Startups Compete for Attention, Capital in Innovative Contest
In Silicon Valley, TechCrunch50 competition gives new businesses exposure
By Andrzej Zwaniecki
Staff Writer
September 11, 2008
San Francisco — Hungry entrepreneurs used to come to Silicon Valley in California on their own to vie for the attention of venture capitalists and seek advice from industry insiders. But editors of a popular technology blog have opened the gates of this hub of innovation to would-be business owners.
The September 8–10 “TechCrunch50” competition allowed more than 50 early-stage, often unfunded technology startups from the United States and 10 other countries to launch officially and to compete for the title of best venture. In addition, more than 100 other firms demonstrated technologies in an adjacent exhibition hall.
The diverse ventures were divided into a dozen categories — such as social networking, cloud computing, mobile applications, entertainment and games, and knowledge sharing. Competing companies offer products and services that include advertising tools for small companies, Web-management solutions, online dating services and Web-based platforms for birdwatchers.
For 2008, the top prize of $50,000 went to Yammer, a Web-based messaging system for the corporate world. The fact that 10,000 people and 2,000 organizations signed up for the service the first day it launched is an indication of longer-term success, experts said. “The best is yet to come,” Aaron Patzer, the head of Mint, the 2007 prize winner, told David Sacks, the founder of the company Geni, which makes Yammer.
For most participating companies, just making it to the final round of TechCrunch50 was a reward in itself.
“We feel like we already won,” said Mike Subelsky, a co-founder of OtherInbox, which advertises itself as “the cure for e-mail overload.”
The former U.S. Navy officer told America.gov that an opportunity to pitch ideas to the technology industry’s most influential venture capitalists, investors, established entrepreneurs and corporations and the international media is invaluable for entrepreneurs.
Companies’ representatives make 10-minute presentations about their ventures on a stage before such an audience. The presenters usually start with a proud introduction: “I am a founder or co-founder and chief executive of .…” Thereafter, they receive immediate feedback and advice from panels of judges composed of prominent high-tech industry leaders.
Established investors and business owners in Silicon Valley get as much out of TechCrunch50 as some of the startups that are there to pitch their ideas. Raj Kapoor of Mayfield Fund said that bringing together the most promising startups makes it easier for venture capitalists like him to take a first look at what new firms have to offer. “We constantly look for great ideas and great people,” he told America.gov.
EMERGING ENTREPRENEURS, WORLDWIDE
Among entrepreneurs at TechCrunch50 were teenagers and people in their 50s, youngsters still in high school and people with doctoral degrees. They had one thing in common though — the passion with which they pursue their ideas and a desire to make people’s lives better (while they make money).
“All entrepreneurs have in their genes the desire to make a global impact,” said Ron Yekutiel, chief executive of Kaltura, an open-source platform for video creation, management and collaboration. The company won the People’s Choice award in the 2007 TechCrunch competition.
The five finalists in the 2008 competition, in addition to inventors of a gaming platform and interactive learning tool for students, include producers of devices that help monitor toxins in consumer products or fitness and health in individuals.
Michael Arrington, co-editor of the TechCrunch blog and co-organizer of the competition (with the blog’s co-editor, Jason Calacanis) said there are more interesting Web applications today than were just two years ago, when presenters focused on technology tools dominated the competition. “We see a lot of really cool staff coming out,” he told America.gov.
Arrington said high-tech industry clusters have grown in other countries — such as Israel, India and Ireland — but Silicon Valley continues to attract entrepreneurs from around the world, as indicated by more than 1,000 entries from 49 countries received by the TechCrunch50 competition.
But much innovation still is happening in Silicon Valley too, Arrington said. He pointed out that, with most of the world’s venture capital firms located within an 81-kilometer radius, Silicon Valley is still the most important center of financing for startups.
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