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March 4, 2009 9:00 AM PST

Lessons from Demo on surviving recession

by Daniel Terdiman
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PALM DESERT, Calif.--How does one measure the effects of economic meltdown?

At Demo 09 here, there are two ways, one that's obvious, yet hard to see, and another that is both obvious and visceral.

While Demo for years has featured about 65 to 70 companies, this time around there's just 39. Everybody knows that, but it's hard to actually see it. The main ballroom where Demo presentations are held is packed, with every seat at every table full. But that's an illusion: the wall at the back of the room has been pulled in dramatically from a year ago when Demo 08 had several hundred more attendees.

And no wonder. The companies that present here pay well into five figures to do so, and most bring a group of people. The registration fee for non-presenting attendees is $3,000.

In the past, Demo has received hundreds of applicants for its coveted on-stage spots. While have complained that the show's format is pay-to-play, there's no doubt been an overabundance of companies willing to pony up for the chance at the exposure the show generally nets presenters.

This year, however, word is that Demo Director Chris Shipley and her team simply didn't have enough applicants that fit its criteria to fill out the normal-sized roster. Incidentally, Shipley recently announced she was handing off her leadership responsibilities to VentureBeat CEO and editor-in-chief Matt Marshall after this year's DemoFall.

Still, just because there are fewer companies presenting here this time around, doesn't necessarily mean the quality of those taking the stage was any lower than in previous go-rounds. In fact, it's always hard to accurately judge that quality until months later, since Demo is all about showcasing companies and products that are just getting off the ground. So, since it takes time build a business, the results are often not known for months.

Spotting likely success stories
To be sure, you can tell right away that some of the companies that present here are going to do well, or are going to fail. Sometimes their presentations just wow the audience, and sometimes you can feel the discomfort in the room. This is my sixth Demo and I'd have to say that the percentage of companies in those two categories this week feels about the same as it has in the past.

Indeed, my colleague Rafe Needleman and I nominated seven products as the best of Demo, and just one worst of. With just 39 companies on hand, that's a pretty healthy percentage.

"There's a suspension of disbelief that goes into start-ups...You have to have a certain suspension of disbelief if you're going to quit your job, anger your spouse, and work 14-hour days. You have to have a certain Pollyanna vision."
--Christine Herron,
First Round Capital

Last week, I wrote a story asking the question, do we still need Demo and conferences like it when the economy is falling apart and when companies have more choices than ever to promote themselves and their products. My conclusion? We do, but only some of them. As Eric Faurot, whose TechWeb company puts on the Web 2.0 conferences, put it, "In the event business, the stronger events, the really healthy events that have a real purpose to them, will emerge stronger, and weaker events will just die. They just won't survive."

After the last company finished its presentation here, I asked Christine Herron, a principal at San Francisco-based First Round Capital, what she thought of the event, especially given the smaller size.

Herron said that size really doesn't matter that much at Demo. What matters is companies' relative health and their funding situation.

"This year, there's a lot of companies who have made it here without a big check, so that's more interesting," Herron said. "If you're a venture capitalist coming to Demo looking for undiscovered investment (opportunities)...I'd like to see companies without a big check."

The lessons of Demo
She's talking of companies that can handle the five-figure presenter's fee, as well as Demo's criteria, without having taken significant investment from a VC. Herron seemed to be suggesting that this is a sign that even in this toxic economy, there are still a number of companies that have been able to get to the stage where they are qualified to present at Demo--including paying the fee--with very low costs. And that could well be a sign that companies, albeit a limited number of them, are seeing ways to weather the recession (or depression, if it gets that bad) by more quickly and efficiently getting products and services to market than has been the case in recent years.

If so, this is good news. It seems to me that this is the only model that is going to succeed in coming years. A panel here on Monday about venture capital in the post-downturn era pointed out the obvious reality that VC investment is down significantly. Eric Tilenius of Tilenius Investments said, for example, that his firm's investments are down 67 percent and that of those that are getting money, most are companies that have already gotten at least one round of funding. The number of new companies getting VC money, he said, "has dropped precipitously."

What does this all mean? Clearly, that the salad days are over. We all thought that after the dot-com bust, only companies with viable business models could get funded. In reality, I think we saw that the lessons learned in the tech industry really had more to do with the levels of funding VCs were willing to put into companies. In the 2003 to 2007 years, as the stock market rebounded and Google millionaires started impacting real estate values throughout the Bay Area, companies could still get funded. They just weren't getting $50 million just because they had a badly-spelled URL like in the pre-2000 days.

