$1.3 million dollars. That's how much money an event called Taste of Chicago lost in 2012. In 2013 the Canada Cup lost $20,000.
And these major financial hits aren't limited to large events and festivals. Even the little guys take on an unreasonable amount of risk when organizing an event. High promotional and ticketing fees, lump sum deposits for venues and supplies and the uncertainty associated with ticket sales make it nearly impossible to try a new idea without taking on a huge financial risk.
This isn't going unnoticed by a few ambitious startups that are hungry to take on the event industry and the big players that have organizers confined to a high cost / high risk model.
According to Jay Parmar, founder and CEO of Picatic (a ticketing platform that allows organizers to pre-fund their event) and author of Shit You Should Know Before You Throw a Bitchin' Event -- everything about the event industry is backwards. Organizers are expected to take on huge financial burden before they've even validated whether or not the event is a good idea.
Here's a Q&A with Parmar about what's wrong with the economics of an event and how "eventreprenuers" can de-risk their own financial investment.
Q. What's wrong with the way events are facilitated online?
A. Until Picatic, events were set up and hosted backwards. People would buy a ticket, hope the event is great, show up and then find out the event is a flop. Meanwhile you've lost time and money planning a dud. Poor attendance is not good for eventrepreneuers -- not only do they lose money but they can also lose credibility as an event planner.
We've reversed the process. First, make your money. No one should ever lose money for trying to host an event. Once you are certain your event is going to be successful put it on. Crowdfunding the event allows event organizers to test their event without financial risk. Not only is it a great way to save yourself from going out of pocket, it also sparks creativity to try things that otherwise are impossible.
Q. Crowdfunding has been the buzzword in the last couple of years -- why is it particularly powerful in the context of event planning.
A. Crowdfunding is incredibly powerful in this aspect because there is no more vulnerability for event organizers and event attendees. Event planners post an event and early adopters who jump on the chance to make an event happen are rewarded with either discounted tickets or perks.
To take things a step further in we also changed to a FairPay pricing model which allows you, the organizer, to choose what you pay in ticketing fees.
Eventrepreneurs save money, as their sales cycles are condensed, and they are able to put on more successful events. Attendees no longer have to show up to poorly attended events wasting their precious time. No more risk, no more vulnerability just pure profit.
Q. Picatic is competing with some pretty major powerhouses including Eventbrite, what makes you think you've got the winning formula?
A. We didn't know until we tested it out. We were nervous as hell, pushed a new trend, found product market fit and it worked. Once we started receiving feedback and testimonials, industry leaders were excited and started mentioning us on lists as new trends to follow. Crowdfunding and pay what you want for service fees is new.
It's makes it a no-brainer -- there is no risk to using our platform, you choose what you want to pay and that's it. No hooks, no hidden fees, no bullshit.
Q. Event planning is hard, and as we've seen it can be quite risky. Any tips for organizers?
A. Pre-marketing. Experienced event organizers know this trick and know it is a tried, tested and true technique to get events going. Use your centres of influences, capture early adopters and using perks to drive ticket sales. You can download my eBook and I'll walk you through exactly how to do this -- its free and reveals the tips and tricks that all the pros use.