Start-ups do best when there is an established market and people already have expressed a need.
What seemed to be the overarching theme at the TechCrunch Disrupt conference in New York this month? Some ideas are ready to go to market and some are still inspirations on the back of a napkin. But seeing early stage firms with only $350,000 to $550,000 in funding is pretty cool.
"When people laugh at a company or say: 'this is the stupidest thing I have ever heard,' you are listening," said Fred Wilson of Union Square Ventures.
"I think crazy is a compliment. "You make money with the people who are crazy."
The companies offered new wrinkles on commonplace activities like: real estate tours (now in 3D), employee benefits, managing corporate contracts, vegan diets, even managing your heating, ventilation and air conditioning system (HVAC).
My conclusion: TechCrunch is AOL's groovy blog and a more exclusive platform for sharing technology innovation. The "Disrupt" conference was disruptive only in exploiting human interaction and looking at things with a new set of lenses.
The old adage in tech is that "you can build it or you can buy it." At eBay, they are buying!
CEO John Donahoe was at Bain before coming to eBay and revenue now is at an eye-popping $175 billion. The stock started at under $30 and now is at $50 under his watch.
Donahoe said: "we need to continue disruptive innovations. I found acquisitions (with CEOs) that were great visionaries. We have made 20 acquisitions over the past three years driving much of the innovation at E-bay."
TechCrunch selected companies for a "bake-off" to showcase their latest wares. Judging their new business plans were heavyweight people like: Marissa Mayer of Yahoo! Ime Archebong of Facebook Tracy Chou of Pinterest, Neil Mohan of Google and Kevin Weil of Twitter, all tech, most from the West Coast. These start-ups were damned lucky to have such expert criticism.
"I was impressed with Spacebar," said Yahoo's Mayer. It's a live streaming music app for mobile devices (not just your iPod) that shares live bands "in action." So a cool guy with a guitar comes on the stage and jams some notes while the two tech nerd co-founders show the product. Spacebar taps directly into mixing boards at concert venues, then splits revenue with the band, the venue and Spacebar. The band is geo-tagged while on the road tour.
Mayer then asked the guys: "but how will you surface the best content." Meaning what if the band sucks?"
My favorite companies involved imaging: Floored is the 3D data company that communicates real estate in a shared way. The CEO David Eisenberg showed the new Freedom Tower at One World Trade Center giving the TechCrunch crowd a sneak preview of the highest building in the western hemisphere. More compelling, designers and architects can re-arrange reality and show what a space might look like with changes (without demolition!). Floored has already raised $1 million.
ImageBrief disintermediates image bank companies by creating an online marketplace for photographers to deal directly with creative directors or companies who want original imagery and photography. It takes the place of "stock" shots. Simon Moss, CEO, who moved most of his team to New York from Australia, worked the TechCrunch demonstration floor. ImageBrief already has Saatchi, DDB and TBWA on-board as creatives want to get their shots and not have to pay licensing or rights fees beyond what's fair. Photographers retain 70 percent of the payments.
Magisto is a video editing tool created by Israeli developers that uses Artificial intelligence to help produce short form videos. Magisto does object and spatial pattern recognition analyzing and infinite number of options, along with semantic understanding, to process and create a video vision for the shooter. Magisto also automatically syncs music, stabilizes the video, adds narrative and does "storytelling by machine" by intuiting what you wanted to convey. It's just five bucks a month!
The company I think will make it fastest to market, will leverage Obamacare, and will make hiring and processing employees simple is Zenefits. Like many great ideas, Zenefits started with a resentment -- over health insurance!
Parker Conrad, CEO and a TechCrunch finalist, said "I wanted something to deal with the stuff I hate" about personnel management. He also promised, "we are going to mess stuff up for very large insurance companies."
Insurance companies and their brokers make too much money, he said. "We can offer more -- because we make money on the insurance companies -- we are going to drink the insurance broker's milkshake."
Zenefits promises the "least amount of work to hire somebody." Mundane chores like employment agreements and confidentiality NDAs or collecting data for payroll are now automated. "Once we have all your info, we walk (HR people) through the process to get them up and running."
"If these systems worked the way they should, this stuff would all be automated. We take all the crap work off your plate," Conrad said. David Pakman from Venrock is an investor.
Conrad then told me offstage: "Seven years ago I had cancer. "The State of California allowed me to be insured and I am a big believer in Obamacare because the stop loss and large pool of medical care will help lower insurance."
Conrad said Zenefits is just reacting to marketing dynamics using a cloud-based system to automate HR and help small to medium sized companies deal with the confusion of pay, insurance, taxes and handling COBRA or termination.
Simple.