Now, companies are still going to be getting funded, but seemingly only if they really do have a solid business model, and likely only if they've already convinced previous investors to get involved. Venture capital is only going to flow to companies that have demonstrated they know how to get to profitability without spending a fortune and without needing to be propped up because they don't have any revenue.

In that regard, then, Demo looks like it could well be an interesting barometer of the state of the (technology) economy. Some companies will succeed. Many will fail. And those trying to make it are going to need to keep their eyes seriously on the prize, even as the grim reaper circles around.

"There's a suspension of disbelief that goes into start-ups," said Herron. "You have to have a certain suspension of disbelief if you're going to quit your job, anger your spouse, and work 14-hour days. You have to have a certain Pollyanna vision."

March 3, 2009 9:43 AM PST

Purewire shows off Web reputation system

by Daniel Terdiman
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At Demo 09, Purewire presented its Trust service, a Web-based system that aims to add a reputation system to people and places.

(Credit: Purewire)

PALM DESERT, Calif.--If you've spent any time online, you've almost certainly found yourself wondering about the trustworthiness of the people and Web sites you encounter every day.

Already, individuals are often rated on many sites, like Slashdot or eBay. But it can be difficult to easily discover whether you can trust what you come across, regardless of where you go online.

That's where a company called Purewire and its Trust service come into play. The service, which Purewire announced Tuesday here at Demo 09, is intended to give people a way to quickly and simply see whether they can feel safe dealing with others online, visiting certain sites, and buying items on auction sites, Craigslist or others.

If Purewire Trust gets a critical mass of users, it could be very effective. But that does present a classic chicken-and-egg problem.

(Credit: Purewire)

Essentially, Purewire Trust is an across-the-board reputation system that collects intelligence about a wide range of people and sites based on the wisdom of the so-called crowds. It's designed to track and monitor behavior, looking for patterns and reporting back what seems like fairly straightforward and easy to understand trust metrics.

As an example, Purewire CTO Paul Judge said the system could be used for things like someone wanting to buy something on Craigslist, for a parent wanting to be sure that his or her kid's friends are safe, or for a college admission officer wanting to know more about an applicant.

Similarly, Purewire Trust could be used to get more information about the reputation of someone who makes a Facebook friend request. By clicking through, a user can see how others have rated the Facebook requester--whether that person is trusted, untrusted, or has some negative ratings, but is largely viewed positively. With that information in hand, Judge suggested, people can make more informed choices about who they interact with.

The same idea can be applied to a seller, say, on Craigslist. Before buying something, a user can look and see if others have had experiences with the seller, and if so, how they're viewed.

This is basically a broad version of the eBay ratings system, but not owned by any specific site. It can be used not just to check on other people, but also on whether Web sites are considered safe--as in whether they contain malware or viruses, all without needing any external software.

It seems like this could be a very useful system, but like so many collaborative intelligence types of systems, it really requires a critical mass of users' participation before it becomes effective. And that creates a chicken-and-egg problem: without the users, others won't get involved. And so forth.

But if Purewire finds itself with a large number of users, then it could be something that provides the intelligence that is sorely missing across the broader Internet, and that would only be a good thing.

March 2, 2009 2:54 PM PST

New products, services for mobile devices at Demo

by Daniel Terdiman
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Asurion Mobile AddressBook lets Android users add new context to their traditional contacts list. The application was one of several for mobile devices on display at Demo 09.

(Credit: Asurion Mobile Applications)

PALM DESERT, Calif.--Last September, at DemoFall, I wrote that the most obvious trend in evidence at the technology showcase confab was the prevalence of iPhone apps. It seemed that at least a couple of dozen of the 72 companies at that show were putting at least part of their product offering on Apple's hit device.

Here at Demo 09, I figured that that ratio would jump, or at least stay about the same. But everything is smaller this time around--just 39 companies are presenting, for example, and there are hundreds fewer attendees--and as far as I can tell, the iPhone is hardly the hot platform.

Still, there are a number of companies who have turned to the iPhone--or other mobile devices--as the basis of their offerings. And in fact, a number of them have been grouped together into an afternoon session called "iLove my iPhone." But despite that title, only a few of them actually had dedicated iPhone apps.

