MOUNTAIN VIEW, Calif.--Among the tech industry's up-and-coming, ad-supported business models appear to be out of fashion. Or at least that appears to be the trend among the companies that just graduated from the annual Boulder, Colo.-based incubator program TechStars. Representatives from some of those start-ups convened for an "Investor Day" at a Microsoft-owned auditorium here on Wednesday morning.
Founded by venture capitalists David Cohen and Brad Feld three years ago, TechStars accepts a total of 20 participants in both Boulder and Boston for a summer of development, seminars with industry veterans, and a small amount of seed funding. Thirteen of those 20 companies were advanced enough to earn spots at Wednesday's Investor Day, in which they offered short presentations to more than 100 members of the venture capital community who are actively interested in making early-stage investments.
And not a single one was offering a strictly advertising-supported business model, something that would've been pretty unthinkable not so long ago.
"(These companies) are the future of the entrepreneurial ecosystem as it evolves," Feld said to the audience midway through the morning. "We think these are all very fundable companies. In fact, most of the companies that you're seeing today are either well down the path of closing financing, or have closed financing, but for many of them there's still room."
Unlike the TechCrunch50 start-up pitch event earlier this month, none of these companies were actually launching out of a total stealth mode. Some had already experienced a sort of PR blitz--travelogue site Everlater generated some buzz when people were using it to map their plans for airline JetBlue's "All You Can Jet" promotion, and unofficial Twitter app store OneForty experienced the usual tech-blog mayhem earlier this week when it launched in private alpha and set off a flurry among the early-adopter crowd as people scrambled for invites.
But like TechCrunch50's array of start-ups, most of the TechStars lineup had productivity on the brain. Gaming and entertainment companies were limited to TakeComics, which aims to bring an iTunes-inspired business model to the digitization of comic books, and AccelGolf, a decidedly hardcore set of mobile and Web-based applications for avid golfers.
Business-focused applications were far more commonplace. Retel Technologies has built security-camera software enhanced with data and analytics, NextBigSound tabulates bands and musicians' popularity on social-media and music sites to roll up into a product sold to industry professionals; SendGrid offers e-mail marketing services to businesses at a variety of price points; and HaveMyShift, built by a former Starbucks barista, offers an exchange for hourly employees at major chain stores to swap and pick up shifts.
The companies were a mixed bag, and so were the entrepreneurs behind them: many fell into the young-entrepreneur stereotype of puppy-faced young men who could use a haircut along with that seed funding, but others strayed from the norm. OneForty's Laura Fitton is already a respected Twitter consultant; Raj Aggarwal, CEO of mobile data start-up Localytics, is an Apple veteran who had helped construct the original business model for the iPhone; and the founders of mobile contact management company Sensobi professed to earlier entrepreneurial experience in the chocolate industry.
Of the entire lineup, Everlater--founded by two childhood friends who had quit their Wall Street jobs to found the company--offered the closest thing to the typical ad-supported consumer model that was so ubiquitous in Web 2.0's heyday a few years ago, and even still, the founders plan to sell customized scrapbook and postcard products as well as offer branded packages to travel companies hoping to get their name out there.
A few other TechStars presenters said they hoped to use a free, ad-supported model as an entry point for the subscription services where they plan to make more significant money: video-based language learning system LangoLab, for example, hopes to strike deals with online video hubs like Hulu and then charge for access to lessons based around that "premium" content, and open-source forum software Vanilla charges for the hosted version of its product.
Granted, these business models still have their pratfalls: namely, the fact that they actually have to find individuals or companies who are willing to pay, something that often requires the formation of a solid marketing or sales department before profits can start to roll in. That was why many of them said they were looking to close early-stage funding rounds soon.
But those solicitations for funding were not lofty. Almost all of the TechStars presentations provided a target amount that they were seeking for their angel or Series A rounds (a few had closed rounds already), and the vast majority were south of $1 million--far south, in some cases.
SAN FRANCISCO--By late afternoon on Tuesday, it was getting awfully hot in the conference venue hosting TechCrunch50. Blame it on the body heat, or maybe the scores of laptops humming away.
But the air was sure to get a little hotter when it came time for the "Social Media Streams" category of start-ups to present.
The organizers of TechCrunch50 decided to save the last slot on the final day of the event (you know, right before everybody starts downing booze at the cocktail reception) to showcase new start-ups that deal with Silicon Valley's most hyped niche of the moment: real-time social media. As if Facebook and Twitter couldn't be dominating enough headlines here, there were six start-ups filling up the "stream" category: Threadsy, Lissn, Radiusly, Stribe, Clixtr, and The Whuffie Bank. And the panel of judges was joined by Twitter-savvy rapper Chamillionaire as a surprise guest.
Guess what? The judges, some of whom have been known to drink Silicon Valley hype Kool-Aid as though it were the world's finest wine, didn't think we needed most of these companies.
Oh, boy.
Threadsy's CEO Rob Goldman demos the site.
