A ‘Car Wreck’ Puts the Business of Bringing People Together on Hold


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As the coronavirus spread across the United States last month, conferences large and small were quick to cancel. There was one notable exception.

South by Southwest, the music, film and technology conference that attracts more than a hundred thousand people annually, was just days away from starting in Austin, Texas. Though many attendees were asking organizers to call it off, they declined to do so. In the end, the City of Austin made the decision to cancel SXSW.

Roland Swenson, the conference’s chief executive, said shutting down was such a monumental decision — one that would affect thousands of businesses in Austin — that he needed the government to make it. And with social-distancing guidelines going into place and large crowds becoming public health hazards, there was no other choice.

While SXSW was being called off for the first time in its 34-year history, the Riveter, a co-working start-up that focuses on women, was making its own tough decisions. The Riveter has its headquarters in Seattle and nine spaces around the country, meaning Amy Nelson, the founder and chief executive, had to balance the needs of her tenants against the safety of her employees and members. In the end, she decided to leave the spaces open to essential workers and increase cleaning, but remove her staff.

Together, the experiences of Mr. Swenson and Ms. Nelson illustrate the profound challenges facing businesses that rely on getting people together. Both chief executives believe their companies will survive. But with the future of live events and office life deeply uncertain, they are exploring new ways of bringing their communities together online.

This conversation, which was condensed and edited for clarity, was the first in a series of new live Corner Office calls discussing the crisis. Visit timesevents.nytimes.com to join upcoming calls.

DAVID GELLES South by Southwest draws more than 150,000 people to Austin each year for weeks of concerts, films and technology. This year you were literally setting up the show when the coronavirus began its aggressive spread across the United States. Roland, walk us through those few weeks in March as you went from business as usual to a fully canceled slate of events.

ROLAND SWENSON We were sure that everything was going to be fine and we’ll be able to do the event. Even on Thursday before we canceled, there was a story in the local paper saying, “Canceling South by Southwest won’t make us safer from coronavirus.”

Then we went down for a meeting at City Hall, and they told us: “OK, you’re being canceled. And there’s a press conference going on right now.” That’s when it all became extremely real for us. We just had to spring into action and try to start picking up the pieces as fast as we could.

GELLES Even before that, some participants were calling on you to proactively make the decision before the city did it itself. How you were weighing the calls of your community against what you were hearing from the city?

SWENSON By the time the calls for us to quit were intensifying, we had begun to come to grasp with the fact that the show wasn’t going to happen. But the main thing was our community. We took $350 million off the table for all of these small businesses in Austin. If we had just acted on our own, I think there would have been a riot outside of our office.

We needed the authority of the mayor to step up and say: “OK, game over. Everybody, go home.” If we had said it, there would have been days of people saying, “Well, we’re going to do it without you,” and stuff like that. And we were trying to keep everybody unified and heading in the same direction.

GELLES Amy, you’re based in Seattle, and you had a front-row seat to this crisis much earlier than many of us in the country. What were those first few weeks like for you?

AMY NELSON It was very clear early on that it wouldn’t be isolated to just Seattle, and that we had to think about it in terms of its national scope.

We had just finished our year forecast and we were well on our way to a great 12 months, and then this came and we knew we had to deal with it pretty quickly. I worked very closely with my board, and one of my investors kind of looked at me when coronavirus came to Seattle and said, “If you don’t finish a re-forecast and figure out a plan within a week, you’re not doing your job.”

I took that to my team, and there were a couple of questions. First, how do we protect our teammates and our members? Because the Riveter does have these physical spaces around the country. And then, second, how do we protect the business? How do we make sure that we create a viable plan to steer through what will be a year of massive uncertainty and a lot of grief?

So we set out to look at those various things pretty quickly. We worked to close our financing. And I said I don’t want to send our headquarters staff home until we take the spaces to an unstaffed position, because everyone at this company deserves to be treated the same way. So we made the decision on March 13 that we would take the spaces to unstaffed. We left them available to essential workers who have offices or dedicated desks in our spaces, and others who needed that space.

We also made the decision at that moment that we would take whatever action we were taking across the country all at once. We have spaces in Minnesota, in Texas, in Colorado, and we acted far before most of those states put shelter in place on the table. And the other thing we set out to do was to shore up the business. Venture-backed companies, which we are, a part of our mandate is to scale. And so oftentimes we’re growing aggressively, but here we decided, “OK, what do we need to do to cut our costs to get through?” We’re obviously going to lose revenue, and so we moved really quickly on that front as well.

GELLES Roland, can you give us just some granular understanding of what it took to cancel South by Southwest at the very last minute?

SWENSON It was more like a car wreck than just slowing down and stopping. The first thing we did was let all the acts know, the musical acts, let all the filmmakers know, let all the speakers know, and then we started into canceling all the contracts that we could and negotiating settlements with the ones that we couldn’t. And then we had to decide what to do with the staff. And we finally told everybody relatively early that “OK, if you’re worried about this, you can work from home.”

GELLES What kind of shape has this left South by Southwest in? Will you be able to survive?

SWENSON Well, once we looked at the forecast, it was pretty grim, and it showed us running out of cash within a couple of months. We had to make the tough choice of laying off a bunch of people, and that was very painful. That gave us enough breathing room to start looking for other investment.

The way things are right now, we basically have enough money to get to the next event if nothing else goes wrong. But we’re in active discussions with potential partners.

GELLES Amy, what steps have you taken to try to make sure the Riveter is a going concern for the next year and beyond?

NELSON We put 34 percent of our staff on standby, which is another word for furlough. It was the hardest day I’ve had as a C.E.O. And one of the hardest things about it is that it came so unexpectedly. Two weeks before, we were beating our projections. And two weeks later, you’re facing this really painful decision that is going to impact real people that have helped you build a business.

And I have nine leases across the country, and there isn’t anything setting out that landlords need to give their tenants any relief. So I’ve been in conversations with all of my landlords seeking deferment or abatement to see how we get through this year.

GELLES What discounts are you giving to tenants and members?

NELSON We made an initial decision to give 50 percent off across the board to all of our thousands of members for the month of April, and then we said if the shelter in place continues in May, we’ll make another move. So we did that because we knew that everybody was hurting. A lot of our members are small businesses, and we want them to stay and we know that they’re feeling the same effects of this that we are.

Then we also got on the phone with all of our office holders and dedicated desks to talk to them one by one to see if more relief was needed to navigate this. It’s been a really time-intensive process, but these are the people that have allowed us to have a business, and we want to keep them with us.

GELLES Roland, what do you think your industry is going to look like six months from now and a year from now?

SWENSON Everything’s going to change. I think for event promoters in the future, they’re going to have to be prepared to present a digital part of their event in real time. And I think that’s possible, but still, the human contact is really what our business is built on. The going to see movies and bands and lectures together and meeting the person in the seat next to you who might end up having a profound impact on your personal life or your business life or both. So I think if that is lost, then the world will be a poorer place.

GELLES Amy, the co-working industry has ballooned in recent years. What’s the future of this in six months, a year and even beyond that?

NELSON We don’t know what the future is going to look like. I think people will go back to the office, but I think it looks different. I think the question that people ask in the next few months as we begin to re-enter the world is: “Do I need to be at this event or at this physical place or at this conference? And am I safe?”


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