Nevertheless, the companies grouped into this session--Coveroo, Promptu Systems, HAM-IT, Asurion Mobile Applications, bluBuzz and Skout--have some pretty interesting technology and services going on. How many of them will last is certainly unknown, but that's no different than any other product category at Demo or elsewhere in the tech business.

Maybe the most interesting of these applications, Asurion Mobile AddressBook, isn't actually available (yet) for the iPhone. For now, it's only on Android. As an iPhone user, though, I can still appreciate Android apps, especially ones that are smart and provide some all-new functionality.

The Mobile AddressBook is a cool app that brings a lot of fresh context to the staid list of names and phone numbers with which all of us are so familiar. Now, Android users will be able to link directly to the Flickr photo sets, Facebook pages, and Twitter feeds of those in their contact lists.

That's pretty cool--being able to go directly from the address book to, say, a friend's Flickr photos. But what's even better is that Asurion is making available an open API that will allow third-party developers to link other social tools to the contact list. That can be almost anything you can imagine. In addition, there will be what are called "smart contacts" for companies like airlines. So, you could have Southwest Airlines in your contact list, and click straight through from there to see upcoming itineraries or your account information.

Of course, Palm's Pre is built around much the same functionality--but as an Android app, and perhaps for iPhone later, this allows someone to get these features without having to dedicate themselves to Palm's new phone.

Another very interesting app on display is Skout, a social-dating service for a multitude of platforms, including the iPhone.

Skout requires users to sign up, but once they do, anyone using a compatible phone--the service requires GPS--will be able to see other members who are somewhere nearby. And for each person that pops up, you can see how far away they are and their profile and add them to a friends list.

Skout has an iPhone app that lets people flirt with any other user of the service that are nearby. It utilizes GPS to determine who is nearby, and has social networking features that combine well with more traditional dating service tools.

(Credit: Skout)

Whether this will actually help anyone find love is unknown, but the idea is interesting. There have certainly been plenty of mobile social applications in the past--remember Dodgeball? But by making this an opt-in system and combining GPS, this quickly becomes perhaps the most advanced such app I've ever heard of.

The next notable iPhone app was Promptu Systems' ShoutOut, a voice-to SMS system for the platform. This is pretty simple--it does just what it sounds like: it converts spoken phrases to text, which can then be sent out as a text message.

You might ask why you'd want to use such a system, but then think about how often you might want to send someone a text message while driving, and how unsafe doing that can be. In this case, you could simply hold the iPhone up to your mouth, say what you want to say, and then have the ShoutOut technology convert your words to text, which you can edit if necessary, and then send off.

I wonder how popular this will be, but given how dangerous it is to text and drive, I'm hopeful that something like this will become popular, since there's very little chance that drivers are going to stop trying to communicate just because they're behind the wheel.

And, ShoutOut does the same voice to text translation for Twitter, meaning that you can send a tweet from your iPhone without having to type it in.

A much more physical modification of your mobile device is Coveroo's laser-etching service.

This is just what it sounds like: A system that allows you to have an image etched on to the back of your device, be it an iPhone, a BlackBerry, an iPod or one of dozens of others. The company has a collection of more than 200 licensed images--from, say, "The Simpsons"--and it can also work with any custom image sent to it.

I've written about laser-etching services before; as a consumer-facing business, this started with Adafruit Laser Services, a New York company that would etch any laptop, iPod, or cell phone. And in many ways, what Coveroo is doing is not that much different.

Coveroo laptop cover

In addition to selling personalized cell phone covers, Coveroo will soon offer custom-engraved laptops, as well.

(Credit: Coveroo)

But in some ways, it is. In particular, the licensed images gives Coveroo the ability to attract customers with very popular movie or TV show characters. In addition, the company is also hoping to license its technology to retailers in the hopes that places like Best Buy or mobile phone retailers will offer etching services to customers right when they're buying their devices.

Further, Coveroo is serving as a reseller of some devices, in the sense that customers can order a new phone, have it etched, and then sent to them.

At $10 to $50, this seems like an inexpensive (especially at the lower end) way to personalize a mobile device, or even protect it against theft.

