Bizzabo – Product-Market Fit and Pivoting
Iterations, Pivots, and Everything in Between
Company
Bizzabo
Founded
2011
Bizzabo was created while its co-founders were all in the Zell Program(Zell 9 – 2010). For context purposes,during their ideation phase, Boaz, Alon,and Eran were avidly following the changing landscape in the mobile space created by the launch of the iPhone 2 and the evolving transition of mobile users from Blackberry.55 This Zell team’s first idea, originally called SafeLet, paralleled that of Airbnb. After working on the concept for two months, Airbnb launched with $4 million dollars in funding.56 Not wanting to go head-to-head with Airbnb, who at the time had raised from strong investors in San Francisco, Boaz, Eran, and Alon, along with their additional teammate in the program, Nir Blumberger (Zell 9 – 2010),57 killed the idea and instead focused on the event space. While not quite amounting to a pivot, this still marked an important turning point in the Bizzabo founders’ timeline.
So why such a shift from hospitality to the event industry? It went something like this: Boaz and his co-founders were attending conferences to further their research in the hospitality space and noticed how difficult it was to find the people and businesses for which an attendee may be looking. There was no seamless way to navigate the event and use your time as an attendee efficiently with such a high volume of people and businesses crammed into one space. The first iteration of Bizzabo was a business-to-consumer (B2C) app aimed to help conference attendees network better with businesses and individuals. They wanted to be the app for business events, and envisioned it as a fusion of LinkedIn and FourSquare with capabilities offered by the then just launched Whatsapp.58
They laid out their growth strategy, choosing specific types of conferences in major cities like New York and Tel Aviv. From the idea’s conception, the core Bizzabo team knew they would face difficult challenges inherent to consumer-facing businesses, their biggest concern of which was how to create a viral effect. As with many startups, and in particular B2C startups, getting referrals organically is the only way to survive and achieve growth without a huge capital investment in customer acquisition. However, achieving virality, or the circulation from one user to another without having to pay for it, was elusive. Their goal was to create more awareness and drive more people to join conferences (thereby increasing their value to conference organizers while at the same time growing their user base). From partnerships with the likes of Eventbrite to social media initiatives and the use of event organizers as a marketing channel, Bizzabo tried to attract a critical mass of users to its mobile app, and in doing so, persuade more users to attend the conferences with which they were working. These efforts turned out to be a flop.
But the team didn't give up. Their next attempt was to create a web interface that served as a gateway to the Bizzabo app. This, too, was a flop. “Everyone we spoke with told us it would never work, and well, they were right,” Boaz said, laughing in acknowledgment of their failed attempts to crack the viral effect.
After over two years without reaching the viral effect they needed to grow their app user base and meet their goals, Boaz and the core team raised a white flag and agreed it was time to pivot. The Bizzabo team may have hit a dead end with their B2C efforts, but they learned one key insight: event organizers wanted them. That’s when Bizzabo shifted to a business-to- business-to-consumer (B2B2C) model, where the customer is a business servicing consumers, and raised a $6 million dollar round with that focus.59 It is notable that Bizzabo’s early backers continued to support the team throughout the long journey of finding product- market fit.60
They started by selling content packages to event organizers. To be specific, the Bizzabo team built a portal where organizers could add a new event, build an agenda, upload their logo, and once finished, upload their event to the Bizzabo app. They retained their vision of maintaining a critical mass of users who would discover conferences in their area via Bizzabo, but tweaked their strategy by supporting the event organizers through content logistics and exposure. At the time, as the spread of digitization grew, this was a unique value proposition for events. Eventbrite was a market leader by then, but Bizzabo was offering a complementary service.
After a few months on this trajectory, the Bizzabo team realized that although their pivot was bringing in some revenue, it was simply not scalable. After analyzing the behavior and needs of event organizers, they quickly understood that the Bizzabo concept was missing the “sticky element,” as Boaz described. “There was no loyalty. We had a lot of “Brads“ [a customer persona Bizzabo nicknamed to represent a single-event organizer] but understood that targeting ‘Brads’ would not scale. The offering was not strong enough.”
With enough runway left from their last round of funding and keen to not waste any time, Bizzabo shot straight for their biggest pivot to date, creating a business event success platform, a holistic solution serving all of the needs of event organizers. This required a heavy technology build phase, so the core Bizzabo team raised more money to support their new direction, and put their heads down for 10 months in order to release their MVP. The platform addressed all of the digital needs of event organizers, including helping them to promote, execute, and track their business events. The product’s new focus ultimately demonstrated the Bizzabo team’s unwitting evolution into industry experts, something they admitted they hadn’t achieved in their previous attempts.
In less than a year, Bizzabo released their all-in-one platform with capabilities that would otherwise require event organizers to seek out a handful of platforms. Such features included:
- Website builder (like Wix)61
- Email marketing capabilities (like Mailchimp)62
- Agenda builder (like Sched at the time)63
- Registration platform (like Eventbrite)64
When it came to the registration component, Boaz described its inclusion as particularly difficult for various reasons. For one, they built out the tech requirements in five months, a very compact turnaround time period for the Bizzabo tech team. Aside from the demand on resources, Bizzabo also added this feature with a heavy hand as they had managed a very collaborative relationship with Eventbrite65 at the time, and then pulled a 180-degree flip, converting them into a competitor. All things considered, Bizzabo played nice and gave Eventbrite full notice of its intended pivot.
