Christopher Herot's Weblog

Bubble - Did Someone Say Bubble?

As I previously reported, Scott Kirsner surveyed the crowd at the recent TechCrunch Boston event on the topic of whether we were in a bubble.  The results, as reported in Sunday's Boston Globe are that (a) things are still expanding, but not at an unreasonable pace and (b) when the expansion stops it won't be so bad.  There are video posted on Scott's blog, including one from yours truly.  I used the "b word" in the video, although I said it could go on much longer and would not necessarily end badly.

TechCrunch Meetup in Boston

TechCrunch did its first Boston Meetup last night and I will say it was a big success.  While we on the East Coast may occasionally envy Silicon Valley with its seemingly constant parties, last night had all the key ingredients:  food, drink, entrepreneurs, venture capitalists, press, and of course charming and attractive PR people.  It was a good mixture of industry veterans and newcomers. The key topic of the evening was whether or not we were in a tech bubble.  (Leave it to our puritan heritage to worry when we are having fun.)  Scott Kirsner was gathering video interview on the question.  My answer was that as long as we weren't seeing Fedex shipping bags of concrete or pet food, and as long as real money was being made, we at least had a few years to go.  Don Dodge added that the speculative money this time was not coming from the IPO-buying public but from professional investors who presumably were well aware of the risks, a sentiment later echoed by some of those same investors at the event.

Jeff Bussgang declared our independence from Silicon Valley in a colorful way that I won't repeat here.

Other people I had good conversations with out of the 700 that were there:  Mike Arrington, Chris Brogan, Dave Evans, Mike Ford, Neal Goldman, Chip Hazard, Tim Hurley, Doug Levin , Jeanne Logozzo, Alison Moore, Charles Moore, Christine Perkett, John Prendergast, Pito Salas and Reed Sturtevant.

Impressions of TechCrunch40

Looking back on TechCrunch40:

The conference was a credible first time out for the team of Michael Arrington and Jason Calcanis.  There was a high level of energy and creativity in the meeting room and the "Demo Pit."  Although many of the 140 companies will probably not be around in a year (only one quarter are financed and many are in unproven markets or have unproven business models) they were a good snapshot of what Web entrepreneurs are doing today, not just in Silicon Valley but across the world.  The breath of applications was impressive, including tools for creating music and video content, information sharing, personal finance, communications, and software tools.   In many cases, the companies showing in the Demo Pit were are promising as those on stage, illustrating the difficulty the organizers had in winnowing the list of submissions.  I won't try to summarize all the companies here - there are many places I've listed below who have already done so.

There was a lot to see in two days, since the breaks were short and the demos were frequent.  You could say that was a "high class problem" since there was never a shortage of things to see or people to talk to.

There were a host of logistical problems which undoubtedly will be fixed if they do it again next year:  not enough seats for all the attendees, a hotel that "sold out" of rooms at the conference rate well in advance but had plenty at a much higher price, a wireless network that only worked intermittently, a wired network that didn't work in a large part of the room, no cellular coverage for the people demonstrating mobile apps on the stage.  The organizers didn't contract for all the space in the hotel but then complained to the audience when a local VC set up their own, unsanctioned demo area.  And the first day ended with a 6:00 - 7:30 "Browse the Demo Pit" without so much as a bottle of water, not to mention the refreshments and other conference would provide during such an occasion.   More importantly, as Shel Israel has pointed out, the conference had changing expectations on the type of presentations and level of preparation expected.  Not all of the presenting companies gave live demos, and many of those that did could only promise attendees access to a "private beta" some time in the indefinite future.  The presentations themselves were not as polished as at DEMO, but in return we got to see companies in an earlier, more formative state of development.  The net effect was one of being at the beginning of something, both for the conference and for the companies presenting.  The meeting room was packed right up to the end of the two-day event, which is unusual for any conference.  If Michael and Jason do it again I'm sure they'll attract an even bigger crowd and an even more stellar group of companies.

Other coverage:

• TechCrunch covered itself extensively.
• VentureBeat covered every presentation in detail
• Renee Blodgett covered the events in detail and has great photographs.
• Christine Herron divided the presenters into 6 problem areas they addressed, with tracking personal data heading the list.
• Shel Israel discovered Twitter right before the conference and went to town with it.
• Ars Technica thought the event may have been over-hyped but ultimately lived up to its billing.

Mark Zuckerberg at TechCrunch40

This afternoon, Mike Arrington interviewed Facebook CEO  Mark Zuckerberg at TechCrunch40.  (Most of the audience has a Facebook account.  Many were on it during the talk.)  Arrington started by asking where Facebook's future growth would come from.  The answer: outside the USA.

