This. SXSW can be an incredible time. Even if you're promoting a startup, music and film are great.
Austin is gorgeous this time of year. (except last year for the several days) You can wake up and sit in the yard at 9am in shorts and a t-shirt.
I've done SXSW by sleeping on floors, having a company pay for expensive dinners and lodgings and using startup capital to cooperatively rent a house as well.
You can learn a lot of great tricks there, such as how to get into events without a ticket. For example, last year I was able to quickly meet and join some vip's to catch A$AP Rocky on the spotify roof party. That won't happen again.
Also, they are kind of tired now but Fun. played the relatively small icanhaz party months before they were on repeat on the radio. Reptar did a tiny free show they only announced on their FB page behind a bar in the sun. You can feel the energy in crowds at shows at SXSW and they are very cool and tuned in.
You can also make key introductions. We learned about an event critical to our startup that ultimately led to a pitch competition and an award and publicity. We also met the fellow who helped us with our banking partner there.
The press from this year about how startups aren't putting capital there is good. If you don't have the traction already, you're unlikely to get it out there. And if you haven't raised a solid amount of money yet, you should be making it last. But people should still go!
Notice, I haven't said anything about actually attending the conference.
Sitting at home working on code, going over customer feedback is no substitute, nor necessarily a better use of time and money.