Webware

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.

Stribe's social network on a page (click to enlarge).

(Credit: CNET / Josh Lowensohn)

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.

Comedian Penn Jillette demos his new iPhone app.

(Credit: CNET / Josh Lowensohn)

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.

Whether you're creating the next Facebook or you have a patent on three-tiered umbrellas, you're an entrepreneur. But finding funding for your idea, getting some advice, or even just talking to people in your same situation can be difficult. Social networks designed specifically for entrepreneurs aim to help you achieve your goals. Check them out.

Go social, entrepreneur

Cofoundr To sign up for Cofoundr, you'll need to input a work or school e-mail address. That's annoying, considering many people have ideas that they've yet to start, but it's not a deal-breaker.

Once you do sign up for the site, you can immediately input all your personal information, including where you're from, what the focus of your business is, and more. Based on those responses, Cofoundr will match you with other entrepreneurs in your area. If you want to share your idea to see if investors will give you some much-needed capital, Cofoundr's Ideas page will help you out. But perhaps Cofoundr's best feature is its member-search option, which allows you to find people based on their expertise. Whether you're looking for a venture capitalist or strategy executive, the site will provide it. It's a nice service.

Cofoundr will help you find venture capitalists.

(Credit: Screenshot by Don Reisinger/CNET)

Entrepreneur Connect Entrepreneur.com's Entrepreneur Connect is a fine way to connect with other business owners. But unlike many of the apps in this roundup, Entrepreneur's service provides access to a wider array of companies.

When you first get to Entrepreneur Connect, you'll find that you don't need to waste your time registering. Instead, you can jump right in and start networking with other entrepreneurs. The site's "Make Connections" feature is especially useful. You can input certain criteria you're looking for in a connection and it will find people matching those items. The site also has some active groups for every industry represented in the social network. Entrepreneur Connect is a neat service. Try it out.

Entrepreneur Connect has some active groups.

(Credit: Screenshot by Don Reisinger/CNET)

Totlol offers a collection of community-vetted, kid-safe YouTube videos.

(Credit: Totlol)

Totlol developer Ron Ilan had enough.

It had been just over a year since he launched his site of community-vetted YouTube videos--where kids can watch Elmo, cutesy animal videos, or "Big Comfy Couch" without the accidental off-color search mishap. And, despite its popularity, he couldn't find a way to make it sustainable or survivable without adverse impacts.

So, earlier this month, at two in the morning, he wrote a long explanatory note to Totlol's users that ended with, "I'm closing Totlol down. Life goes on." Then he went to sleep.

"I woke up to hundreds of messages," he says. While Ilan was asleep, TechCrunch wrote a short post about the closing of Totlol and "they stirred things up," says Ilan.

Parents and fans wrote Ilan imploring him to find some solution to keep Totlol from closing. He's found one for now but says he doesn't know how long it will last.

Ilan conceived of Totlol while digging through YouTube looking for videos that were appropriate for his young son. As he built up a list of bookmarks with suitable clips, he thought other parents were probably doing the same.

When he began building Totlol in 2008, YouTube had just released an upgrade that allowed independent developers to use YouTube as a platform. So, Ilan developed Totlol as an application in which users can create profiles, manage their favorites, and do specific searches.

A YouTube video plays via Totlol.

(Credit: Totlol)

Once launched, Totlol steadily grew; it went from Ilan's few bookmarks to more than 15,000 clips submitted by hundreds of parents. Since then, Totlol has received tons of press, was an official honoree in the 2009 Webby Awards, was named in the Top 100 Undiscovered Web Sites in 2008 by PC Magazine, and even has an iPhone application.

"The site has its niche," he says, "and has its love." While the audience is modest, it's attached. The problem is, like so many other Internet start-ups, Ilan cannot find a way to monetize Totlol.

When using YouTube as a platform, there are various restrictions that state it cannot be combined with any sort of marketing or advertising. Obviously, this makes it difficult to create revenue to hire staff. "The Web site doesn't run itself," Ilan says, "it needs some minimum care." After the outcry at his decision to shut Totlol down, he began to look for other ways to make the site work.