Then the discussion turned to opening up the platform, starting with the mini-feed.  Asked if he was afraid that offering the information in one place would reduce page views, Zuckerberg answered that the feature made the site more useful, with the result that page views actually increased by 50%.  On the topic of the Social Graph, Zuckerberg said they took the view that the network of relationships already existed outside Facebook and they saw Facebook's goal as modeling it, not creating it.

Arrington asked about the growing pains of launching the API, starting with applications that used "black hat" techniques such as sending unsolicited messages to users.  Zuckerberg said their intention was to have a platform that imposed its own rules and allowed a large number of developers rather than have Facebook hand-select the applications.    They figure they will be continuing to adjust things, for instance changing the way activity is reported so as to emphasize engagement.  Similarly they are looking for other ways to reward engagement rather than merely accumulating users.  That's one reason they don't expose a way for applications to leave messages for other users who don't have the app installed.

Zuckerman remarked about how Facebook was one of the first sites to push people to use their first and last names, phone numbers, etc, offering better privacy settings along the way.

What about improving Facebook's messaging facilities?  They understand the frustrations and plan to make improvements, but don't see themselves as an email platform.  For instance, they are concerned not just about spam but also about preserving the feeling that messages are usually from an individual and not part of a stream of mass-generated messages.

Zuckerman announced that Accel Partners and the Founders Fund have started a $10 million FB Fund which will make grants of $25,000 to $150,000.  The fund will not be taking an equity position but will have the right of first refusal on subsequent investments.  No web site yet, but send email to platform@facebook.com.  The critera: innovative and disruptive things.

In response from a question from the audience about when Facebook would support OpenID and other open standards, Zuckerberg said Facebook only had 300 employees but would be moving it that direction.

Humble Beginnings Panel at TechCrunch40

At TechCrunch40 this morning, Michael Moritz interviewed Marc Andreessen (Netscape, Loudcloud, Opsware, Ning), David Filo, (Yahoo) and Chad Hurley (YouTube) about their experiences and advice for the entrepreneurs in the audience.   What was striking was how modest their expectations were in the early days of what ultimately became billion dollar companies.  Marc Andreessen said his primary ambition was to get out of the midwest when he moved to California.  At the time he joined Netscape no one had any idea that there was a way to make money on the Internet.  Similarly, David Filo and Jerry Yang were bored with graduate school and started Yahoo in their spare time.   No one had any idea how they were going to make money, as web-based advertising had yet to be invented.  Chad Hurley and his two partners started YouTube to solve some problems they had and build the first version in a few months.

Marc Andreessen pointed out that a startup needs an idea that is "crazy enough" that no established company is already doing it.  He also pointed out that 999 of every 1,000 such ideas really are crazy.  Thus, he too recommends starting out with something the entrepreneurs would use themselves.

On the question of what tips they would give to entrepreneurs:

• Make sure one of the founders can be a CEO, since hiring an outsider is very risky.  (Andreessen)
• Don't hire too quickly - wait until you have a product-market fit.  That keeps the burn low (Andreessen) and makes the company more nimble (Hurley).
• Look at how you are using the product yourself.  (Hurley)
• Attract people who are passionate about the space the company is in.  (Filo).

As much as all the panelists agreed on the idea of staying small, the one regret they have is that with the hindsight of seeing how fast they would grow, that they should have hired faster.

TechCrunch40 Conference

The TechCrunch40 conference opened this morning at the Palace Hotel in San Francisco.  Organized by Michael Arrington and Jason Calcanis it is similar to the DEMO conference in that it consists of 40 8-minute stage demos and 100 companies in the "demo pit" next door.  Arrington and Calcanis mae a big point about how the selected companies (750 applied) were not asked to pay for the privilege,  As a result, many of the presenting companies are in early stages of their development - 30 are as yet unfunded.  Some of them are so new, e.g. Powerset, that there web sites are not yet open for business.

It looks like there are more than 500 people in the audience, including 100 standing along the walls.  For those who are not here in person, there is live blogging at TechCrunch.

The presentations are followed by a panel of judges.   In the first session on Search and DIscovery these were Marc Andreessen, Ryan Block, Om Malik, Marissa Mayer.  They ask some tough questions, such as which companies will be around, or acquired, in the few years.

One interesting side note: Calcanis had to ask the members of the audience to turn off the WiFi mode of their iPhones.  Turns out that many iPhones in one room can disable even the most robust wireless network.