Virus Hits Startups Trying to Pitch at Giant Mobile Conference

(Bloomberg) -- While tech giants are canceling plans to attend Barcelona’s Mobile World Congress this month, smaller firms don’t see it as an option.

The show, which draws more than 100,000 attendees from around the world, is a critical meeting place for founders looking to attract new investors or cement manufacturing deals. Big name dropouts from the conference this year are stacking up: Facebook Inc. and Cisco Systems Inc. on Tuesday joined Intel Corp., MediaTek Inc., Ericsson AB, Sony Corp. and others in saying they’d canceled plans to attend the show.

U.K.-based FX Technology, which sells a smartphone with a slide-out physical keyboard, was relying on MWC to help it win publicity after recent news that BlackBerry-branded devices may no longer be manufactured.

“We’re also fundraising so it’s important to meet potential investors and distributors,” said Adrian Li Mow Ching, co-founder of FX Technology. “We’re making every effort to go still.”

Read More: Top Mobile Conference Nears Cancellation Due to Coronavirus

Unlike their smaller rivals, larger exhibitors are aided by their ability to generate their own news away from MWC. Samsung Electronics Co. unveiled its new flagship phones at simultaneous events in San Francisco and London this week, well ahead of the Barcelona gathering.

Some, including Sony, said instead they’ll launch their latest products via internet livestreams. Video-calling potential investors or distributors remains “our contingency plan,” Ching said.

Robert Vis, chief executive officer of enterprise communications startup MessageBird, said MWC is “super important” as networking at the show “fundamentally drives our business.”

The Amsterdam-based company competes with the likes of Twilio Inc., helping firms chat with customers via messaging apps, SMS and calls. To make this happen, Vis said MessageBird needs to forge and maintain thousands of relationships with businesses, software companies and mobile carriers.

“I founded the company in 2011 and we used to go with three people and run 20 meetings a day,” he said. This year he’d expected to take 40 people and hold about 500 meetings, before deciding Wednesday to pull out.

“We’re a 200 million-euro ($218 million) business and this is the event of the year from a carrier perspective,” he said. “But we just don’t want to take any risk in terms of our employee safety.”

The GSMA, which organizes MWC, confirmed as recently as Wednesday that the event is still going ahead.

If it doesn’t, there are travel, accommodation, exhibition booths and entertainment costs deep-pocketed tech companies can afford to absorb in ways startups can’t always.

MessageBird’s booth costs about 750,000 euros, in addition to travel and accommodation. But, Vis said, employee safety was more important than the numbers.

Less Competition

Even before the virus scare, big companies globally have begun looking for ways to generate buzz for their products without hitting the conference circuit.

Sony, the world’s biggest console maker, skipped last year’s E3 video-game conference for the first time in almost a quarter-century. It said at the time it would focus on “exploring new and familiar ways to engage our community” instead.

IDC analyst Raquel de Condado Marques said that large companies, such as Samsung Electronics Co., could ultimately benefit if MWC was halted.

“Smaller vendors that were planning to launch their phones at MWC were counting on the visibility they could earn,” she said. “Therefore, Samsung will benefit from the fact that some of its competitors will lose the spotlight that MWC could potentially cast on them.”

ShowStoppers, a popular companion event to MWC and other tech conferences, such as the annual Consumer Electronics Show in Las Vegas, gives smaller companies an opportunity to meet industry insiders and journalists at evening networking events.

Many smaller companies take booths at these evening gatherings, which draw hundreds of industry insiders and journalists with promises of early access to cool tech from the main show, peppered with food, drinks and networking.

On Tuesday, its organizer, Steve Leon, said the event was still planned to go ahead.

“ShowStoppers continues to monitor news and will follow health and safety advisories from the World Health Organization, Spanish authorities, GSMA, airlines and other organizations, and the Chinese and other governments,” he wrote in an email to attendees.

--With assistance from Vlad Savov.

To contact the reporter on this story: Nate Lanxon in London at nlanxon@bloomberg.net

To contact the editor responsible for this story: Giles Turner at gturner35@bloomberg.net

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