Entrepreneurs' Roundtable: Not Answering to Anyone

Michael Hart -- Tradeshow Week, 3/26/2007

Entrepreneurs come in all shapes and sizes, from all kinds of backgrounds, with all kinds of reasons and every dream imaginable.

TSW Editor in Chief Michael Hart talked to a handful about how and why they do some of the things they do.

Why do you choose to work for yourself, rather than one of the larger show organizers?

Scott Goldman: I've always been an entrepreneur. I started my first business in the basement of my parents' house, selling business forms and printing as a broker, at 15. That's also how I came to find trade shows. I snuck into the Nassau Coliseum on Long Island so I could attend the printing tradeshow. (I was too young to get in the front door.) Since then, I've just had the show bug.

Of course, I'd love to know what the larger organizers know. Finding that level of successful execution would be great.

Ted Coene: To have an equity position. That's how you achieve real wealth, through ownership. Ultimately, down the line, you sell it and make a lot of money.

Janet Ludwig: I am in a family business and a family member. I love this environment.

Sean Guerre: I actually started with a large company, a large publisher with a tradeshow division that was a lot of fun and great training. I saw opportunities that maybe a smaller company could pursue, maybe more easily than a large company.

There were certain show management opportunities that existed for associations in the energy industry as well as some joint-venture events that a larger, more well-funded, full-time media publishing company wouldn't want to pursue. They primarily like to have 100-percent equity events.

What is the most satisfying thing about being an independent entrepreneur?

Goldman: Realizing that what you created didn't exist until you made it. In more general terms, as a business person, it's great to be able to control the whole experience and define how you want the business to run.

There's the independence of being able to walk away from a client who may be paying you good money, but isn't necessarily a good person to do business with. Being able to forego the money, for the sake of your own integrity or your sanity, is something not everyone gets to do, and the first time you do it is great.

Guerre: It's creation. It's exciting to create a company, to create events, things that never existed before, and have them become industry-accepted meetings.

Coene: Being your own boss, not answering to anybody.

Ludwig: Freedom and satisfaction when we deliver success.

What is the biggest frustration?

Ludwig: Funding for growth.

Goldman: Building out a staff and delegating tasks. I've got great people, just not enough of them. A right-brain type needs a left-brain type to be successful.

Guerre: In the early years especially, everything takes longer and costs more than you think it will. You get so used to having all those different departments in a large company that handle HR, taxes or accounting. If you're small, you are most of those departments. It's frustrating because sometimes you spend more time on that than organizing the show.

It does get easier as you get bigger though. You start to add more people, more events, more products. You get a little more support, and your team does a little more of the work.

Coene: Lack of access to capital, and competition with larger companies for talent. Larger companies have bigger purses and pay more. They have more resources. They drive salaries up.

What's the smartest thing you've ever done as an entrepreneur in the tradeshow industry? And the least smart thing you've done?

Guerre: (Smartest) I'll put it "smartest-slash-luckiest": Picking energy as a large umbrella to hold our events. Making that choice back in 1997 seemed to be pretty smart.

(Least smart) Leaving energy. We did have a couple of forays into other areas, particularly public shows, and those did not go well for us. They would definitely be in my failure column. We should have stuck closer to our core industry.

Ludwig: (Smartest) When we put the money into hiring someone who has the experience and knowledge in event management, and gave them the authority.

(Least smart) Not doing it sooner.

Goldman: (Smartest) I put a lot of myself into the event, and attendees know me. It's got to be personal. People know there's a face on the show, and it's yours. Your audience can't be "they." As far as anyone is concerned, you're just another one of the group, whether it's architects, quality assurance managers, whatever. You're one of them.

(Least smart) How about trying to run our own registration using three Macs and some label printers? Or printing a speaker's name before he's been invited?

Coene: (Smartest) Getting into the event business. It's much more profitable than magazines. The profit margin for magazines traditionally runs 10 to 20 percent, and our most profitable event this year will probably run close to 50 percent. The cash flow is much better in the event business.

(Least smart) We collocated our tradeshow with another large event a couple of years ago, and it didn't work out very well for us. The idea of collocation isn't bad; it was just that collocation with that particular partner didn't work out well for us. It was a bad marriage.