(Credit: CNET / Josh Lowensohn)Threadsy, whose founders called it "the world's first integrated commnications client," was the best received of the bunch by far. It's a messaging client that aggregates e-mails, Facebook messages, Twitter replies, instant messages, and also "unbound" communications like general tweets and status messages that aren't necessarily geared to you. "We built Threadsy to pull you back together," CEO Rob Goldman told the audience, citing the rapidly growing percentage of Americans who are using more than one messaging client ona regular basis.
It's got a slick interface, can also aggregate automated profiles for your contacts' social-network feeds, and can track Twitter queries in an almost dizzying visual format.
"I think Robert Scoble's head was about to explode," conference organizer Jason Calacanis commented afterward, referring to the Valley mainstay's near-pathological obsession with social feed aggregation.
Scoble's response was remarkably pragmatic.
"I'm just wondering if it has the FriendFeed problem," he said, "which means there's not enough people in the world that care about aggregating all their friends' social networks," but added that he wanted to try it out as soon as possible. A few of the other judges raised questions about how Threadsy will make money, considering inboxes have never been a huge trove for ad dollars. Goldman's answer was a little bit convoluted, which this reporter took to mean that Threadsy hasn't quite figured it out yet.
Up next was Lissn, which appeared to be a combination of a news aggregator, a chat room, and a question-and-answer service. "Lissn starts with a conversation," founder Myke Armstrong said, and then demonstrated the app by posting the question "What would happen if the moon disappeared?" and watched comments and answers roll in. What wasn't really clear was exactly why anyone would use it, what with Twitter, Facebook statuses, and various "conversation" trackers out there already.
"Why would I leave Twitter to join this?" Scoble asked. Harsh words coming from the guy who loves to rave about the next shiny thing that streams words across your laptop screen.
Lissn lets people begin conversations about whatever they want.
(Credit: CNET / Josh Lowensohn)Lissn was followed by Radiusly, which aims to solve scaling and communication problems for companies and brands that want to use microblogging and other social-media tools--many of which aren't terribly customizable. A company can build a Radiusly profile to create a directory of official social-network profiles for its employees, manage them internally, and share media like product images and videos for marketing and customer service purposes.
"I think you guys aimed at the right target but your dart hit the wall and not the target," Scoble said. LinkedIn founder Reid Hoffman chimed in, "In a rare position I agree with much of what Robert (Scoble) was saying." Ouch.
Next in the lineup was Stribe, which is in the same vein as Meebo's chat toolbar and Google Friend Connect--in other words, something that a smattering of established companies are already trying--adding social-networking features to any site by adding a chunk of code. Stribe can provide metrics pertaining to traffic and engagement, too.
This was another well-designed one, but it was met with more skepticism. "I think one of the hardest things about these networks is actually getting the community to sign up," Facebook exec Mike Schroepfer said on the panel of judges. Dick Costolo gently reminded the Stribe team, "You can do too many things and then it becomes difficult for people to understand what they should use your product for...when you try to do a lot of things at once, it confuses people as to how they should use it and then they just don't use it."
The fifth company in the lineup received a somewhat better reaction. Called Clixtr, it's an iPhone app (and eventually expanding to more handsets) that combines photo-sharing with location awareness, turning the phone into what CEO Fergus Hurley called "the ultimate social camera." Clixtr's hook is event photos: The iPhone app lets you browse pictures from geo-tagged events, send photos instantly to other Clixtr users' phones, and find events near you.
"I think that was awesome," Schroepfer said, but expressed some confusion over exactly how geotagging could sync up to an event. Scoble complimented its sign-up process, but said "I'm not sure it causes enough gameplay, or enough something-else that gets me into this." He wasn't the only one to point out that getting people to use the app would be a challenge. "I would up the level of incentive for participation," Reid Hoffman said, and added that Facebook could easily build location-awareness into the photo feature of its mobile apps.
The last company was what Calacanis called "one of our wild-cards," The Whuffie Bank. Named after the deplorable term preferred by marketing-buzzword-loving social media consultants everywhere (basically, it's slang for social capital, a term coined by science fiction author Cory Doctorow), The Whuffie Bank is a non-profit organization for building a virtual currency around online reputation and influence. You can then use that currency to pay others with "whuffie," like tossing a bribe someone's way to ask them to retweet something you've posted on Twitter.
Note to the Whuffie Bankers: At the very least, please choose a different name for your organization. "Whuffie" sounds like something that would happen in porn movies. And the judges seemed to think that however cool of an idea it might be, it might be best if the currency stays in science fiction.
"The problem with these kinds of currencies is you generally need some kind of banking system to regulate them," Reid Hoffman said. "A lot of cool things...I think conceptually it's going to be extraordinary difficult."
"I want to hear in one line, what do I get?" celebrity judge Chamillionaire asked. "It seem like you've got to do a lot of work for them to raise your reputation...It seems like you can fake it."
And with that, it was happy hour. Or so everyone hoped.
SAN FRANCISCO--The fall season has officially begun. Starting Monday morning, the annual TechCrunch50 conference took over the San Francisco Design Center for two days of start-up pitches and presentations; the conference's angle, as co-hosts Michael Arrington and Jason Calacanis reiterated, is that all 50 companies on the roster are completely new and launching for the first time.
