COVID: Should you launch a virtual events business?

A founder wanted to run paid, virtual, events, somewhere in the $XXX ASP. He asked me about a structure and costs, for the early go-to-market team.

In the low ASPs making the numbers work is painful. Let’s say you mimic a physical-events calendar, with roughly an event per month. For example: 12x$300 = $3600, the business doesn’t work, since you can’t cover a single salary.

At one event per week, 48X$300 = $14,400. That still doesn’t cover the cost of the SDR/Growth rep ($70K, fully loaded). But you may find some options at UpWork. The founder assumes the content creation costs.

If you run a virtual event every day (requires a strong content playbook), the numbers improve: 261 X$300 = $75k. Now, If you can charge $900, you growth rep could cover 3X her cost.

In theory, virtual events are not constrained by physical space, so you could potentially run them ad infinitum. So a few things have to go well.

From a go-to-market standpoint, what is required to consistently drive paid attendance to an event?

If all you need is to identify and blast out messages to an email list, you can get away with doing it yourself, hiring an up worker, or bringing on an intern. With a few successful events (content starting to work), you could consider a part time/full time marketing hire.

If email conversion rates are low and you want to actually chase people down, you’ll need folks who can pitch the product and handle objections (strong email copy, or phone skills).

If your audience is highly technical, or senior, you have to raise the sophistication of the person doin the outreach, which generally means a higher base salary. Since the ASP is low, a higher OTE (base + commission earnings) options are limited.

On the plus side, in a remote-first world, you don’t need physical space (so scale) and with enough interesting participants - one doesn’t need a headliner (the clubhouse model).

On the other hand, there are plenty of free, virtual events. And you are competing with Netflix, for after work time.

Ultimately, the idea would be to test with very low spend to see if the business mode cathes.