How do you know when you have a successful show?

Guerre: If it becomes adopted by the industry as the meeting place, if the industry starts to talk about it as their event. That's the best way to gauge your event. That also creates a very high barrier of entry for other people.

Second, following very closely, are certain revenue and profitability goals. It needs to be both of those things. Just achieving the revenue, without creating the industry meeting place, leaves you open.

Coene: When we make a profit; that's the basic one. Also, after you've had that show, how's your renewal rate? You want to strive for around a 70-percent renewal rate. If you hit that, you've done a good job.

Goldman: Personally and emotionally, there's a validation when a larger firm wants to buy your event. But there's also a tipping point when you can say that you know for sure that the show will go on again next year, and that your event is something people in your field will plan on attending as a matter of course.

In other words, once it has enough momentum to sustain itself. You can really feel that tipping point at the show, by how people talk about the event and how it relates to them.

Ludwig: When the event hits standard profit margins. Small companies get calls everyday to buy them; it is not an indication of success.

Is being an entrepreneur getting easier or more difficult?

Coene: Initially after 9/11, it got more difficult. In the last year or two, it's gotten a little easier as our events have become a little more successful and we've been able to attract better talent. It's made my job easier. Profitability makes you able to do more things.

Goldman: It's certainly getting easier. I've learned how to take things we learn from one show and apply them to the next. So it's a little more systematized.

And I've gotten more comfortable with letting others, such as our partners and sponsors, take the credit even for the things we do. We're in this as a business, so the glory can go to someone else. We'll just keep the money.

Ludwig: I am not sure if I would classify myself as an entrepreneur. I am the third generation in our family business. I find that our challenge is taking the company from a small company environment and moving it to the next level.

Guerre: It's definitely much easier. We built up some solid management over the last nine or 10 years. We have a lot of events that have reached a more mature stage and, I think tradeshows offer a great environment for entrepreneurs. We're on an upswing in our cycle, so I think it's a good time.

What can organizations like Society of Independent Show Organizers, International Assn. of Exhibition and Events or the Center for Exhibition Industry Research do to help business people like you?

Goldman: SISO is really the only one of those groups that gets it. It's clearly the best resource I have for advice, ideas and inspiration. We'll have sessions at SISO events just for the smaller owner, and lots of informal networking and discussion between owners, both at SISO and afterward.

Recently, a show owner I know from SISO called me. His show was coming up, and he'd just lost a key category of attendees, due to forces outside his control. He was pretty anxious and concerned. We talked and, by the end of the call, he was in off the ledge, so to speak. A few weeks later we had the same chat, only this time he was the shrink and I was the patient.

Guerre: I joined SISO the year I started my company, and what they do through their conferences is provide a lot of how-to information for for-profit tradeshow organizers, (which) has been very instrumental in helping me grow. It has led me to business opportunities for new events.

IAEE and CEIR do very well in their own right. IAEE particularly when it comes to training the people who work with me. Being in Houston, I have to bring in people who don't have any tradeshow experience, so they provide a great training ground.

The newest evolution of CEIR presents a great model for our industry, as a voice to help communicate what tradeshows are about. It seems like a great central clearinghouse for all that data.

Coene: They can be a source for new talent. That's one of the key things for a small company like ours. I'm always looking for that. Also, a source for financing. I don't think they do that enough.

Ludwig: I would find helpful business models that include benchmarks and financial expectations for different kinds of events.

What would be the pinnacle of success in your career?

Coene: When Group C becomes one of the big companies, or when we sell to one of the big companies. That gives you validation that you've done a good job.

Guerre: Every year I've felt like we've done better than the year before. At the same point, there always seems to be more we could get done. I haven't really identified what would be considered to be the pinnacle. I would guess it would be creating a company and events that are self-sustainable after I'm gone. I think most entrepreneurs would consider the pinnacle being something that exists beyond their point of being involved.

Ludwig: Building a business that delivers growth for the people, and growth and profits for the shareholders.

Goldman: Being interviewed by Tradeshow Week?