Only a handful of entrepreneurs can boast having run one of the top five fastest growing tech companies in the world.
When it comes to event technology, that number drops to one or two. One of them is Lawrence Coburn, a visionary entrepreneur that, at one time, was running the fastest growing, most exciting event app brand in the market.
I sat with him to hear his side of the story. The beginning, the growth and the eventual exit to none other than Cvent. I also asked him about his new venture, The Gathering, which closed its first round of funding in the space of a few months.
Is event technology too tough to crack? What’s the role of IRL in the ever-changing panorama of social networks? These are some of the questions Lawrence answered with incredible honesty and passion for events.
(EventMB) Lawrence, you recently announced your departure in September from DoubleDutch, the company you founded and sold to Cvent. Let’s take a step back, where did it all start?
Lawrence (L): I had been the CEO of another company, my first company, called RateItAll.com. We were kind of like an early social network, but we were very dependent on search engine traffic. One day in 2010, Google changed the algorithm and a lot of rankings changed, and overnight, my company went from having a very good, very profitable business to barely having a business at all.
The legend is, which is mostly true, is that I went to a bar in San Francisco’s Mission District called DoubleDutch. We were sitting there, I was drinking a beer, and my phone was on the bar. In a moment of inspiration, I picked up the phone and I said, “the next great company is going to be built on this and could not have existed before this – let’s start working on something that couldn’t have existed before the smartphone.”
We came up with three ideas that we were excited about; the third idea was this events thing. It was so obvious that it was needed: an event app to help attendees communicate and bring all the stuff that was on paper into the software.
You witnessed incredible growth in the first 2-3 years – few people have experienced such growth in eventtech.
L: There was a period of time that I think we were one of the 5 fastest-growing companies in the world in any category. You hear that expression, “catching lightning in a bottle” – it’s very much like that.
Anybody our salesperson called wanted to get a demo, and 40% of our demos turned into closed business.
We were hiring 25 people a week. It’s electrifying, it’s terrifying, it’s out of control. There’s no good way to handle it. All of your systems are breaking at different times. When you’re growing that fast, it’s just a constant 5-alarm fire where some corner of the business starts to break, so you throw resources at that thing and then the next thing breaks. You’re just trying to plug all the holes as you steamroll forward.
But it’s fun, it’s exciting, and if you’re in it with people you like, you’ll never forget it.
At some stage, things started to change. The event app market started to get crowded. What was the turning point for DoubleDutch that started to change the company? Is there anything you would do differently looking back?
L: That’s literally the billion-dollar question.
One thing about mobile event apps is that there is a very low switching cost. When you’re trying to build a SaaS model, it’s all about retention.
What we found is that mobile apps themselves are challenged as a high-retention business, and there’s a couple of reasons for that. Some of them are endemic; a lot of events are not recurring and simply don’t happen in year two. So some of it is automatic churn.
Underinvesting in services meant that the event planner (who is the busiest person in the world) had to learn how to deploy a new event technology, and we didn’t have someone onsite with them. And so they would often strip out some of the technology and features that made our product great just to simplify it – just to de-risk it so things didn’t go wrong and pull them in a direction they didn’t have time for. This led to a less impactful experience and, in turn, lower retention.
And so it was partly our fault. We got so addicted to the growth that someone would ask us to power a wedding for $20,000, and since we could spin up an app in an hour, we would take that business. Well, the problem is that, in year two, that looks like churn, and if you add up all those bad year one deployments, you end up with a problem.
So I think it was a mix of our being in a tough category – the low switching costs, the non-repeating events – but also mistakes that we made, like the lack of focus and underinvestment in services.
You may have felt that joining Cvent was your only option, but it’s still an excellent option. When did you realize it was time to sell out and give it to someone else to take better care of the product and the people that you care a lot about?
L: Cvent’s relationship with DoubleDutch had been very contentious over the years. It was only until we joined forces with them that we began to appreciate them as good, smart people who cared about the industry. You don’t realize these things about your competitors until you get to know them.
But to answer your question, we put a big weight on our backs through decisions that we made in 2016. We had a cap table, which is basically the order that investors get paid out. We raised $90 million in the business. What that means is, if you’re a new investor coming in after that, you’re not going to get paid back until the first $90 million gets paid back. So it becomes very hard to raise new money.
Through our hyper-growth years, we burned a lot of money. We got to the beginning of 2018 without a lot of cash left, we knew it was going to be very hard to raise new investment, and so we were going to have to take our last shot with the cash that we had.
This is not a sad story—most businesses in the world have to figure out how to grow with just the cash that they have.
We attempted our own event series to drive demand for our tech. That had very positive results, but it was also very time-consuming and it was sort of a mixed bag in terms of revenue impact. It didn’t deliver the ROI as fast as we expected.
So 2018 was all about getting our burn down to break even, getting our retention up—we added 13 points to our retention, which is incredible to do in a year. So we came into 2019 with just a bit of cash but a viable business, showing signs of being able to come out of it.
Then, we missed our Q1 targets. We had some bad luck—it was just one of those things that happens in our industry. Suddenly our margin for error got really tight. I talked to the board, and we looked at every possible scenario. What new cash could come into the business? Should we close San Francisco and circle the wagons in Phoenix? Should we merge with another big player to get more scale and gain access to more resources to invest in product and engineering?