Start-ups presenting at the conference, which were chosen through a behind-the-scenes elimination process, were grouped into categories. The first of the day was "Youth & Games," with an array of kid-focused and entertainment start-ups.
The day had already begun with some theatrics: the news was broken (unsurprisingly, by TechCrunch) that a previous TechCrunch50 winner, personal finance start-up Mint, had just sold to Intuit for $170 million in cash. Mint CEO Aaron Patzer took the stage on Monday to formally confirm the announcement.
So it was appropriate that the first pitch of the session, kicking off the TechCrunch50 conference as a whole, was pretty far out in left field: an iPhone app created by comedy-magic duo Penn & Teller. At first, their developers came onstage and apologized that the entertainers couldn't actually make it to the conference, and proceeded to demonstrate a text-messaging magic trick app. But then Penn Jillette stepped out to formally demonstrate the app, which has the aim of (ideally) fooling the iPhone user's friends into thinking that they're actually playing a guess-the-card trick with Penn and Teller via text messaging.
"It's not so much a moneymaker for us as a public service to get guys laid," Jillette said when asked if there was a revenue model to the app, which sells for $1.99 and is now in the iTunes Store. "If there's a Nobel prize for getting guys laid we'd definitely be in the running for it."
Jillette also announced that the app's alpha tester is a stripper from Philadelphia who has raked in extra tips by demonstrating the app alongside lap dances. Unfortunately, the array of judges didn't seem terribly impressed at its long-term business prospects.
Child's play for start-ups
The next presentation couldn't have been more different: Story Something, "which makes the personalization of children's stories simple and easy," founder Jim Rose said. The Web company uses Mad Libs-like text fields for a parent to personalize a story with their children's names and other attributes, and new stories can be sent on a schedule--for example, every evening before bedtime--as part of a paid-subscription model. There's also an iPhone app for easy reading to kids.
Most of the questions from the judges pertained to business model and the intellectual-property rights associated with the stories published through StorySomething. Judge Don Dodge called it "a lottery-ticket investment" for an angel investor, given the relatively low overhead costs and likelihood that such a company could scale without much additional investment.
Other judges' questions were a bit sillier.
"How profound is the assumption that parents will continue to make kids?" judge Yossi Vardi asked facetiously.
ClaseMovil lets you wander around a virtual world and spend microcurrency. It's also got an education tools, but is currently for Spanish-speaking users only.
(Credit: CNET / Josh Lowensohn)The third start-up in the round was the Mexico-based Clasemovil, a start-up that offers game- and video-based online educational exercises for kids in areas like math, science, and history. Clasemovil uses a format much like trendy kid-focused virtual-world services--its virtual currency, for example, is used to teach personal-finance lessons. The executives were accompanied by an on-staff teacher who vouched for the company's platform as a classroom tool, demonstrating progress-report tracking features.
It's launching first in Latin America (in the U.S. next year, apparently) but its founders hope that it ultimately will allow elementary-school students from around the world to learn by interacting with one another. ClaseMovil, which hopes to make money from subscription fees from both individual users and educational-institution subscriptions, has already raised seed funding and is looking not just to investors but also grant money from governments and organizations.
When asked by conference host Jason Calacanis whether they'd invest in it, judges said they'd consider it. Veteran investor Ron Conway said that it could benefit from some partnerships with other companies. "I would consider, but I wouldn't write a check until it's in English," Don Dodge said of the currently Spanish-only site. "English is where the money is."
Two judges, investor George Zachary and MySpace exec Jason Hirschhorn, said that they'd turn the investment opportunity down outright, with Zachary citing "so much competition" and "huge brand and marketing challenges" when it comes to making a splash in the education market.
The fourth start-up was another kid-focused one, ToonsTunes, a virtual world focused on teaching kids about making music. Players can record music through a mixer interface, network with other users, and sign up for "concert" spots at virtual "clubs." They can share their creations on social networks like Twitter and MySpace, or download them as ringtones. There is, of course, also a virtual currency involved for micropayments like purchasing samples of pop songs.
Obviously, virtual worlds for kids are hot in the wake of the success of companies like Club Penguin, which sold to Disney for $350 million two years ago. And the graphics-heavy ToonsTunes received a pretty warm reception.
"I like it very much," George Zachary said, calling it "GarageBand meets Club Penguin." Don Dodge said that "the quality is absolutely amazing." Hirschhorn questioned the company's ability to compete with the likes of "Guitar Hero." Vardi called it "very, very impressive," considering especially the fact that the company was privately funded and employs only five people.
Ron Conway said that the makers of Guitar Hero would love a product like this, but Hirschhorn remained the skeptic and said that it would be easy for the likes of a huge player like Electronic Arts to create a similar product with far better resources and connections.
Sealtale lets you claim products or services you use, then stick a logo of them on your blog.
(Credit: CNET / Josh Lowensohn) The Sealtale of approval
The last company of the "Youth & Games" round was a little different: Sealtale, a Korean company that lets users create personalized badges (or "seals") to embed on their blogs to identify themselves and express their affinities--as an iPhone user, a supporter of a certain cause, a fan of a band, for example. Clicking on a "seal" can bring up related blog posts from other bloggers with the same seal. It's one part self-branding service, one part blogroll, and one part Google Friend Connect-like networking service.