A couple of mobile applications on display here at Demo I'm not so sure about are bluBuzz's Bluetooth advertising platform and HAM-IT's own customer and service provider matching service.

BluBuzz has built a system that allows companies to reach out to mobile device owners with instant offers--via Bluetooth. The idea is that for anyone who has signed up with the service, a special offer from a business is just a ping away. The location-aware technology can put out a signal that travels up to 1,000 feet. So, if, say, an ice-cream shop has a special flavor today, it can push out an ad to anyone in the area who has signed up for BluBuzz--who will then have the offer appear on their device.

It's an interesting idea, but I'm not sure how many people will sign up. Further, I can imagine it being somewhat annoying to have offers popping up on my phone from time to time, though the company promises that it will be unintrusive. Still, I remain skeptical.

Lastly, HAM-IT has built a system that matches service providers with customers looking for specific kinds of services. It's mainly not a mobile application, but does have a mobile component that will allow someone on, say, an iPhone, to say they're looking for an accountant in Boston, and any accountants in that city who use HAM-IT will offer up their business.

This seems like a service that few people will use on their devices, and I can't really see it being successful. It may be better on the Web, but in focusing on the mobile side of things, this looks less than essential to me.

March 2, 2009 11:11 AM PST

In search of a greener conference (and products)

by Daniel Terdiman
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PALM DESERT, Calif.--If you've been to a trade show in the last few years, you've probably seen some egregious examples of waste: freebie bags stuffed to the gills with literature that is guaranteed to be thrown away; slick, glossy programs; and no hint of post-consumer paper in sight.

At Demo 09 here, however, I saw some encouraging signs that conference organizers interested in improving their green cred might want to copy.

In the past, Demo has always filled its goodie bag with one of those slick, thick, bound conference programs. It's certainly useful during the event, but afterward it becomes just another to throwout--hopefully into recycling, but probably not in most cases. The same went for the various magazines and other literature that filled the bag, and even the bag itself.

At Demo 09, attendees got a conference program that seems to have been printed on a standard laser printer. This is just one step towards a greener conference.

(Credit: Daniel Terdiman/CNET News)

At other shows, this can be even worse. I've talked to conference organizers about this and they've basically thrown their hands up, saying that they are aware of how much waste the materials attendees get present, but that because sponsors insist their literature or other materials are included, there's little that can be done to cut down on the endless piles of paper, mint tins, bad pens, and other nonsense that is handed out at each and every confab.

Here at Demo this week, however, it seems that green is in. For starters, the formerly slick, bound program has been replaced by one that looks like it was printed on a standard laser printer and then stapled together. Much better, in my opinion, though I admit that it feels a little informal.

But I'm more than happy to deal with informality in order to cut down on the waste factor. And while they could have used a photocopier instead of a printer (in order to double-side the program), this is definitely a step in the right direction.

Other green innovations for the conference include more post-consumer materials in the goodie bag, and the bag itself is something attendees can hold on to and add to their collection of bags to use when grocery shopping back home. There was one glossy, high-quality magazine in the bag, however, so there's room for more improvement.

"It's not easy being green," said Demo director Chris Shipley. "But we're trying, maybe you've seen that in the conference materials."

Shipley said that Demo is offsetting 1,000 tons of CO2 emissions, enough to cover the carbon cost of powering the show, as well as much of the attendees' travel to and from Palm Desert. This is all good news, and something I'm happy to see, and I hope this is going to become the norm across the conference industry.

To bolster the green argument, Shipley then introduced the German company, eFormic, which has developed an interesting and impressive concept: the CO2-neutral label.

This is something I hope we start to see on packaging throughout the consumer goods industry. The label, which eFormic showed on the back of an orange juice container, has a code unique to a product that can then be entered on eFormic's Web site in order to get a host of information about the carbon cost of the production of the product.

CO2code, from eFormic, gives companies a way to inform the public about the carbon cost of the products they make.

(Credit: eFormic)

By entering the code for, say, the orange juice, it is possible to see exactly how much CO2 was needed to make the product. The juice was responsible for seven ounces of CO2. But the eFormic site also then showcases what climate-improvement project can be joined in order to offset the carbon cost of producing the product. Visitors to the site can see, among other things, a Google map showing the location of such offset projects, as well as pictures of them.

