Dealing with a large competitor that intimidates your customers
Norm Brodsky is a veteran entrepreneur.
Dear Norm, Trade shows are notorious for the ridiculously high prices exhibitors are forced to pay for basic services. My business partner and I saw an opportunity to provide Internet access at trade shows for a fraction of what the in-house providers charge. Although they assert an exclusive right to provide the service, such claims are in blatant violation of FCC rules intended to foster competition and protect consumers. The major player in the industry is attempting to intimidate us, our customers, and our partners. We have filed a complaint with the FCC and are preparing a white paper to inform exhibitors of their right to buy Internet service from anyone they please. What is the best way to deal with this bully?
Seth Burstein Co-founder, Trade Show Internet San Francisco, CA
Anyone who has ever exhibited at a major trade show knows exactly what Seth Burstein is referring to. The rules are ridiculous and the fees outrageous, but if you don't go along with them, you'll face warnings and threats, and your exhibit could even be shut down. So, can you force the powers that be to change their ways without becoming a martyr?
In Seth's case, unfortunately, I think the answer is no. It would cost him hundreds of thousands of dollars to fight the issue in court. Even if he won, he'd succeed only in opening up the market for a slew of competitors. I also thought he was wasting his time doing a white paper. Exhibitors are being forced to overpay for services by thousands of dollars. As much as they may resent the high price of authorized Internet access, it's chicken feed compared with all the other costs. They aren't going to risk being thrown out of the trade show by insisting on buying access from Seth's company.
That said, Seth and his partner aren't about to quit, nor should they. But there are other ways to fight the battle. For example, exhibitors generally can't be required to rent the service from the authorized vendor if they own an Internet access kit that allows them to connect to a remote wireless service provider. Up to now, Seth's company has been renting kits to customers. Maybe he could figure out a way to transfer ownership to them for the duration of the show. Or maybe the company could focus its marketing efforts on smaller trade shows at hotels, where it is likely to encounter less resistance than it does at the giant shows. The point is that Seth and his partner need to stay focused on their real goal, which is to build a viable business, not to change the way trade shows are managed. They can do that later—after they've made their fortunes—if they still want to.
Please send all questions to AskNorm@inc.com. Norm Brodsky is a veteran entrepreneur. His co-author is editor-at-large Bo Burlingham. Their book, The Knack, is now available in paperback under the title Street Smarts: An All-Purpose Tool Kit for Entrepreneurs.