The solution he's temporarily come up with is to separate content from advertising. Now, when going to Totlol's home page, users see an advertiser-supported catalog of videos but cannot view any content until they register. Once logged in, though, the ads disappear.

However, this isn't an ideal situation for Ilan. "This setup is not something I'm proud of," he wrote on Totlol, "and certainly not what I intended Totlol to be."

Ilan will try this model for a few months to see if it works. If not, he may ask members to either donate or pay a fee and hope other ideas will pop up so he can avoid closing Totlol down. As Ilan said in the note he wrote at two in the morning, "I just can't support and develop it all by myself anymore."

One of the greatest stumbling blocks that a start-up Web service company has to get over is customers' fear that the company will die and take their data with it. Manufacturers of traditional software can go belly-up without it immediately affecting a product's utility. And if General Motors went out of business tomorrow (I know, shocking), its cars would still be drivable. But Web services are different. When your cloud app goes under for the last time, it sinks customers, too.

In the best of the bad cases, when a Web service goes offline, the company in question is able to shut down in an orderly way and let its users know long before the servers are pulled off the Net. Large multiproduct companies generally do this well. When Yahoo shut down Yahoo Photos in favor of Flickr, it gave users plenty of time to offload their pictures, or move them to another service. When Hewlett-Packard shuttered the cloud backup system Upline, it likewise gave users fair warning.

But smaller companies may not be able to keep their servers up when their companies begin to fail. Does that mean you can't trust them with your data? Not necessarily. One company that's planning for the worst is Pogoplug, the makers of the cool, simple network file-sharing appliance I covered in April. Pogoplug's doomsday plan is not exactly fail-safe. The servers won't magically spring back to life if the company goes under. It's more of a seed vault kind of thing, but it's a good solution.

Pogoplug has put the source code for its servers in escrow. If the company goes bankrupt, the terms of the escrow dictate that the code be released to SourceForge as an open-source library. Then someone could come in and restart the service. Pogoplug CEO Dan Putterman says the service is designed to run on cloud services like Amazon EC2, so whoever wanted to re-light the system wouldn't need a large, expensive infrastructure to do so.

It's worth noting that Pogoplug doesn't actually store customers' data files. Rather, the online component of the product is a service that connects customers, their storage devices, and the users they invite together so they can share information. Were Pogoplug to go belly-up tomorrow, nobody would lose data, only the access to the transfer service they paid to use.

If the worst happens and Pogoplug does shut down, whoever restarts the service would have to re-gain the trust of users, who would need to re-configure their accounts and get new passwords to use the service again.

Even so, I like the dead-man's switch aspect to Pogoplug's escrow plan. While it won't guarantee that the product will resurrect if the company dies, it does at least make it possible--maybe even likely.

I'm surprised more companies, especially Web companies that store customer data, don't have public doomsday plans. If you buy life insurance, it's not an admission of weakness. It does not telegraph that you expect to die tomorrow. But if you've got a family (of customers) to support, the insurance can be a smart thing to have.

What's something we often use for security in the real world but not online? PIN codes. We use them at stores, banks, and ATMs, so why not use them online? For one, a QWERTY keyboard lets you create a much stronger, and often easier-to-remember password than you could with numerical digits. But PINs are still a password and can be just as good with the right precautions.

Some companies are using PIN codes to add an extra layer of security on top of what sites already offers. Here are four companies at the FinovateStartup conference doing just that.

Aradiom's SolidPass system combines a PIN and a mobile token system, where you've provisioned your phone as yet another way to secure your identity. You can enter your PIN as usual, but you need to have the mobile application running to verify that you're making a purchase. When the system verifies you through the PIN and the software app, it lets you in. This system also works on sites, so if you have something securely locked down by password, you can also require that users validate their credentials on their handsets as well.

MoBank. This U.K.-based company acts as a gatekeeper for your financial information for use on mobile commerce sites. You give it all your credentials in return for a way to use a single, secure log-in across multiple vendors. It forgoes the usual password system in place of a financial PIN that you enter at the time of the transaction. It's also smart enough to jumble up the way the PIN pad looks between transactions so malicious third-party tools can't grab your information with repeated viewings.

