Surviving COVID in the events industry
We thought that Fuckup Nights was an an extremely resilient social enterprise, with no immediate threats.
We operate in 90 countries, work with different currencies, own two income models, have a strong brand and high margins, many of our beloved clients who love us are stable and recurrent… what could possibly go wrong?
A sudden global change that could destroy our industry: the events industry. What do you do when you’re at your lowest flow point and 83% of your income is at high risk?, when millions of pesos in contracts are about to crumble?
We’d like to share some of the activities that Fuckup Inc, and The Failure Institute have adopted during the last 3 months, we hope they’ll be useful in inspiring more people to keep going.
The first step was recognizing that we couldn’t predict what was going to happen. Instead of guessing, we created a daily COVID-19 update email which included global data about the pandemic and how our operations were affected. For example: “5 events canceled today”. In this way we got a better understanding of trends, their speed and the possible financial and operational implications.
In my weekly report I shared a brief update on our financial status with the whole team. Being completely open about our sales, income, outgoings and runway (the time remaining before we run out of money). This transparency generated ownership and focus within the team.
Then the next step in order to safeguard money, was to reduce all variable costs as soon as possible. Suppliers, subscriptions, technological tools, and marketing experiments, etc., we cancelled or paused them all.
Prioritizing our team’s (and 3rd parties) health, we started working remotely on the 12th of March. A month later we decided we would remain 100% remote forever. Thanks to the nature of our global operations, and our two former offices in Mexico City and Mallorca, transition was an easy step.
If you’d like to know how to go completely remote, make sure you check our definite guide to remote work.
In early March we started working on improving our income flow. We started asking for 20% – 30% of the ongoing work or simply a deposit for future events. We made some adjustments to our payment polices in order to improve our income during and after the pandemic
After the reaction phase, the time for trying and learning to evolve started.
First we converted to digital operations. We piloted our open to public and private for clients events as video conferences. After 3 weeks of trial and error we were able to show and demonstrate the real value to our customers. We invited them to our open events, and after witnessing the energy, engagement and impact, many decided to go digital and the results have been astonishing.
Then, the moment to define our strategy and objectives arrived, and although these were just temporary, they gave the team clarity about their activities.
To resume our strategy was about “buying time”, this was, to accept the uncertainty and focus on extending the runway. For this, we launched two potential extra income sources: sponsorships and a digital subscription with content and experiences.
We defined three main objectives and things to protect: our organizational culture, our salaries, and our capabilities to generate revenue.
For this, we asked for a loan, and had a transparent conversation with the team to propose a 30% reduction of our salaries (mine to the 50%), instead of firing people. With this action, we would be able to keep up with the payroll until August, and together we would find ways to raise our income and extend that deadline.
Banks were not granting credit (and in general, not a single dime) to SMEs for the next 3 months. That’s why we had to go for a loan with almost double the interest rate, and had to adjust our projections taking into account that additional cost.
Once we had secured financial clarity until August, we dedicated ourselves to generate new income sources. We created four innovation labs with 4 clear goals: to validate our digital events, until we had the same in-situ event satisfaction, to validate the scalability of our new digital subscription project (thank you those who have already joined, by the way), to find new digital content and video formats to generate more engagement, and to identify local Fuckup Nights organizer’s innovative ideas and scale them globally.
Today we’re proud and happy, because thanks to our culture and the whole team’s coolness, our initiatives are valid, and in the last 7 weeks, we have extended our runway until December. We’re still expecting the worse to come: recession, but we’re feeling more united, efficient and capable to overcome it than ever.
Our purpose is to share experiences and knowledge to help people live their lives to the fullest. We know we’re going through difficult times, and that’s why we wanted to share this experience with you, we hope you find it useful. Let’s keep moving forward and inspiring people together, once again, thank you for being part of this new platform.
Fuckup Nights CEO
Pepe Villatoro is a globally awarded serial entrepreneur. He has created 5 companies, and was the WeWork Director for Latin North America. Currently, he is the co-founder and CEO of Fuckup Nights, a movement present in 330 cities in 90 countries, and collaborates with governments and companies to help create a shift in mindset. He loves travel, a good meal, and good conversations.