I caught up with Bharet Malhotra, senior vice president of sales at Cvent – and one of the company’s founding members – for this week’s podcast. We discussed building and selling the industry-leading platform for cloud-based event registration software, and his role in the hospitality business.
The below is an abridged version of that conversation. Malhotra speaks:
The start of Cvent and the dotcom bubble
The company started in September 1999 and I joined in 2002. I was, perhaps, one of the first six or seven people in the company when it started.
Back then in 1999, with the dotcom hype, if you held your hand out, someone would have given you money! But, in due course of time, a series of events happened including 9/11, the anthrax scare and then came the dotcom bust.
This event defined the companies that could survive and stand tall. During that time, I remember, an investor came in and told us, ‘The company that you’re becoming is very different to the company that you are today.’
We wanted to build an event registration tool or a data analytics provider – at that point, event registration was a sexy space and something along the lines of a billion dollars of venture capital money went into it – but at that point we needed focus.
There were a couple of things that we did well and the most important was sticking together. The entire original team stood together – there is a lot of value in that and it helped strengthen our relationship. We understood that we weren’t focused on any one thing – so we said, ‘Our strategy now is survival.’
What do you need to survive? You build a good product, hire great people and service your customers. Sometimes, you’ve got to stop to reflect and just do one day at a time: correct the course and set the ship sailing straight.
Every startup has got hard-working people and bright executives from successful companies, but the one thing I give ourselves credit for is we were willing to invest in the grind longer than other people – we were committed to being in this for up to seven years.
“At some point some entrepreneurs tire of eating ramen noodles”
I think a lot of starters frankly don’t fail because of execution; they fail because, at some point, some entrepreneurs get tired of eating ramen noodles for 18 months!
I’m like, ’18 months? Name one profession that you can be amazing at in 18 months!’. You can’t be a pro tennis player or musician, artist or mathematician. Why is [building a] company any different?
The move into hospitality
Back then – in 2002 – we were a one-trick pony; we had one product, event registration, and that’s where I started selling. Cvent now is a product ecosystem of two clouds: the event cloud for meeting planners and buyers, 70% of our business, and the hospitality cloud for hotels, convention visitor bureaus and destinations, 30%.
In 2008 we added the hospitality product, then we started acquiring companies and we started getting much more innovative, but our mantra is the same. We have incredible support; the people we have in our global offices are so bad-ass.
I felt that, at 22, I was a pretty smart kid; now when I have conversations with the 22-year-olds who are six months out of school, I see I was nowhere near the same business mind. That’s partly because we put a lot of emphasis on recruiting; it is a maniacal focus.
We have a huge tech team and product management team and we have 25,000 organisations that are customers, so with the amount of feedback you get from them, it’s a built-in innovation lab.
“It’s worth those risks because you don’t need all of them to work to continue taking the lead in the market”
The only deviation from our mantra is the flexibility now to be innovative and creative. If we make a mistake, it’s okay as it didn’t cost us the company; it’s a calculated mistake that may cost a few million dollars. We’re very sensitive to it but it’s worth those risks because you don’t need all of them to work to continue taking the lead in the market.
Tennis and sales
Growing up, I was a tennis fanatic and played at Duke University. I got to travel the world and became independent, and I got that competitive spirit that only tennis can teach you: if you’re losing, you have to figure out a way – you have to noodle through everything and win.
I can lose the first set, but then I get the second set. You have so much going on in your brain. No sport has that where you have two to three hours to come back. People talk of boxing but that has a corner; people talk about a 100m sprint but you can’t strategise much in nine seconds!
“I would have been very different had I been a soccer player”
After my family, tennis taught me the most about character and personality. I think I would have been very different had I been a soccer player.
Everything you do is selling: trying to win an argument with your parents, or trying to impress a friend. Selling was easy for me and I was like, ‘Why are people unable to hit the target?’. I can figure out the pain points; I know how to hone in on the pain points. I know that whichever part of life-cycle they are in, we have value.
You can’t have a bad product but you also need patience and persistence. You need to invest a hell of a lot of time building a funnel, building trust, building the value of the product. People have eight good phone calls and then they relax but that’s not what it is. I don’t care how big your month is; there’s always a next month.
Bringing the hospitality sector into this century
We launched the hospitality product in 2008, and the good thing about being a startup within an organisation is that everyone rallies around you. In year one we did 200,000 dollars in bookings; in year two (2009) we did seven million, and in year three, 14 million.
“I think we can help you gain an additional million bucks”
I love to work with the hospitality sector; it is so cool for me to sit with an executive from a hotel chain or an ownership group and share with them: ‘I think we can help you gain an additional million bucks on your top line!’.
The hospitality sector needs to do a more aggressive job of embracing technology. They are concerned that they have given so much of their leisure business away to the OTAs – that charge 10, 15, 16%.
In the meeting sector, a lot is going towards intermediaries and third parties. Once again there’s a tremendous value that they provide, but the hotels are concerned: for every dollar, ten cents goes away from the top line. As a result of these economics, I think they’ve got timid and can’t open up to innovation.
I say, ‘You have six salespeople for MICE business; how are you going to get that event from a company, on the third of a building, that only has 40 employees? They’re doing an event of 100 room nights. You’re never going to a cold-call them – you don’t even know the company exists!’
“I will be able to go online to book a 75-person meeting – a $40,000 sale”
The number one thing that I try to convey is not a product – I don’t even talk about a product – I just want them to know that even MICE is moving online. It’s not too far from today, maybe two to five years, where I will be able to go online to book a 75-person meeting – a $40,000 sale – and I don’t even have to speak to anybody.
For a repeat meeting, it’s very ‘cookie-cutter’: classroom style, pen and paper, coffee break and a simple lunch – I don’t need to send an RFP to 10 hotels. It’s painful [at the moment] and that’s because hotels are very possessive of their meeting space – that’s still the one thing that they own.
There are easy fixes – that have been developed eight years ago – to all these problems. I would advise hoteliers to go and sit inside a tech company that they respect and see how they function and make mistakes and course correct. There’s a notion that, because you’re sitting inside 100-million-dollar asset, you can’t be nimble and that’s not true.
Cutting-edge technology will make life 100 times more painless for the attendees. Yes, you need to think about the event planner, but they need to think about the attendees – with simple check-ins and name badges.
“How can it be that to get on an aeroplane is a smoother process than registering for an event?!”
Airports have become so creative that I can not see anybody and enter into the plane because I get the boarding pass on my phone and carry on a bag. How can it be that to get on an aeroplane is a smoother process than registering for an event?!
Heatmap technology is there too: I want to know that Brett spent an hour and 20 minutes in one session. If I’m a sales guy I don’t need to talk about the other eight sessions that he spent six minutes in and then walked out of.
The second highest RoI activity of any organisation after their own website is trade shows and events, so we’re in the business of not just telling people ‘Make your event much more efficient’ but ‘Do more events!’.
2019 and beyond – get the basics right
Hotels are one of the most analytical industries, with RevPAR and ADR – they have more acronyms than anybody – but there are certain basic things that they’re not doing and they don’t have to spend a penny, like bid rate.
Say a hotel gets 100 Requests for Estimation (RFEs) but only bids for 50 of them. For the other 50, the planner doesn’t even get a rate. We end up telling them, ‘Take the 50 and make it 70 – just bid on 20 more leads and I promise you you’ll win one of them.’ These are not outlandish crazy 2025 things; they are there today so embrace it!
For more information, visit cvent.com.