Online sellers can add the system to their sites, and in return the company has an app that put all those shops in one place, letting users search and purchase items they want to buy. It's only available in the U.K. for now, but co-founder and CEO Dominic Keen says it's coming to the U.S. in a few months.

The HomeATM plugs into your USB port and lets you make purchases and transfer money instantly--and securely.

(Credit: HomeATM.net)

HomeATM.net is ATM hardware for the Web. It's a physical piece of hardware you have to lug around with you. You securely enter your PIN or swipe your debit card to use for P2P money exchanges and purchases on commerce sites.

The payoff is that, unlike money-transfer systems that go off the credit and check system (which can take up to three days to clear), the money gets transferred immediately. All the while your data isn't compromised by things like keyloggers or screen-grabbing tools. The only downside is that you and the person you're sending the money to need to have the hardware.

Acculynk PIN is an additional layer of security applied to online purchases. If you're using a debit card it checks to see if it can be verified by PIN. Instead of entering the security code to confirm (which is on the physical card), you need to enter a PIN. It uses the same PIN code that's on your card and lets you enter it with a number pad that changes between presses for security's sake. In a way it's part PIN, part captcha.

SAN FRANCISCO--At the FinovateStartup conference, one thing is clear: a lackluster economy can be the best time for financial start-ups to get new users.

Apps that help people track and manage funds outside of their bank or investment service's site are in high demand, and many of the services presenting at the conference are trying to get those financial companies on board.

Why? Because those companies are still the gate keepers of trust. People are more willing to hand over their account credentials and detailed personal information to larger institutions over some hot, new Silicon Valley start-up. That, and it's a whole lot easier to get in the door if you're built into a financial institution's tools. The hard part of course, is proving you have a system that really works.

To that end, nearly all the sites that gave quick, eight-minute pitches at the financial innovation conference are trying more user-friendly approaches to common financial activities such as keeping an eye on bank accounts, managing and paying off loans, or helping people sign up for credit cards.

One site, KnowBeforeYouApply is simply taking user credit history, then recommending various cards people could sign up for based on that. Another card play, called Tempo, is trying to make debit cards more like credit cards. It's offering a third-party card that's linked up to a user's checking account, which skips the monthly bill in place of taking the money out as soon as it's spent. It also includes personalization and promotions, things that aren't usually offered by the banks that supply them.

Sites featuring simple, colorful charts, tables, and status bars are also aplenty. These charts aren't just for looks, though; for these sites, it's all about aggregation. Just like Facebook and FriendFeed are working to harness the never-ending flow of social information, these sites are attempting the same with accounts from multiple services. Even if it's not a core part of a product, companies want to keep users inside their apps with a dashboard that lets them view dozens of streams of information within a very small amount of space.

Kapitall's creative director Cordell Ratzlaff demos his company's financial Web top.

(Credit: Josh Lowensohn / CNET)

One of the best examples of this is Kapitall, which is designed like a Web desktop. It has a customizable workspace of company icons and portfolios that users can drag and drop to track their investments and compare sets of data. Creative director Cordell Ratzlaff calls this workspace "the playground," which sits atop a never-ending stock ticker with companies you're watching. It seems like a total data overload at first, but Ratzlaff managed to create and organize portfolios as if he were moving around picture files on a desktop PC. It actually looked kind of fun.

Speaking of fun, there were even finance tools for kids. IThryv, which launched late last year has a financial dashboard with account info and goal-tracking aimed at tweens. It's also set to expand to other demographics like senior citizens who are managing finances on a fixed income.

Not all the sites on display at Finovate are aimed at consumers, though. A few are focused on business users while retaining the look and feel of a consumer app. Expensify, which handles expense reports, is one such site. It links up to your checking account and can track purchases you've made while on a trip, and pay out directly to it. It even lets you add receipts for payments made in cash by using your cell phone's camera.

Looking forward
So what are some of the big financial trends to look for in 2009 and beyond? White-label services and mobile apps are likely to top the list. Wesabe, which is a dashboard for consumer finances (similar to Mint.com), recently introduced a version of its services that banks can give to their users as a way to track their financial activities. The company has already done this with a Delta Community Credit Union but wants to expand to other markets, too. The same goes for payment and loan services, which want to be more deeply integrated as payment options in places like hospitals and online retailers.