Calacanis asked the judges what they thought of Sealtale, which he called "Webring 2.0" in an allusion to the '90s-era blog network start-up. "We'd have to see how the product took off and how the acceptance was in other countries (besides Korea)," Conway said. Hirschhorn said he liked the user interface but wasn't totally sold how it was needed in a world of MySpace pages and Facebook fan pages.
So what did the judges think overall of the "Youth & Games" category at TechCrunch50? Calacanis asked them which of the five companies they'd take an investor meeting with, and it looks like there was a clear winner: Dodge and Vardi both preferred ToonsTunes, and Conway said he'd take a meeting with either ToonsTunes or Story Something but ranked them about even. Zachary, meanwhile, said "I'd put ToonsTunes at the top, Story Something a distant second, and the others are off the map."
Hirschhorn--the lone entertainment-industry member on the panel, it should be noted-- was the dissenter, ranking Story Something at the top and ToonsTunes behind it, sticking to his instinct that it'd be tough to get a music games start-up off the ground when there are already so many big players in the industry.
LONDON-- Britain's normally gray capital was unusually sunny this week. So were the attitudes of Web developers gathered here for a conference while, across the pond, Wall Street was in full panic mode.
A bright-eyed pack of several hundred aspiring Web visionaries descended upon London's Excel conference center for the semi-annual Future of Web Apps (FOWA) conference. Eager developers trawled the show floor's booths for stickers that they promptly stamped onto their (overwhelmingly Apple-manufactured) laptops. One pack of young men strolled around in straw sombreros. Another trio passed some time in between lectures by tossing around a Frisbee with the Yahoo Developers Network logo on it.
There was only off-hand talk about the global economic crisis that was also unfolding, in part, just a few train stops away in London's financial district. But people walking these halls all share a fervent belief in the power of their own ideas: Innovation cannot and will not stop, financial crisis be damned.
"A lot of people have asked (whether) the recession will impact certain things. I think the answer is probably that a major recession will impact everyone in some way, but traditionally I think some of the best companies have been built in down economic times," Facebook founder and entrepreneurial icon Mark Zuckerberg said in his keynote address on Friday evening. "If what you're providing is value to the end users...that lasts."
This wasn't some cloistered retreat of idealists. While FOWA is a small conference compared to bigger confabs like the Web 2.0 Expo or Demo, it pulls in big tech sponsors: AOL, Microsoft, Facebook, MySpace, Adobe, Sun Microsystems, all of whom want to reach FOWA's audience of young Web developers. Last year, the tech world went wild over Web platforms--packages of code released to companies and developers so that they could build their own widgets and applications to run on social networks like Facebook and MySpace. Now the industry has seen the platform craze extend to mobile phone software, like the iPhone, and new development platforms for downloadable desktop software, like Adobe Air and Microsoft Silverlight.
If you looked at the conference's array of sponsor booths, you'd think the tech economy was booming like it was in 2006. AOL was handing out pamphlets about developing on properties like social network Bebo and widget-maker Goowy; Sun Microsystems advertised its "Startup Essentials" program with, somewhat incongruously, a mechanical surfboard. Perhaps the biggest piece of showmanship came from MySpace, which hawked its U.K. developer program with one of London's iconic double-decker buses parked on the show floor, covered in MySpace regalia and playing nightclub-worthy electronica from a set of D.J.-style turntables inside.
That's not to say reality wasn't an uninvited guest to the festivities.
None of the big companies on the FOWA show floor seemed to be looking to actually hire new developer talent. A representative at Microsoft's booth, speaking to me over the din of the Guitar Hero stations that the company had set up, said he doubted anyone was hiring and estimated that the market for developer talent in London had probably dropped by five or six percent. A representative at AOL's booth wasn't sure if the company was hiring or not, but said they were really only there to drum up interest in properties like Goowy and Truveo among the developer community.
Entrepreneur or employee?
But it's unlikely that developers were concerned by the lack of employment opportunities; a job at AOL or Microsoft, or even Google, isn't what today's Web kids want anyway. That's not surprising, considering most of them belong to a digital generation that has been characterized by entrepreneurial self-promotion.
Inspired by people like Zuckerberg and Digg founder Kevin Rose, who also spoke at FOWA, and encouraged by how inexpensive it is to build on the Web these days, they see the recent wave of Web innovation as self-propelled. If you can't found a company because the venture capitalists are getting picky, at least build an iPhone app. Who cares if Adobe's not hiring?
Kevin Rose: "A lot of the advice going out there to start-ups right now is to pare back a little bit and get into a mode that you can survive in."
(Credit: Caroline McCarthy/CNET News)But then, there's that pesky "reality" thing again. Many of the developers, as well as designers and consultants also present at the show, spent the Web 2.0 boom swimming in lucrative freelance contracts, and a few admitted that they're now doing the unthinkable and searching for full-time employment. "From the freelance perspective, things are tough," said Suw Charman-Anderson, a London-based consultant who has been a freelancer for ten years. "If someone offered me a job, I'd have to think seriously about it...It's been a very quiet summer for me, and the (client) interest I'm getting now, I'm getting interest from India. Their economy seems to be a bit more robust."
