These are not the best of times to be a technology start-up. Then again, the economy isn’t being particularly kind to any industry—from those ripe for a business model overhaul to the seemingly infallible. SIIA Previews--which kicked off this year’s Information Industry Summit, held in New York January 26th-28--offers a place for new ideas to bubble up. However, given the tone of the day’s keynotes, this is neither the time nor place for bubble business models.
The third annual Information Industry Summit pre-conference event that features CEO presentations of early-stage content creators, aggregators, and technology vendors started off on a sober note. Kate Bluvol, audit partner of PricewaterhouseCoopers, presented MoneyTree investment statistics that paint a clear picture of what we see all around us: As of the fourth quarter 2008, investment deals are down. IPOs were almost unheard of in 2008, with only six for the year as compared to more than 80 in 2007; 2008 also saw the first yearly decline in total investment since 2003. Yet Bluvol’s presentation was not all gloom and doom. She says early stage companies seem to be holding valuations and a steady level of investment. "It’s certainly not business as usual," says Bluvol, "but there’s still money for good ideas." And hearing good ideas is what Previews is all about.
The event is presented as a series of lean "elevator pitches" in which company CEOs have five minutes to describe their business and its objectives, then take five minutes of questions. SIIA’s content division received about 60 initial submissions (down slightly from previous years) from would-be participants, which it promptly chopped in half. The team then heard presentations from that group, and whittled them down to 10 finalists and two alternates. The committee worked very closely with the chosen few to hone these presentations to razor sharpness.
SIIA’s content division VP, Ed Keating views this extensive prep work as "a service to the industry. We want companies to be able to succinctly express what they do to better communicate to the industry." It works. The intense pace yields a level of interest lengthy presentations couldn’t match.
Given the scope of the SIIA’s membership, it isn’t a surprise that the presenting companies range quite a bit—from RSuite CMS, a publishing industry content management system that focuses on workflow to Arity Corporation’s efforts to "transform collective knowledge into collective intelligence." Juxtaposed as they were, the presentations sometimes seemed a bit uneven, but in almost every case, the previewed companies identified a market and revenue streams, keeping even esoteric ideas grounded in some semblance of a business model.
This isn’t surprising, given that the over-riding theme of the opening panel was on the need to rapidly monetize any solutions coming to market today. After Bluvol presented PricewaterhouseCoopers’ findings, she was joined by Tom Aley, SVP and managing director of Down Jones and Edward G. Reitler, a partner at Reitler Brown & Rosenblatt, whose practice focuses on venture capital, and mergers and acquisitions. According to Aley, "companies must create ROI models right away." The panel also emphasized diversifying revenue streams, rather than focusing on all ad-supported, or all fee-based. Aley says "if it’s not a viral model in a down economy, diversify."
Of the 10 Preview presentations, most offered clear business plans that are generating revenue. Adgregate Markets, for example, is creating a transactional ad network by turning banner ads into a direct buying mechanism called ShopAds. If a site visitor sees an interesting banner, they can click it and buy immediately—no need to leave the content site for a trek through an advertiser’s site to buy what you want. To get that all important click through, however, this model requires stellar placement within relevant content, something that Adgregate Markets relies on publishers to do themselves.
Presenter Associated Content has built a massive network of user generated information through which the company’s VP of advertising sales and business development Andrew Snyder says they hope to "develop a new content economy." The company "pays cash for quality content" and vets contributors and each piece of content through technology and human review to maintain quality. While the primary revenue is through "converting consumer interest into shopping activity" the company also does syndication and content partnership deals.
One of the more exciting presentations also revolved around social media: Cell Journalist provides a turnkey solution that enables news organizations to connect with their audience around citizen journalism. Founder Parker Polidor points out that most large news organizations don’t have a way to quickly leverage the masses of audience submissions—such as photos of the recent "miracle landing" of flight 1549 in the Hudson. However, he thinks his solution is of particular value to local news organizations that can better engage local audiences (and curb costs) by including them in the news process.
Not surprisingly, social connections infused several other pitches, including a "collaborative writing tool" dubbed MixedInk, and InsideView, which aggregates social media like LinkedIn with business information from sources like Hoovers and places within the context of CRM intelligence to better inform sales activities.
According to organizer Larry Schwartz, President of Newstex, the power of Previews is reflected in the success of past participants and during the day, he offered a snapshot view of the performance of some alumni, which include iCopyright, Generate, Pando Networks, Temis, and Near-Time. He has also seen trends in the types of companies that present, saying, "If you look at the last three years, there’s been an arc of more video and more user generated content." Keating believes the event is "a mirror of the industry as a whole: This year, more products focused on workflow."
The day ended with an incredibly insightful keynote by "serial investor" Roger Ehrenberg, managing partner of IA Capital Partners, LLC. Drawing from his experience with the highly-funded, much-hyped, and dramatically-failed start-up Monitor 110, Ehrenberg talked about how to fail successfully, and lay the foundation for success. He emphasized staying closely attuned to what the customer actually needs and feeling "the stress of getting to revenues ASAP." He contrasts the $20m in investments he received for Monitor 110 with the $50K cost to develop his most recent project, StockTwitz. Certainly, with new ideas comes the risk of failure. However, as Ehrenberg put it, "Failure, plus learning, plus persistence, equals success."