At the time, it just looked like the best path for our people was to go to a company like Cvent Vista that admired our tech, admired our talent, admired our toughness, and could give good jobs to everyone that wanted them. This way, we could continue the DoubleDutch brand and deliver it to a larger audience, and also get some return back for our investors.
I think I was the last one to come around to that thinking because, as the founder, you always think you can find a way out and you can keep going.
I remember that, at the very end, it was me and Kasper, our CTO, who is now in a senior role at Cvent, basically going through all the scenarios and just saying “I think now’s the time.” So we reached out to Reggie and crew, and they were super gracious. We got a deal done pretty quickly.
That’s awesome. It shows a lot of leadership, it’s not an easy one to do for sure, letting go of your baby. We know very well, after our acquisition from Skift on a much tinier scale.
Let’s talk about the industry and what’s next. What’s your take on the state of event tech?
L: There’s still a lot of innovation to happen. Cvent is operating at a very high level. They’re incredibly knowledgeable about all the new startups and systems. They’ve instrumented their business very well and they know when they lose deals, and why they lose them.
One thing [Cvent has] done that is under-reported in the press is build this incredible, organic demand generation funnel with their venue directory.
It basically works like this: event planners looking for a venue (which is the first thing they do when they’re planning their event) do a search and gain access to this network effect that is the best resource in the industry. This, in turn, spits out qualified leads for their event technology. It’s free to them, so they actually get paid on all sides of the equation.
That said, I think there are two ways to compete with them.
The first way is via a roll-up strategy. There’s so much capital floating around, and there are a lot of interesting startups that, by themselves, probably don’t have much of a chance. But there are a lot of interesting eventtech entrepreneurs with experience at scale floating around on the market. Could someone with the experience and the capital come up as a competitor to Cvent? It would be really hard, it would take the right operator – the right money. I’d give it even odds at having a shot there. But that’s one possibility, and I’m surprised that no one has done it yet.
The second way to compete is to wait for the next platform shift, much like DoubleDutch did with the rise of mobile.
But I do think that competing head-to-head with Cvent as-is is a losing proposition because they’ve just built this end-to-end machine and they’re executing at a very high level.
Let’s talk about the future. You just started a new company and its first round of funding. Can you tell us more?
L: So my new company is called The Gathering (www.thegathering.co), and it’s kind of a consumer facing “anti-Facebook” that leverages live experiences to bring people together and help them live happier, more connected lives.
So let me tell you some of the inspirations for this business.
In the last chapter of DoubleDutch, there was an area of engagement tech that was particularly interesting to me. It was the intentional driving of one-on-one conversation. Historically, of course, there was very little face-to-face engagement tech in the world of events. Then came DoubleDutch and QuickMobile and others, and we introduced this sort of passive engagement / networking tech, like messaging, feeds, and profiles.
By 2018, DoubleDutch’s most thoughtful customers were calling for more intentional functionality around face-to-face engagement that actually gave people nudges to go out and have conversations. I found this area very exciting.
We all know that the top reason people go to events at all is to connect with other people, and it seems like there was an opportunity for some vendor to do better there.
OK, so humor me for a second.
We believe that there is an opportunity for us to leverage our deep expertise in using tech to drive meaningful one-on-one conversations and to electrify live experiences in order to build out the next great social institution – one that is rooted in face-to-face.
When you talk about consumer social networks, there’s a high level of fatigue that’s happening right now, particularly with Facebook. I think there’s something about exclusively digital, advertising revenue-driven, one-to-many broadcasting and the filtered, highlights-only activity feed that takes us away from our humanity and actually makes us feel sad.
To many, it feels like Facebook has prioritized ad clicks over the wellbeing of its users and has thereby lost our trust.
To me, the obvious antidote for that is “IRL” – in real life. Face-to-face. Getting back to basics. What if we could combine the best of the event tech that drives meaningful connection between strangers and fuse it with the best of social media 1.0, which drives ongoing community?
It’s about finally bringing together the online and offline social experience to build the next great social institution. And if we can take these concepts and unleash them at a consumer-grade, global scale? This is really exciting to me, and something that can actually change the world for the better.
I can’t go into too much more detail, but that’s what I’m working on with The Gathering. We’re basically trying to take nine years of learnings at DoubleDutch of how software can make face-to-face better, and make these experiences and this social connectedness available to everyone via a consumer business. Our core mission is to use technology to drive meaningful one-on-one, face-to-face conversations.
It seems very in the zeitgeist. Tech can give us a lot of context so that, once we meet in real life, especially for introverted people, there’s already a big push to make meaningful connections. We can’t always leave it to serendipity. Can you tell us more about the next steps with The Gathering – whatever you can share?
L: There’s a lot happening. We’ve secured a first round of funding. We’ve targeted our first market, it’s going to be NYC, launch date in March. We’ll probably do some private experiences before that. There’s a team of seven that’s heads-down on it and working on product right now. That’s about as far as I can go right now.
On our end, it’s refreshing to know you haven’t left the domain of tech-assisted live experiences. We’re very excited to see what’s next with you and with The Gathering. Would you like to leave us with any closing remarks?
L: I think the future is bright for the industry. There’s so much innovation that can happen – so many good, small teams working on little pieces of the puzzle. What we’re going to see is that the domain knowledge of our industry – of the event planners, of the people that can facilitate world-class live experiences – we’re going to see that increasingly catch the attention of the giant software companies out there. And it’s a credit to our industry; we’ve come a long way.