A few companies with executives at FOWA were interested in hiring developer talent. Those companies tended to be independent but established companies that had either a stable revenue stream or a healthy cushion of venture capital to last through difficult times--and often, they are run by the very same people who subscribe to the idea that innovation can live through, and even thrive in financial disaster.
"Companies are seeing that they really need a Web presence and so many have embranced blogs for that," said David Recordon, head of open platforms at Six Apart. "I don't think that's something that businesses will neccessarily cut if money's becoming tight."
Digg's Rose proudly announced in his address to FOWA's attendees on Thursday morning that his company is hiring new engineering talent. But in an interview with CNET News later that day, Rose said everything is tougher now, from finding investors to easily affording company expenses.
"Start-ups that don't have traction and don't have that kind of hockey-stick-like growth on Alexa or Compete or whatever are going to have a really difficult time raising an additional round of funding," Rose said in the interview. "I think that a lot of the advice going out there to start-ups right now is to pare back a little bit and get into a mode that you can survive in." Frugality has always been crucial to Digg, said Rose, who had worked at several start-ups during the dot-com boom.
Survival of the fittest
Recordon and Rose, in their belief that sound business practices and useful services will survive, sum up the general of the freewheeling, free-thinking world of Web developers, where there's a heavy temptation to put a positive spin on the financial crisis. Their reasoning? Starting a business and making it last is always hard, and when a bull market flush with venture cash makes it easy, that's not a good thing. Many at FOWA argued that even in the best of times, the culture of Web 2.0 development should be a sort of Darwinism, albeit a very happy Darwinism covered in stickers with the logos of Bay Area geek brands like Flickr, Digg, and Laughing Squid.
"Starting a company is hard. Period. Exclamation point," said Michael Galpert, founder of a New York-based image-editing start-up called Aviary, in a talk about how to build a company outside Silicon Valley.
Mark Zuckerberg (right): "Some of the best companies have been built in down economic times."
(Credit: Caroline McCarthy/CNET News)He's right. It's a risky industry. In a city like London or New York, especially, many of these bright young developers and engineers likely turned down then-lucrative jobs in the financial sector in order to pursue the more volatile path of entrepreneurship or freelancing. They are already living lifestyles that many of their peers would deem excruciatingly difficult.
"I don't believe in good work, I believe in excellent work at a start-up company," Mahalo founder Jason Calacanis said in a talk about "entrepreneurial insanity" on Friday. "Start-ups are like the Tour de France or the Olympics, but in any team sport if somebody's not pulling their weight, they pull the whole team down."
Conference host and consultant Simon Wardley reminded the audience at a talk about innovation that this industry is never easy and that uncertainty is a perpetual hallmark. When you come up with a novel idea, it won't be novel for long.
"By the time we have all the information necessary to make a perfect decision, that decision is generally worthless," Wardley said. "Opportunities need to be seized."
And entrepreneur-turned-investor Julie Meyer of Ariadne evoked a quotation from Sir John Templeton that says to "invest at the point of maximum pessimism." Encouraging entrepreneurs to get venture rounds completed and to use the cash wisely, Meyer said, "Entrepreneurs are always investing at the point of maximum pessimism. That's what they know how to do best."
This is where the Darwin effect comes into play, as some entrepreneurs readily compare the current financial crisis to the original dot-com bust in a good way--that it might have a positive effect on the industry by separating quality start-ups and ideas from a long, candy-colored, vowel-free parade of Web 2.0 silliness. Being part of the business had become almost too easy, a fact easily illustrated by the loads of goofy widgets that flooded Facebook's developer platform and soon generated a vocal backlash.
Google engineer Kevin Marks, who helped build the OpenSocial platform, pointed out that the lean years of 2001-2002 brought forth many of the start-ups that have proven to be both innovators and powerful market forces in the past half-decade. "If you look at when the dot-com bubble burst, a lot of the companies that are speaking (at the conference) today grew out of that," Marks said. "What you tend to get in the quieter times is people coming up with these things...Flickr is a great example."
But here's the problem with this crisis-be-damned idealism: it will not always play out as well as every optimistic developer hopes. Many of the ambitious young techies who are convinced that they have the wherewithal to make it through the financial crisis are going to be in for a nasty surprise. That VC pitch spree might come up fruitless. That social-advertising-based business model might not turn a profit.
"There is not and cannot be a simple method (to innovation)," Simon Wardley said in his talk. Nor is steering a company, or even a great idea, through the worst economic conditions since the Great Depression.
Click here for ongoing coverage from CNET News, 'Tough times for tech'
NEW YORK--The crowds at the Web 2.0 Expo seem to have one clear consensus on what they think of this week's Wall Street meltdown: things are bad, but it's no time to panic.
Of course, they're all pretty relieved that the tech industry can't be blamed for this economic meltdown.
"This is a very good time to start up a company," investor David Rose of the New York Angels firm said in a panel called Starting Up in Silicon Alley. "Despite the calamities that are going on outside, the world is not coming to an end."
