Startup 2009, "Rising from the Ashes", an event put on by Business Insider in New York City. This was one of those deals where entrepreneurs get a few minutes to pitch to and get rated by a panel of VCs and pundits. The winner gets attention and a shot at a cash prize. As Business Insider puts it, "Startup 2009 will showcase 10 top startups competing for bragging rights, buzz, and a $50,000 prize." I decided it would be interesting to do an independent rating of the pitches and then compare my results to those of the wise ones. This, then, is my pick of the pack, and the only prize is a bit of attention. Soon, though, we'll find out who wins the real prize.This morning, I attended
Rules of Engagement
Here is how Business Insider laid out the rules and the prize:
"Hundreds of emerging online companies submitted applications to present at the conference. The top 10 were announced on Silicon Alley Insider and will present on stage at the conference and compete for a $75,000 grand prize.
Applying to the conference was free, and all companies that applied were evaluated by General Catalyst Parnters, Softbank Capital, StarVest Partners, Venrock, and FirstMark Capital for possible investment.
At the end of the conference, one of the top 10 will also win a $50,000 grand prize, which will consist of a $25,000 cash investment from General Catalyst Partners and $50,000 of in-kind services. The latter will include:
- Up to six months of office space in NYC,
- Marketing campaign with Silicon Alley Insider,
- Legal services from a top-notch law firm,
- Financial services,
- PR services,
- and much more."
I really liked the fact that ventures did not have to pay to enter the competition. Paying to play is fine, except when the players happen to be startups with no cash. Business Insider waived the $295 entrance fee, thanks to Angelsoft, one of the sponsors. Well done, Angelsoft. Big shout out.
The 10 Ventures That Pitched
In alphabetical order (also the order in which they presented):
- Advanced Marketing & Media Group
- Adzoomi, LLC
- Article One Partners
- BeliefNetworks, Inc.
- GlobeFunder Ventures, Inc.
- Good Health Advertising, Inc.
- Micronotes, Inc.
- Path 101
- Portfolio Monkey
Five VCs and two journalists were on the panel.
The five VCs:
- George Bell, partner General Catalyst Partners; former CEO of Excite, Excite@Home, and Upromise; board member at Big Fish Games, Going, HubSpot, PhotoShelter, ShortTail Media, and WonderHowTo.
- Rick Heitzmann, founder/managing director of FirstMark Capital; board member at Clickable, Live Gamer, weplay, Riot Games, and the New York City Economic Development Corporation.
- Eric Hippeau, managing partner at SoftBank Capital.
- Jeanne Sullivan, general partner at StarVest Partners.
- David Pakman, partner at Venrock, former CEO of eMusic.
The two journalists:
- Matt Marshall, editor-in-chief of VentureBeat, co-executive producer of DEMO.
- Dan Frommer, senior editor at Silicon Alley Insider.
I rated each venture on a scale of one to three, three being the best, on four equally weighted criteria:
- Clarity of purpose. Was it blindingly obvious what the startup is trying to do?
- Potential for sustainable advantage. How quickly could it build a barrier to stop copycats?
- Gut check on entrepreneur, based on a mix of presenting skills, ability to manage questions, and track record.
- Executable monetization. How quickly and easily could the startup get to revenue and scale?
My evaluation was instant, based on the short presentations, and may change upon looking deeper into each startup. However, this is how investors work, too. The game at this early stage is to get a meeting and not get written off, even for a silly reason.
Who Won My Contest?
Five out of the ten startups are advertising plays. That seems like poor selection on the part of the event's sponsors. It is already a crowded field, and none of these ventures looked strong enough to enter it.
Oddly, for an event promoting the New York venture scene, at least two of the ten finalists were not from New York.
So, cutting to the chase -- drum roll, please -- the winner (of my vote) is...
Article One Partners
Article One Partners in short: crowdsourced research for patent prior art. If you spend a lot of money filing patents or buying patents or buying companies with patents, the "prior art" is the Achilles heel. If information about an earlier invention (the prior art) is later discovered, it can make the new patent invalid. How do you do enough research to avoid that problem? Pay a lot of lawyers a lot of money? Or crowdsource it. This startup stood head and shoulders above a relatively weak crowd. I probably would have picked it among an even stronger crowd. The startup is simple, hits a big pain point, and could quickly get network-effect scale and barriers.
The strong runner-up is Expensify.
Expensify falls into the "I want to try this because it solves an actual problem I have today" category. Its tagline says it all: "Expense reports that don't suck." Its freemium model makes sense. Its Basecamp-like simplicity and focus on smaller companies is now a well-trodden path to success. It got runner-up in my book because it was hard to see a really big business, mainly because it was hard to see barriers. The bigger firms in the game can copy its features, or buy it. So this looked like a good and fairly low-risk, albeit not huge, success.
One observation. Neither Article One Partners nor Expensify were polished presenters. Kind of shy and geeky. But their substance shone through, partly because of good questioning from the panel. In fact, "crowdsourced research for patent prior art" was not how Article One Partners described itself. That came from a panelist.
As for Expensify, it finally shone through when, just before leaving the stage after its pitch, the team revealed its sexiest feature. It only came out, too, because someone asked how they dealt with paper receipts. It turns out they have an iPhone app that lets you take pictures of receipts and email them to yourself.
As always, one man's opinion is worth... one man's opinion. What do you think?UPDATE: It seems that the judges agreed with my pick and Article One Partners won the grand prize. There is a good interview with the founder on The Deal.