Clearly, eFormic sees this as a value-add that companies looking to come across as greener than their competitors will put on their products. The benefits? Building costumer relationships and marketing opportunities, and giving companies a chance to enhance the public's perception of their social responsibility, eFormic argues.

And because everyone is cost-conscious these days, eFormic also argues that the cost of getting involved in this form of ecoconsciousness is inexpensive: as little as two cents per unit.

This is very good news, and I'm hopeful we'll start to see this kind of labeling (and the adjunct corporate attention to offsetting CO2 production) be as ubiquitous as the nutrition labeling on food products in the United States.

And as there is more and more green consciousness, I hope that we'll also see more conferences work to improve their efforts to cut down on the impact on the environment. We do have power to affect change, and if we work hard enough and fast enough, we may be able to turn things around and start to really address global warming.

March 2, 2009 9:46 AM PST

Simple online disaster communications using RallyPoint

by Daniel Terdiman
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PALM DESERT, Calif.--If a major earthquake hits San Francisco, where CBS Interactive (CNET News' parent) is based, how would everyone in the company communicate with each other in the aftermath?

If the folks at Transformyx, a Baton Rouge, La., company, have anything to say about it, we'd all be using their technology, an online service called RallyPoint.

The idea behind the service is to make it possible for everyone in an organization to stay in touch with each other and to get all the relevant information they need after any kind of significant disaster strikes, be it an earthquake, a tornado, a flood or anything else.

Being from Louisiana, Transformyx was inspired to create RallyPoint by 2005's Hurricane Katrina. But the lessons learned in that crisis were that companies need to be able to get their employees--especially managers--as much information as possible about what's going on, both with the people involved, and with any mission-critical data.

Transformyx, which presented Monday morning at Demo 09, is positioning RallyPoint as the first end-to-end crisis recovery and communications system. The idea is that by using the online system, anyone in a company affected by a disaster can get simple access to whatever he or she needs to ensure that everyone is accounted for, and to disseminate communications to relevant people.

The service is designed to handle a wide range of data: text, voice, video, and even communications from government agencies.

In any company using RallyPoint, all employees would be given a card they can carry around that provides instructions on how to use the system, meaning that no one has to memorize instructions. That's important given that in a crisis, people are often unable to remember even the most mundane details of their lives.

The system provides employees with a way to check in, notifying managers of their whereabouts, and similarly, gives those managers all the information they need to know about the discrete group of people they're responsible for. Employees and managers alike can upload messages to the system. Managers using the system can use up to 1GB of storage for documents or video.

Like many Web-based services, RallyPoint has a dashboard interface, and one of the things managers handling a crisis will like is that that interface shows the real-time status of their employees, and even a map showing their locations.

Furthermore, any two members using the system can communicate with each other once they've signed in, meaning that no one has to remember any phone numbers or any other ways to get in touch with each other.

Certainly, this system seems valuable, though it obviously relies on everyone using it to have power and Internet access. In a real disaster, like a Katrina-level hurricane or a major earthquake, that kind of access may not be available.

Still, communications are often available even in a crisis, and even when power disappears. And with most people using laptops, it's likely that people would have enough battery life to at least log in to the system.

What would be nice to see with RallyPoint is a personal widget, allowing family members to use it for their own purposes as well.

March 2, 2009 9:19 AM PST

BitGravity shows off inexpensive HD live-streaming

by Daniel Terdiman
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PALM DESERT, CALIF.--Why would a church live-stream in HD?

That's a question that BitGravity--which was the first to present Monday morning here at Demo 09--wants to answer.

Of course, churches live-streaming is only the tip of the iceberg for Burlingame, Calif.-based BitGravity. The company is likely to be putting most of its energy into selling its technology--which can put an HD stream (or standard-def, of course) on the Web with a delay of just seconds--to media firms, such as TV networks, that want a way to put their content online inexpensively and efficiently.

"Next month, we're going to deliver a product that we believe is truly stunning," Bit Gravity CEO Perry Wu said. "Who wouldn't want a higher clarity picture?"

During his presentation, Wu showed off a stream that the company had set up from its headquarters and which it was controlling remotely. And indeed, Wu and a co-presenter were able to change the stream easily and seamlessly--and with an apparent delay of mere seconds.

Wu said the HD-quality stream can be sent at 1.5 megabits per second, all with no client download. That means for any stream, anyone can watch anywhere on the Internet, which is certainly a nice feature for making content instantly and easily accessible.