The current financial crisis is less than a week old, after all, so the outcome is less than certain. Most of the conference crowd chose to be cautiously optimistic.
The Jacob Javits Convention Center is only a few blocks from Wall Street. Yet at the Web 2.0 Expo, it was mostly business as usual: marketing, monetization, branding, social advertising, and a Microsoft-sponsored party on Wednesday night where the centerpiece was an ice sculpture that dispensed vodka shots.
Standing at his company's booth on Thursday afternoon, one representative of a Web-based nonprofit organization shook his head with disapproval. "Not enough people are talking about it," he said. We all know what "it" is.
In fairness, it's a stretch to say everyone was twittering while Wall Street burned. The underlying attitude at the Web 2.0 Expo was one of sober acceptance, realizing that conducting business in 2008 is more difficult than it was in 2006.
I'm very worried," said Majid Abai, CEO of the community software start-up Pringo. "When the economy is down, investment in technology is down."
There's reason to be concerned: financial-services companies are often cutting-edge technology buyers, and the mess on Wall Street makes it unlikely that big brokerage houses (at least the ones still standing) will be spending on anything nonessential anytime soon.
... Read moreHere's a tip for East Coast geeks who are gearing up for this week's Internet Week New York: Make a schedule. And leave room for last-minute additions.
The first citywide tribute to the Web revolution, sanctioned by the office of Mayor Michael Bloomberg and set to run June 3-10, isn't a cohesive weeklong event, nor is it a central nucleus with satellite events like the South by Southwest Interactive Festival or the city's own biannual Fashion Week. There are a few anchors like the Webby Awards ceremony, the Advertising 2.0 conference, and Federated Media's Conversational Marketing Summit. But the organizers proclaimed "open access for all," and encouraged any person or company to start a loosely-affiliated event adding to the few large-scale ones.
The city has held a "Digital Technology Week" before, but that didn't go far beyond a label and was unfortunately centered on the faltering DigitalLife gadget expo. Internet Week has an official online hub, a kick-off ceremony on Monday evening at the mayor's Gracie Mansion, and an official media partner (the local NBC affiliate). It also has a mission: to show how the digital revolution is fueling innovation in one of the most prolific global cities. That's a wide net to cast, and it could mean that Internet Week succeeds as a colorful celebration of digital business culture, or just turns into confusion and incoherence.
"If you look at the organizations that are participating, it's an incredible mix of really big companies, like the biggest company in the world, Time Warner; really, really small (start-ups); and everything in between," said David-Michel Davies, chairman of Internet Week and executive director of the Webby Awards, the digital-media accolades that are getting handed out on June 9 and 10.
He's right. Internet Week promises a melange of panels, mini-conferences, screenings, and parties ranging from the buttoned-up ("Applied Cryptography and Network Security Conference") to the popped-collar (the invite-only quarterly gathering of new-media elite known as the Founders Club) to the proudly shirtless (Thrillist's "Information Superparty," which has rented out the Hiro Ballroom nightclub for a performance by a Daft Punk cover band). Some might find the diversity of activities exciting; others might just find it headache-inducing.
In a sense, it's a microcosm of New York technology culture itself, which has made great strides in visibility in the past few years but still isn't anything as cohesive as what you'd find in the Bay Area or a smaller tech hub like Boston or Boulder, Colo. The reasons have been well-documented: rents are high, there's no Stanford or MIT next door pumping out engineers ripe for hire, and any enterprising tech start-up has to compete for developer talent with the finance industry and the big-media business on the ad sales front.
Plus, there's so much else going on in New York that an outsider seeking a "Web 2.0" culture would have to know where to look. Segments of the "tech" community--bloggers, video bloggers, start-up entrepreneurs, digital ad and marketing types--have their own social scenes, their own leaders and figureheads, their own hangouts and events and after-work spots. Twitter has only recently begun to make a splash among local bloggers. The digerati have no boisterous, everyone-knows-him figurehead the way Silicon Valley has Robert Scoble (or rather, they haven't had one since Jason Calacanis decamped for LA.)
But the leadership of Internet Week calls that diversity, not incoherence, and that New York should be proud it doesn't have an insular, self-referential "tech culture." The tech scene in New York "is only fragmented in the sense that it's so big," Davies said. "The idea that it can be entirely united through one big event is kind of crazy, and that's not what we're trying to do."
Davies has a point. In New York, if you work in technology, you're just as likely to be working for a company that's been around for over 50 years as one that just got its first round of venture capital. A developer working for investment bank Goldman Sachs would likely have little in common with the bloggers at Curbed or the founder of the latest local-news aggregator, except maybe a common distaste for Times Square tourists.
You can't even really call it a "tech scene," Davies argued. "The community that we're trying to talk to is not the 'New York technology community.' I think that's a far smaller community than what our goal is here," he explained. "The Internet and people working on the Internet--whether that's a blogger or a writer or someone who's building Ruby on Rails applications, somebody who's running an ad agency--it's an extremely diverse group of skill sets, industries, et cetera that can't be described by 'tech'...It's everything. It's media, it's finance, it's advertising. It is technology, it is start-ups, (and) it is innovation, but that's a slice of the pie. That's not the whole thing."
