicked Dennis off the sidewalk.
Hugh: I like Dennis. I wouldn’t kick him off. Maybe others.
Q: What people find most valuable are the vast number of get-togethers that happen all over town. So much good stuff. What’s your point of view? Is there an official view toward the unofficial side of SXSW?
A: We are much more aggressive in terms of trying to control unofficial events. That’s mainly due to safety, since we take safety more seriously than some of the pop-up events do. As organizers, we try to bring those unofficial things in. But, most attendees can’t tell the difference between what’s official or unofficial. Attendees know, I went to Austin, had a great time at SXSW, went to a party, met great people, I made connections, I got business opportunities out of it, it was a worthwhile experience. It’ s a cops and robbers game. As soon as we bring them in, other unofficial things come up.
Q: SXSW really lights up the city.
A: It does take over the city. That’s a good thing for a lot of people. But lots of people don’t like this week because it’s a huge traffic disruption. For many years, some will tell me, “I’m not a huge fan of SXSW, but I rent my place out via Airbnb that week, so you paid for my vacation. There’s a thriving under-the-radar economy there.
Q: Lastly, tell us the story about President Obama speaking here:
A: We have been working, cultivated relationships in the White House, particularly in the Obama administration, for many, many years. There have been speakers from the White House who have participated in panels, other speakers who’ve moved onto the White House. We’ve had pretty strong context there. There has been interest in previous years, but the timing didn’t quite work out. This year it did work out… I will say that the White House was very easy to work with throughout this process. There was very positive conversations. It wasn’t confirmed until we announced it last week, so we were sweating it out. I’ve said before that in the State of the Union address in January this year, the president mentioned Austin, at one point, while talking about startups.
Q: What’s President Obama going to talk about?
A: He’s going to talk about 21st century civic engagement. That geeks should go to Washington D.C., help reinvent government, help make it more efficient and effective. I think it’s a really good message for SXSW. We’ve pushed community good social causes for a while, and this fits well into that. That said, we also know a lot of the audience isn’t particularly political and believes that the government doesn’t understand technology all that well. They’ll be somewhat skeptical of this message.
Questions from the audience:
Jessica Federer, Global Head of Comms and PR Bayer Healthcare Animal Health:
Question for John: Are we going to ever see NewCo Austin together with SXSW?
A: We avoided SXSW. I’ll tell a story. I thought in 2007 or 2008, I noticed marketers were coming to SXSW when I was with Federated Media and we were doing events. One of them was called Signal. I actually called it Signal SXSW. Big mistake. I had Marissa Mayer come and asked other people to come a day early. It was kind of like the PreCommerce Summit. I reached out to Hugh. We worked it out. I changed the name to Signal Austin. Ever since that time I was one of the unofficial events and I was making such a bad mistake… Fortunately, I got pulled into the tent. From that point on I made sure I got Hugh’s permission and that I didn’t schedule anything around SXSW. Now, NewCo Austin will happen in July.
Rohit Bharghava, CEO & Founder, Influential Marketing Group
Question for Hugh: With so much activity in terms of content sessions, are you looking at the TED kind of model of making video stream recordings available?
A: We do record audio of the sessions and make them available as podcasts after the event. We’re doing more with livestreaming. TED is this finely curated meal. And that’s wonderful. [SXSW] is a 24-hour all-you can eat buffet, and that’s wonderful at times too. Presentations and panels are great, but ultimately what people come to events to meet other people, make connections, have face-to-face conversations that happen outside the panels, at the bar, happy hour. Panels are just the hook to get people in and to market the thing.