Further, the technology is quick and simple to set up. Wu and his colleague demonstrated the ability to get a live stream (in standard-def using the built in camera on a Mac laptop) in under a minute. That certainly is impressive, though it's unclear how many people would want to pay significant money to stream live from their computer's camera.

The live stream (in standard-def) from Demo 09, as presented on the CNET News Demo roundup page.

(Credit: BitGravity)

Still, the concept of simplicity, efficiency and low cost (relative to competitors) is the point, and it definitely seems that BitGravity has built something that anyone with a budget for live-streaming, whether in HD or standard-def, can afford. In fact, Wu said that BitGravity's service costs about half of what its competitors charge.

For TV networks or large organizations, this is a big factor, especially given the current economic conditions. But cost aside, the ability to get high-quality streams online in just seconds may trump even that.

For an example of the technology, check out the Demo live-stream at the bottom of our Demo 09 roundup page.

March 2, 2009 4:02 AM PST

Tech brings hope to kidney transplant seekers

by Daniel Terdiman
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When President Obama talks about employing technology to improve the health care system, perhaps he's talking about something like the kidney donation software developed by Silverstone Solutions.

Designed by software engineer David Jacobs--whose own brother died of kidney failure--Silverstone's Kidney Paired Donation technology is built around the idea of radically improving the process through which those in need of kidney transplants must go to get what they need. If they are able to at all.

Today, Jacobs said, there are 83,000 Americans waiting for kidney transplants, each of whom has to wait between seven and eleven years for a new organ, much or all of that on dialysis. Many of those people don't survive the wait. Silverstone's technology (listen to a podcast about the software) aims to capitalize on a concept that has existed since the 1990s in which multiple pairs of incompatible donors and recipients are mined to uncover a suitable pair.

Silverstone Solutions' software is designed to find suitable matches between kidney donors and those suffering from kidney disease. Already, the software has been used by a San Francisco hospital to save nearly two dozen lives, the company said.

(Credit: Silverstone Solutions)

Silverstone is one of 39 companies presenting at Demo in Palm Springs, Calif., this week.

While the concept has been around for some time, Jacobs said, the technology didn't exist to deal with the complexities of finding the needle in the haystack: the pair that does work out of many which, for one genetic reason or another, don't.

After his brother died, and his own kidney failure led to two years on dialysis waiting for a transplant, Jacobs said that he realized he could apply his software skills to solving the problem faced by thousands of people across the United States--that of the frustration and frequently deadly consequences of having someone who is a willing kidney donor whose organ is incompatible.

In general, Jacobs said, making appropriate matches often wasn't possible in these circumstances because of a multitude of factors, including the difficulties of sharing patient information among multiple clinics, and the inability of those clinics and hospitals to apply sophisticated enough software to identifying the right matches.

Now, however, Jacobs said, his software--which in general will be licensed by medical institutions--will make it possible to quickly and efficiently find appropriate matches among even thousands of otherwise incompatible pairs. By evaluating the genetic data among the many potential pairings, the software can find the right recipients for the kidneys of willing--and importantly, living--donors.

What used to take months, or more, Jacobs said, can now take minutes, potentially saving the lives of many victims of kidney disease.

Already, San Francisco's California Pacific Medical Center is using Silverstone's software, and has so far saved nearly two dozen lives, Jacobs said.

The heart of Silverstone's software, he suggested, are algorithms that can find the right matches out of what might millions of possible combinations. What's key, he said, is that the software works with potential matches involving living donors, whereas the national list of 83,000 people needing transplants relies on finding matches for the organs of those who have just died. By working on potential pairings involving living donors, there is more flexibility in matching up the donors and the recipients, and, perhaps just as important, more time available for getting the donated organ to the patient.

For now, Silverstone's software is dedicated to kidney transplants. And while its algorithms revolve around genetic analysis specific to kidney disease, it seems logical that the software could also be used for finding appropriate matches for other organs.

February 27, 2009 10:05 AM PST

Arrington: I'll go to Demo 'if we're invited'

by Daniel Terdiman
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TechCrunch founder Michael Arrington said he will attend DemoFall, a year after the 2008 edition of his own TechCrunch 50 event was scheduled head-to-head with that year's DemoFall.