Once the product launched in 2015, it quickly attained a very obvious product- market fit. “The business event organizers started to flow in and we did a lot of marketing to support this influx during the 10-month build period leading up to the launch,” said Boaz when describing the platform’s initial success. Their initial customer base was mostly inbound leads, as people by the hundreds began clicking on demo requests, all within just the first two to three months of their product launch. This was a product marketer’s dream come true. Despite achieving excellent customer acquisition metrics, Bizzabo wasn’t out of the woods quite yet, as it faced new pitfalls concerning the business model.
Bizzabo’s revenue model at the time was similar to that of any other registration-based platform where the company would take a cut from the ticket price (business event tickets from Bizzabo’s customer base averaged about $400 a piece). Considering the success of similar platforms, they naturally assumed that the revenue model would work just the same, if not better, because on average, business event tickets were priced higher than those of events posted on other, less business-focused platforms. The assumption was wrong. From ticket cancellations to ticket promo codes, Bizzabo learned that basing their revenue on ticket sales would more quickly run them dry than lead to revenue growth.
“Event organizers were overly optimistic when it came to turnout rate,” said Boaz, describing one major gap in their revenue model. Bizzabo would give out heavy discounts to organizers based on large expected ticket sales, but the actual attendance of these events would often come up short. Bizzabo experienced this across the board with many of the organizers who hosted large business events. All in all, the business model simply didn’t scale.
And here came yet another pivot, but this time, Bizzabo radically changed its revenue model from fees based on customer ticket sales to a simple subscription model. “We stopped caring about the ticket price, if they were free or already paid for. Instead, we offered a few pre-priced packages where the expected amount of people registering was the key differentiator,” said Katz.
The package payments were upfront, and if customers wanted to add individual attendee registrations throughout the year, it would be more expensive. Along with a change in model, Bizzabo also changed its target audience and became solely business-to-business (B2B), focusing only on corporations and on the marketing agencies within them.
“This was around the time that we internally coined the phrase ‘Brad is Dead’, and no longer sought out the single-event organizer,” Boaz said. These changes added a new layer of difficulty, as Bizzabo had to educate new behavior from its customer base, training them to think strategically about all of their events annually, instead of each event as its own economic unit.
Over time, this model helped Bizzabo stabilize, and it eventually led to high growth across metrics like Customer Acquisition Cost (CAC), Lifetime Value (LTV), Annual Contract Value (ACV), and various others that they constantly monitored. Because Bizzabo didn’t have one simple way of cracking such benchmarks, they continuously worked on tweaking and fine-tuning all of their features and aspects of the business.
“We literally fought for every one percent of business improvement,” Boaz said.
Bizzabo managed to grow the average package sizes it sells over the last four years. Whereas it started selling packages for $4,000 to $10,000, it is now selling packages that cost upwards of hundreds of thousands of dollars per year. Every improvement the team made to the platform has managed to show growth in the amount customers are willing to pay
for the platform annually. Over time, they have also widened their customer base to include small and medium-sized businesses (SMBs), and even large enterprises. Every time they have welcomed a new audience type, Bizzabo has had to work day and night to meet their needs. Ultimately, their approach to revenue, their target audience expansion, and their tireless pursuit of feature improvements have led Bizzabo to economic growth.
But then COVID-19 hit. When it did, Bizzabo understood something was happening early on. They are very active in Asia and started seeing event after event canceled, going from an average of about 110 events a week to zero. The co-founders were all in Israel for a leadership off-site, and realized that within a few days, the plans they were making for the next year would be utterly irrelevant in the face of the emerging pandemic. The first action item was to halt employee hiring (they were at 150 employees), but they also worked fast to gauge the landscape, and brought their board of directors into the discussion. They cut costs (travel being a no-brainer) but also realized that the biggest cost savings would come from employees.
The painful part of the journey was to have to let employees go. They attempted to do this respectfully and allow for a return if things would pick up, without directly promising.
As Boaz explains in an interview at Reversim Virtual Summit, “It was really tough to have to impac 40 families like that.”66 But they quickly crafted a plan and vision for the future.
It was clear to Boaz and his team that there would not be live events in the near future. A turning point came after a virtual event that they themselves ran. It was an experiment using their side brand, which included a blog and podcast called In-Person,67 and they called it: (Almost) In Person – A Virtual Event for Marketing and Event Professionals.68 This led to a great deal of interest from their customers, who were hungry for alternative event solutions. The largest pivot of them all for Bizzabo, thus far, was turning from an in-person to a virtual events platform, and in doing so, the product became the center of the event rather than the support function the team had thought they were building. This pivot resulted in a $138 million dollar fundraise.69