For New York's small Web 2.0 start-ups, many of whom have a tough time getting their name on the map when they're surrounded by the Gotham business establishment and are a country away from the entrepreneur-friendly Bay Area, Internet Week is an exciting opportunity for publicity and networking. But some are concerned that there's too much focus on the big guys. Even the monthly New York Tech Meetup, which usually focuses on brand-new, unfunded start-ups, will be using its Internet Week installment to showcase local success stories like the publicly traded IAC/InterActiveCorp and established start-ups in the league of Etsy and the Huffington Post.
"It's a really good thing to bring attention to technology in New York, obviously...(it'll be) a nice week that everyone's coalescing around and putting together parties for. It's like South by Southwest except without the central event," said Sam Lessin, co-founder of file-sharing start-up Drop.io. Lessin has managed to nail down venture funding; many of his friends and cohorts in the New York start-up community haven't, and he's concerned that big conferences and glitzy events like the Webbys will overshadow the smaller businesses in town.
"(Internet Week) seems like it's a larger-media-company sponsored type of thing," Lessin continued. "Honestly, the thing I'm most excited about that week is the Founders Club event, and those are year-round anyway." The Founders Club, currently in its second year, pulls together a mix of big-media and venture capital leaders to mix with the young executives of semi-established start-ups, many of whom are hunting for some series B dollars, big-name clients and partners, or an acquisition.
Event director Davies said that despite the broad reach of Internet Week and some of the powerful names behind it, it remains a great opportunity for smaller companies to showcase themselves and network. "One of the things that the city is trying to do is make New York a more competitive place for start-ups, and one of the ways that they do that is by promoting all of the amazing start-ups that are here already," he explained. "The kind of benefit that brings to a small start-up might not be something that (happens) the next day, but I think over the long run, this is part of a program that is designed to make New York a good place for start-ups to be in."
And indeed, amid the fray of open-bar parties and "power breakfast" panels hosted at corporate event spaces, there are more than a few events designed just for small-time entrepreneurs: a seminar on Wednesday night devoted to getting financed, a free yoga class for overworked geeks, a softball game pitting start-up founders against "everyone else." Internet Week, like the city itself, has countless identities. You're going to have to make it your own week.
NEW YORK--A year ago, a handful of local entrepreneurs got together and threw a party called The Founders Club. It took over a private residence, albeit a very upscale one, in Manhattan's Tribeca neighborhood, and was essentially a low-buzz gathering of Gotham tech enthusiasts who wanted to schmooze.
Bar. Elevator. Awesomeness.
(Credit: Caroline McCarthy/CNET News.com)My, how times have changed. Wednesday night marked the fifth occurrence of the semi-sporadic Founders Club parties, and the organizers (most prominently Blip.tv co-founder Dina Kaplan, Paltalk creator Joel Smernoff, and event planner Celia Chen of Notes on a Party) had stepped it up a few notches. This time around, it was held in ABC's Good Morning America studios in Times Square--and there was a bar in the elevator.
No, I'm not kidding. Upon entering the space, everyone was treated to a desperately needed glass of wine between the ground and second floors. I guess they couldn't wait.
The attendees were a combination of big media's digital gurus, venture capitalists, and local start-up entrepreneurs, overall amassing quite the who's-who of New York tech culture. The roll call, in part, included DoubleClick founder and Alley Corp. chief Kevin Ryan, Greycroft Partners' Alan Patricof, TheLadders' Marc Cenedella (I told him I'd seen one of his company's ads on TV while on the treadmill at the gym), George Kliavkoff and Jessica Schell of NBC Universal, Disney-ABC's Bernard Gershon, InterActiveCorp exec Jason Rapp, CollegeHumor co-founders Josh Abramson and Ricky Van Veen, former AOL exec and Pilot Group overlord Bob Pittman, Google's president of advertising and commerce Tim Armstrong, Digg CEO Jay Adelson, and a whole bunch of representatives from sponsor Bain Capital Ventures as well as a smattering of other venture firms (some of which I'd heard of, some of which I hadn't).
Representing the city's prolific new-media and blogger culture were Rocketboom host Joanne Colan, Mainstreet's Caroline Waxler, Gawker Media's Nick Denton and Gaby Darbyshire, TreeHugger (now Discovery Communications-owned) founder Graham Hill, and Curbed publisher Lockhart Steele, who told me that his blog network's current plans involve taking over the world. Watch out for that one.
A few folks were willing to dish out details on their companies--perhaps it was the martinis being served copiously at the bar. Tumblr founder David Karp told me about his red-hot micro-blogging start-up's plan to handle a revenue model--he plans to create a central "destination" homepage showcasing cool and popular Tumblr content and then serve ads on it.
I also talked to Carlos Garcia, co-founder and CEO of Scrapblog, who will be welcoming a whole lot of Web-ish folks to his home city for the Future of Web Apps conference next week. Scrapblog is hosting one of the event's official parties--I hope they know what they're getting into!
LX.TV founder Joseph Varet, whose company was recently acquired by NBC Universal, told me that his video site's content will start appearing on Los Angeles-area stations soon, and that a new show is in the works, too--but he wouldn't say anything more about that one.
