Written by David Lenehan of Polldaddy and edited by Richard MacManus. This is David's account of the first day of the FOWA conference in London. Photos in this post are by donkeyontheedge (I hope he doesn't mind me using them).
Future Of Web Apps 2007 kicked off in London today with a host of speakers from various startups, bigcos, media outlets and associated businesses. Hosted by Ryan Carson of Carson Systems, the event is covering what various successful web companies are currently doing, why they are successful, and where they are headed.The
Mike Arrington: The Future of Start-Ups and Web Companies
With a lack of Wifi access, most speakers have had a very attentive audience. First up on the podium this morning was Michael Arrington from TechCrunch. Arrington first apologized for the closure of TechCrunch UK. He hopes the site will be up and running again soon (and talking to him after the show, he hinted that he had found a new blogger to take over this role). He dealt with a few big issues that web companies are facing today. Firstly, bubble 2.0 - are we in a bubble? He pointed out that last year in the US, TechCrunch covered $600 million of VC money that had been invested into new startups; while on the other hand, for example, Google bought YouTube for $1.65 billion. So that deal alone was bigger than the total invested in startups that year. His point was that the money being put in by investors is a lot less that the money being put in by existing companies. Instead of being in a bubble, we have not yet seen the peak of what's happening in this new web 2.0 era. He said there are still a lot more big applications, as important as Digg, Flickr, YouTube etc, waiting to come online. He also felt that the new Adobe platform Apollo is going to be big news and will help bridge the gap between the web and desktop. Adobe is a sponsor of this event and were on hand in the reception area, showing off some slick looking applications written in Apollo. However they shied away from questions regarding the ever-changing launch date.
Next up was Edwin Aoki, a chief architect with AOL, who went through the importance of building user trust in your products, and protecting their privacy and personal identities. This seemed like more of a confidence-building exercise for AOL, given their data leak last year. He also pointed out that email is still the biggest destination on the web, and not community sites such as MySpace.
Tara Hunt from Citizen Agency followed on that theme of community building and its importance for any startup who wants to build up a large user/customer base. She talked about the importance of company founders and developers alike continuing to have a role in customer support, in order to build confidence with your user base.
Commoditizing the web
Ben Holmes: Getting VC Money
Best of the day up to this point was Ben Holmes from Index Ventures, who gave a fascinating and honest talk about the process involved in startups getting VC money. According to Ben, the thing that VC's are looking for, more so than people with good ideas, are people who are passionate about their ideas and can sell them. They also look for people who have excellent development teams who can execute their ideas. Index Ventures have invested in the past in Skype, Betfair, Last.fm and more recently in Netvibes. Their portfolio of past investments makes for good reading. According to Ben, when looking for VC money, the average startup can expect to have to swallow the following hard requirements:
1.) You will have to give up an average of between 20% to 35% of your ownership
2.) VC representation on your board
3.) Liquidation option for worst case scenario
4.) Participation rights
5.) Reverse Vesting (If you leave your company earlier than an agreed time your 65% to 80% ownership can be cut significantly)
6.) Certain control, and veto rights
7.) option pool
One thing that might be a big issue for a lot of startup founders is that a lot of VCs will not let you sell until such a point that they feel that you have peaked in terms of your company performance. So if you get an offer one year later of a few million, that might make you a rich happy retiree, they are probably going to make you hold out a lot longer and for a lot more money. The pre-requisites for getting VC funding are simple: you need to have a unique product or concept; you need to have an excellent development team; and your idea needs to have a large potential market. It was interesting to note that Ben also gave a list of reasons why you should not get VC funding:
1.) You will probably miss out on the option of any small exit opportunity, which in a lot of cases could be very lucrative personally;
2.) You will be bound to a minimum of 3+ years of hard work building your idea up;
3.) You will lose the opportunity to run a lifestyle business.
In the end, if you have a great product then you need to focus on your business and not on fundraising. You need to build up the PR of your company and get your name out there. VC's spend most of their time looking around for new companies to invest in, so if you get your name out there and people like your product, then the VC's will come to you - guaranteed. If you decide to take VC investment, its important to find a group that is interested in your product, do not have any competing products on their books, and are willing to help you with recruitment, business development, and exit strategies, and not just funding you.
Last.fm, Thinkfree, Google Sketchup
Last.fm gave an overview of their company history, from its humble origins on a rooftop patio somewhere in London to their more comfortable offices of today. They claim that 15 million tracks are listed every day on the site, with a total of 6 billion items listed from day one. This is a huge amount of data and they talked about how they scaled their systems to cope with this.Matthew Ogle and Anil-Bawa-Cavia from
Tj Kang from Thinkfree was next on, promoting their online office suite - which is free to use and I have been told is quite good. They also have an API for bloggers and website owners to convert their Microsoft Office files to a MSO free format, by passing their documents through the Thinkfree API and getting a flash or HTML document on the other end, that is delivered to the web user.
Jason Chuck from Google went through some of the features of Google Sketchup and showed some nice examples of user generated content.
Werner Vogels: Emergent Design
Werner Vogels, Vice President and CTO of Amazon, talked about emergent design and becoming more flexible with how your service or application will serve its users in the future. He placed a lot of importance on knowing your required resources; when you need them; being able to use them when you need to; and not pay for them when you're not using them. All of this of course ties in nicely with Amazons S3 storage and EC2 cloud computing products. He gave the example of Smugmug.com, who were spending $40,000/month on hosting, but after switching to S3 saved almost $500,000 dollars in the first 7 months.
Quotations Book, Soocial.com
Quotations Book is a new site that is launching in the coming weeks. From what I gather, it's a search engine for quotes. You can place a quote widget on your site, and..... well if you like quotes, I guess you will like this site.
Soocial.com is a new site (not launched yet) that brings together all of your contacts on your blackberry, mobile phone, laptop, and PC. With a Soocial account, when you add a new contact to your list from, lets say an email, that same contact or .vcf info will be added to the contact list on your phone and all of your other devices. Their goal is to remove all of the syncing problems involved in managing contact lists across multiple devices.
Kevin Rose, Digg
Digg. He gave an interesting insight into the history of the company and what goes on behind the scenes. He talked about enabling Digg users who regularly digg the same stories and are nearby geographically, to hook up and become friends. He also wants Digg to start showing you stories based on what you have digged in the past.The last speaker of the day was Kevin Rose from
Kevin announced plans for a Digg API that you can use to create a Digg swarm, that tracks Digg data relating to your own website - which you can then use for your own purposes. He also announced support for OpenID on Digg in the near future (add that to Microsoft's and AOL's support for OpenID!).
Conclusion, Day 1 of FOWA
In the end there was nothing new announced here today, it was more of a big discussion about current products and current news.
Whether or not startups should focus on a business plan or not, was debated again and again. Mike Arrington said yes; Tara Hunt said no; Ben Holmes said yes, but not too much.
Everyone is pushing Adobe Apollo, there is lots of talk about attention data, and everyone we heard speaking today talked about the importance of building community for your users and shaping your application based on their feedback.
No mention of mobile technologies, semantic web, or web OS. Maybe I'm getting a bit ahead of myself, but those things are the future of web apps after all! More news tomorrow...
Ed: Big ups to David Lenehan for this thorough report. Looking forward to his report on Day 2 of the Future Of Web Apps conference.