That small, grass-roots event — which drew 700 people its inaugural year — has since mushroomed into SXSW, one of the largest and most influential gatherings on the planet. The interactive/film/music citywide party, which starts Friday and runs nine days, is likely to draw more than 70,000 enthusiasts to Austin, fill up every hotel room in the city and showcase appearances by Chelsea Clinton and Soundgarden, as well as former National Security Agency contractor Edward Snowden of government surveillance fame and WikiLeaks founder Julian Assange (both via satellite from undisclosed locations).
Swenson, an Austin native who dropped out of the University of Texas to "pursue a degree in rock 'n' roll," says he always thought his small musical gathering could grow into something meaningful. But he never imagined the heights it would reach.
"When we started planning, we had pretty modest goals," says Swenson, now 57, who still oversees the conference as its managing director. "If we could get 150 people to attend, we'd be happy. … Then it just kept growing."
And growing and growing. Now in its 27th year, SXSW — the name is a play on the classic Hitchcock thriller North by Northwest — has helped connect Internet start-ups with more than $500 million in funding, launched the careers of filmmakers like Lena Dunham, creator and star of the HBO hit show Girls, and pours more than $200 million a year into the local economy.
Across Austin, musical acts both known and unknown cram into nightclubs for all-day, all-night jam sessions, as movie stars mingle with mobile moguls. Prince closed out last year's festival with a late-night show at a downtown club. This year, the iTunes Festival will make its U.S. debut during SXSW with a free, five-day concert featuring Coldplay and Willie Nelson, among others.
As if SXSW weren't enough, the conference has spawned siblings, including SXSWedu, a four-day symposium focusing on education issues, and SXSW V2V, a Las Vegas-based event focused on start-ups. More are in the works.
"The reason we exist today is because we launched at SXSW," says Praneeth Patlola, chief executive and founder of Jobhuk.com, an online marketplace for the staffing industry. "It's the best platform in the country for tech start-ups."
What makes SXSW so popular? For starters, it's one of the few conferences offering three distinct themes — interactive, film and music — all in one place, says Kelly Peacy, a senior vice president with the Professional Convention Management Association, a Chicago-based industry group with 6,000 members. The gathering's success hinges on its ability to allow attendees from each field to interact with one another, connecting techies with film producers and musicians, she says.
"Many conferences and conventions are one speaker, one thing for many people," Peacy says. "At SXSW, they're much more about figuring out how to get people to talk to each other and learn from each other. … That's unusual in a conference, absolutely."
New York filmmaker Gary Hustwit has been attending SXSW for more than two decades, first as a music enthusiast and later for the films. In 2007, he returned to SXSW for the world premiere of his film Helvetica. Positive reviews sizzled through social media and launched his film career. He returned two years later with the premiere of his next film, Objectified.
"There's nothing like SXSW," Hustwit says. "There's that cross-pollination between people making the content and people who are distributing that content and getting it out via the Web. It's a great chance for all these worlds to come together."
That wasn't always the case. After a few years of putting on music seminars and shows, SXSW organizers in 1994 decided to add a multimedia section, to explore the still nascent Internet, and a film! section,! to showcase local filmmakers, Swenson says. Hugh Forrest, who was hired by SXSW because he was one of the few at the time with a computer, a Macintosh Plus, was put in charge of the multimedia section.
The first multimedia event showcased the wonders of CD-ROM and featured an "Internet Theater," housed in a tent on the lawn of a downtown hotel, to show attendees how to access the Web, says Forrest, who still runs the interactive side of the conference.
In its first year, around 300 attendees signed up for the multimedia sessions. Organizers struggled with the conference's direction and drawing participants. It survived on the back of the music side which, at the time, was a much bigger draw, Forrest says.
"We had some lean years," he adds. "We had a very hard time finding our voice."
More turbulence followed, including the tech-bubble pop of 1999 and the 9/11 terrorist attacks two years later, which caused attendance to dwindle, Swenson says. "There was a period of time people just didn't want to travel," he says.
Then came the "Twitter moment." Having officially launched nine months earlier, Twitter execs attended the 2007 SXSW, setting up flat-screen TVs in the hallways of the conference displaying their start-up's features, Forrest recalls. It became an instant sensation, morphing into one of the most popular and valuable start-ups in history.
Two years later, Foursquare, a location-based social networking site, also shot to superstardom at SXSW. Attendees began pouring in, hoping their online idea could become the Next Big Thing. Last year, 30,000 participants attended the interactive side alone.
"Twitter really kicked everything into high gear," Swenson says.
But as the conference grows and swells with million-dollar marketing budgets from corporate sponsors, it's becoming increasingly difficult to get discovered, some tech entrepreneurs say.
Jared Hecht, co-founder of Fundera, an online marketplace for small-business loans, has been going to S! XSW since! 2010, first with micro-blogging platform Tumblr and later representing GroupMe.com, a mobile group-messaging app. In the ensuing years, a barrage of corporate messaging, parties and other new companies have made it tough for start-ups to get noticed, he says.
"It used to be a very unique opportunity for start-ups. It's not so much anymore," Hecht says. "It's a big event, and there are a lot of things going on. It's very, very difficult for a start-up to rise above the fold and get noticed."
That the conference is getting too big is a criticism Swenson has heard from the gathering's infancy — from local residents unhappy with the traffic snarls, from local bands trying to get discovered, from start-ups hoping for their Twitter moment.
Each Saturday leading up to the start of the conference, Swenson gathers in a conference room with managers and volunteers to discuss the upcoming event. He holds up a copy of the local newspaper, the Austin American-Statesman, with a front-page headline about SXSW that reads, "How Big Is Too Big?" The year: 1989.
The criticism didn't stop him then and it won't now. There's talk of creating two new subconferences, one focusing on medical technology and another on space exploration, he says. The once-small music festival continues to grow.
"That's by design," Swenson said. "If SXSW doesn't keep changing and evolving, it will wither and die."
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