Each service also wants to make sure users can access their apps while away from a desktop PC in the form of a secure mobile application. Most companies who mentioned either having or working on mobile applications cited the iPhone, which could become its own payment tool since developers will soon be able to offer in-app payments that are linked up directly to user bank accounts.

With all these tools it seems as if the ultimate goal is to make it so users don't have to go out of their way to sign up to use them. Yet it requires a far more intense commitment and trust than a simple e-mail address and Captcha, which makes me wonder if 2009 will bring a Facebook Connect for finance.

Nitobi present their app-building tool, PhoneGap, during Web 2.0 Expo Thursday.

(Credit: James Martin/CNET)

The mini-Demo conference at the Web 2.0 Expo is the Launch Pad, where five start-up companies pitched to a small panel of experts (Marshall Kirkpatrick of ReadWriteWeb, Matt Marshall of VentureBeat, and Anand Iyer of Microsoft) and a moderate audience spread out across a very large hall. Of the five pitches, I found four very smart (read the summaries to figure out which one didn't get my nod) and of those, one appeared to be a genuinely new idea. That would be the first company in this run-down. (The audience, though, liked Nitobi the best.)

80legs is building a platform for "Web-scale" applications, which it defines as apps that deal with the ocean of data and transactions, just like a search engine (like Google) does. The service crawls up to two billion pages a day, the pitchman said. 80legs lets you run scripts against that corpus of knowledge, and for a reasonable fee: $2 per million pages looked at plus 3 cents per CPU hour. The service could be used to analyze Web-wide trends, scan for content that pops up on it, and, of course, for new search engines. It's a really interesting subset of cloud computing: a crawler for rent in the sky, as it were. I am very curious to see what people do (if anything) with this platform. 80legs "data center" is made up of a mesh of computers enabled by Plura Processing technology.

Bantam Networks is an online workspace for businesses that's entering private beta today. It's a combination of a nanoblog "activity stream," a task list, a file store, and so on. There are, of course, dozens if not hundreds of workflow apps out there, and more and more are taking on Web 2.0 aesthetics and getting Web 2.0 features, like this one. Bantam also pulls in personal data and updates from other Web 2.0 sources, like Twitter and LinkedIn, which is smart. The on-stage demo was strong, and in a vacuum, this would be a strong service for work groups. However, as I said, this is a crowded space and it's evolving very fast.

DubMeNow is trying to solve the business card problem: the fact that most cards get lost or forgotten, or at the best, put into a database where their information slowly becomes out of date. DubMeNow is a mobile app, runs on several types of phones, and lets you send and receive electronic cards, which then feed into your contact list. Remember the Palm Pilot's infrared card beaming? This is the same thing, except the data goes over the Internet and is stored on a server as well as on your devices. I don't want to be too harsh, because I, for one, desperately need a better solution for business cards, but this one rings flat to me. As inefficient as business cards are, they are part of an important social ritual that everyone understands. I don't know how DubMeNow gets a step in this dance. See also: Plaxo.

Nitobi is launching PhoneGap, a tool for building apps for smart phones. Developers write their apps in HTML and Javascript, and PhoneGap will make the app run on multiple devices--eventually (just iPhone and Android so far). It's an open-source project, and so far there are more than 50 apps in the iPhone app store that have been built with it. Eventually the company will also offer app store integration to push apps out to the various and different stores. Success here is measured in apps built on it, and it looks like the platform is getting traction.

ZeaLog is a Web app to help you meet your goals--to collect data, log it, and share it. The presenter, Aaron Hurley, used it to track his weight when he wanted to lose it. I'm of a mind to reduce my daily lunch expenses, so I might give it a try for that. Hurley points out that although there are dozens of personal tracking sites for weight loss, quitting smoking, and so on, each of those personal improvement tasks is an industry, most of which have giant global advertising spends. This is not a ground-breaking new idea, but it does look like a very smart business built on top of a useful service. My advice, though, is not to go to this service looking for a personal improvement task, but rather remember it for the future when you finally realize you want to get serious and lose weight, drink more water, drive more slowly, or what have you.