(Credit: Dan Farber/CNET Networks)

It looks like Michael Arrington has changed his mind about the value of the Demo conference in the wake of the announcement that VentureBeat CEO and editor-in-chief Matt Marshall will be taking over the tech conference after this year.

And, more notably, he's indicated that his tech conference, TechCrunch 50, won't be held at the same time as DemoFall this year, as it famously was in 2008.

"I'll certainly go to (DemoFall)," Arrington said Thursday. "I think we're on different weeks this year."

DemoFall 09 is scheduled for September 21-23 in San Diego. The 2009 edition of TechCrunch 50 does not have publicly announced dates yet.

Last year, Arrington and co-TechCrunch 50 organizer Jason Calacanis caused a stir in the technology industry when they announced that their conference would be held at the same time as DemoFall.

And he stirred the controversy by telling CNET News that because of what he saw as Demo's outdated "pay-to-play" model, in which companies must pay five figures to exhibit, that "Demo needs to die."

Now, as Marshall prepares to share the stage with outgoing Demo director Chris Shipley at Demo '09 next week, it appears that Arrington has softened his stance.

"If we're invited" to DemoFall, he said, "we'll go."

February 27, 2009 9:51 AM PST

Do tech hopefuls still need Demo and its ilk?

by Daniel Terdiman
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When Demo 09 kicks off Monday in Palms Springs, Calif., the high-technology showcase conference that prides itself on putting cutting-edge companies in front of A-list venture capitalists and journalists will do so in perhaps the worst economic environment in modern tech history.

Exhibitors at Demo pay well into five figures for the privilege of giving a six-minute presentation to a room full of influencers--many of whom have paid up to $3,000 to be there. So one could wonder whether the show can maintain its relevancy while companies are shedding record numbers of jobs, when credit is as tight as it's been in decades, and in an era where tech firms have more ways to promote themselves than ever before.

Yet Demo is not alone in its class: smaller tech conferences of between several hundred and several thousand attendees, such as TechCrunch 50, AlwaysOn, and those run by the GigaOm network. And with money being as tight as it is and the Internet and social media allowing start-ups and companies with new products to bypass traditional promotional methods, one question is obvious: Do we need these conferences?

The answer, according to conference organizers, attendees, and journalists, is yes. But we don't need all of them. And it seems likely that over the next year or two, unless economic conditions improve dramatically, only those conferences that can provide the kind of value that attendees and exhibitors alike need--a solid focus, great content, a long list of influencers, high production value and exceptional networking--will make it.

"I think every business in general is at risk to some degree right now," said Eric Faurot, a senior vice president at TechWeb, which puts on the Web 2.0 conferences, as well as many others. "In the event business, the stronger events, the really healthy events that have a real purpose to them, will emerge stronger, and weaker events will just die. They just won't survive."

Demo, of course, is in a transition period. It announced earlier this month that its longtime director, Chris Shipley, would be stepping aside after its fall 2009 iteration and that VentureBeat CEO and editor-in-chief Matt Marshall would be taking over. Marshall will appear on stage with Shipley at next week's event.

The Demo formula
Some might say that Demo's model of charging a fairly hefty fee to exhibitors, as well as several thousand dollars to attendees--not to mention the fact that it's held at pricey resorts in out-of-the-way places like San Diego, Palm Springs, and Phoenix--would make it a candidate for extinction. But Demo may in fact have just the right formula.

Asked if his software company, Bomgar Corp., would exhibit at Demo in the future after having done so two years ago, CEO Joel Bomgar was unequivocal: "Absolutely....We considered it a huge benefit when we did it."

Bomgar said he had paid $18,000 to present at Demo, and wouldn't blink at paying such a fee again, even if it had gone up a bit.

"If it was a matter of spending $20,000 to get in, we would alter our budget" to do so, said Bomgar, who is speaking on a panel at Demo next week, but who otherwise has no connections to the show. "All of the (benefits it offers), you can leverage to a value that far exceeds $20,000."

To Bomgar, one of Demo's most valuable functions is its traditional filtering process, in which organizers whittle down hundreds of companies--all of which are willing to pay the five-figure fee--to the between 65 and 70 that are finally chosen to present.

"The media and the venture capitalists show up to a show like Demo," Bomgar said, and "they know they're getting the cream of the crop. If they were just getting a random selection, that's instantly less compelling, rather than getting a focused group."