As for the press corps, I was in the company of quite a few other tech reporters, like Fortune's Jessi Hempel, the Wall Street Journal's Jessica Vascellaro, the New York Times' Brian Stelter and Saul Hansell, TechCrunch's Erick Schonfeld, Silicon Alley Insider editor Henry Blodget, and Valleywag assistant editor Nicholas Carlson, who wanted to know why so many people didn't want to talk to him.
Don't worry, buddy, I don't think it's anything personal.
Official photos, courtesy of an event photographer, are on Flickr.
Peter Kafka at Silicon Alley Insider has started a little guessing game: which anonymous New York tech start-up is getting backed by influential ex-Googler Chris Sacca, who left his job as head of special initiatives to become an angel investor?
On Sunday, Sacca wrote on his blog that he's looking for a "Web geek" for an "edgy little content company" based in Gotham, which "needs its first full-time tech lead."
This is a big deal, because powerful ex-Google executive muscle would mean both great press and deep-pocketed connections for the start-up in question. But naturally, Sacca's not saying what the company is.
But we do know that:
It's based in New York
It's a content company that still doesn't have a "Web geek" on board, which knocks out any company that's too "techy" already
It "already has tons of sweet press, sick and steadily growing traffic, and some very passionate users"
The job description requires an "understanding of ad serving and optimization," as well as search engine optimization, which gives some hints as to its business model (ad-supported)
It's "extremely cool, currently being courted for acquisition, and chicks dig it"
There's no porn or gambling involved
Any guesses?
You'd think it would've drawn crowds.
TechCrunch founder and controversial Valley 2.0 icon Michael Arrington was making a rare appearance in New York, moderating a panel at the DigitalLife trade show on Thursday night. And the panel in question, called "The Disruptors," included a few of the start-up world's hottest names: Napster, Plaxo, and Facebook veteran Sean Parker (currently of the Founders Fund); Oovoo CEO Philippe Schwartz; SpinVox co-founder Daniel Doulton; IGA Worldwide CEO Justin Townsend; and Ooma founder Andrew Frame. Considering the resurgence of tech culture and startup spirit in New York in the recent past, this should've been a big draw.
But the makeshift auditorium on the show floor of the Jacob Javits Convention Center was, a bit surprisingly, somewhere between one-third and one-half full. Perhaps it's because New Yorkers are loathe to actually make the trek to the cavernous Javits Center, a space that's a good ten-minute trek from the nearest subway station and has an architecture that evokes some kind of evil-corporate headquarters out of a 1970s movie set in 2010.
And, truth be told, bringing Valley insiders to the stage was an odd choice for DigitalLife. The convention this year was even more overwhelmingly focused on mainstream hardware and home-theater than last year, with a seemingly bigger presence from big companies like Microsoft, Toshiba, HP, and Gateway. Start-ups like Ooma and SpinVox were practically eclipsed on the show floor, and consumer attendees seemed more interested in testing out new video games and HDTV displays than in contemplating the next big thing.
It was too bad, because the TechCrunch-sponsored panel had some very interesting things to say that undoubtedly would have made for a great dialogue had there been a more in-tune audience and a more generous time allotment. Arrington and the panelists seemed to be aware of the gulf between the average DigitalLife attendee and the tech-insider crowd that would already know the meaning of strange names like Ooma and Oovoo. As a result, a whole lot of time was spent explaining what exactly the panelists' start-ups are and why Arrington considered them "disruptors." When they started digging a little deeper and talking about what it really means to "disrupt" an industry, that's when it got noteworthy.
Let me make it clear: I'm sick of the term "disruptor." It's one of those perpetually overused cliches of Web 2.0 that I'd like to see put out of its misery--soon. (Runners-up: "ecosystem," "blogosphere," "enabler," and as other reporters have pointed out, Mark Zuckerberg's beloved "social graph.") It can also be inaccurate, in my opinion, because it implies that phenomena pop up suddenly and change the entire trajectory of an industry whereas I like to think that they arise out of long-term trends and are really evolutions, not mutations. (Overpriced CDs? A growing hacker community eager to swap files? Improved Internet connections making that file-swapping possible? Hello, Napster. Music industry, are you sure you didn't see it coming?)
But aside from all that nitpicking, the "Disruptors" panel featured some compelling inquiries that I wish could've been explored more. Arrington asked each panelist to name what they thought was the greatest disruptor of the past decade, and the answers were an interesting bunch. Schwartz answered ambuiguously. Frame and Townsend both said TiVo. Parker said that Frame's Ooma was "incredibly disruptive," and then admitted that he was on the telephony start-up's board of directors (as is TiVo CEO Mike Ramsey). Doulton's answer was the iPod.
Arrington disagreed. He thought the iPhone was more of a disruptor than the iPod. Doulton was more than willing to argue his point, and the panel showed some truly exciting back-and-forth energy, but in the interest of time, they had to move on.
iPod versus iPhone: which one is the real innovator? That's a debate I'd like to see continued. But with incidences of the word "disruptor" turned down, please. At the very least, a thesaurus could help.
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