For Michael Arrington, who wears the hats of both a prominent tech journalist--editor of TechCrunch, which he founded--and one of the organizers of TechCrunch 50, a conference's value comes from the people he meets.

"I need to be around CEOs," Arrington said, "because they're the ones that will talk (about what their companies are doing). And there needs to be a lot of news breaking."

That's the lesson conferences can learn in order to stay vital, Bomgar suggested: Give the press and the money people the confidence that they won't be wasting their time by attending, and they'll go out of their way to come, regardless of where the event is. And if the media and the top VCs are on hand, then serious companies that are committed to building their businesses will line up to exhibit, even if they have to pay a hefty fee to do so.

The TechCrunch 50 model
There are other models, of course. For example, TechCrunch 50, an annual show in San Francisco put on by, among others, Arrington and Weblogs Inc. and Mahalo founder Jason Calacanis, gives a select group of start-up tech companies a chance to showcase their wares in front of many of the most prominent tech journalists in the world--without paying a fee.

"We don't charge anything (to exhibitors) for TechCrunch 50, so the only cost is people's time," said Calacanis. "In a down market, many intelligent and creative people have extra time. There is literally zero cost to the startup....If they make it to the main stage, they get $250,000 to $1 million worth of exposure in my estimation."

And according to Calacanis, the TechCrunch 50 model seems to be working pretty well. "We've seen more demand for this year than the previous two years in terms of companies asking us for the deadlines,speaker requests and sponsorship."

Still, expecting conferences to expand in this environment is unrealistic, said TechWeb's Faurot.

"You can't defy the physics of travel restrictions, and paying for conferences," said Faurot. "So any event that doesn't have a rock-solid position is at serious risk...You're going to sell less conference passes than last year, and you're going to sell less sponsorship than last year."

He explained that while TechWeb considers itself fortunate to have "the market leader" in several conference categories, it is without a doubt seeing the effects of the economic downturn. Faurot said where growth for some of the shows might have been around 30 percent two years ago and 15 percent last year, this year the company is simply hoping not to lose ground.

"We're calling flat the new growth," Faurot said.

Factoring in social media
While the evolution of social media--and the promotional and networking opportunities that services like LinkedIn, Facebook, Twitter and others give companies and individuals alike--may pose a threat to conferences that are not prepared to deal with it, it also presents a big advantage for those that are.

"In our experience, we've actually found that social media has increased (attendance at) events," Faurot said, "because people who are building relationships online, and people then have a reason to meet that person physically. It's very powerful. I think you just have to embrace it."

And that's where Demo may be in a good position, he added.

"People say, 'Of course, I can release my product at a number of events,' and there's a lot of alternatives to doing a launch at something like Demo," Faurot said. "But on the other hand, Demo is creating a time and place where people are focused on a category. The bet is you're going to amplify more (there) than if you just did your own announcement."

One phenomenon that has gotten a lot of notice in the last couple of years is what is called "lobbyconning," where people who haven't paid to get into a conference hang out in the lobbies at the event venues in order to network with the paying attendees.

But Faurot said that the activity of lobbyconning existed long before the term became well-known, and that, in fact, conference organizers who don't see such behavior are going to be unsuccessful.

"The worst thing for an event is when someone doesn't want to sneak into it," Faurot said.

One who isn't planning to sneak into Demo is BusinessWeek reporter Arik Hesseldahl, a longtime attendee of the conference. In a story he wrote earlier this month about Shipley's departure from the Demo directorship, Hesseldahl touted the value of the show.

"Shipley has run a great show, one that I have always considered a must-go," Hesseldahl wrote. "I quit attending most of the other tech conferences, but have always liked Demo because it is manageable, and because it's always interesting. Shipley has always picked a great crop of companies and I always leave Demo feeling optimistic about the future for tech companies and for the general state of innovation."

Of course, as a longtime attendee, Hesseldahl's enthusiasm for Demo isn't a surprise. But one person who gave the conference an endorsement was, perhaps, unexpected.

"I'll certainly go to (DemoFall)," said Arrington, who had stirred up a fair bit of controversy last year when he and Calacanis scheduled TechCrunch 50 at the same time as the 2008 edition of DemoFall and who, at the time, said, "Demo needs to die." "I think we're on different weeks this year. If we're invited, we'll go."

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