There is definitely a certain energy about SXSW Interactive and it’s not created by those up on stage. Many of my colleagues and others I spoke with commented on the lack of new or different thinking emerging from the microphones on the stages. But its hard to deny the drive and optimism that lives in the hearts of the hopeful entrepreneurs and start ups striving to get their ideas and passion projects off the ground. More than once a stranger, upon over hearing my conversation, would interrupt and press into my hand a card or some other information about their idea or start up in the (misguided) hope I was someone who needed to know!
The lucky ones get to present their ideas at SXSW Start Up Accelerator Competition, presented by Microsoft BizSpark. As the marquee event of the SXSW Interactive Festival’s Startup Village, 56 finalists presented in front of a live audience and a line-up of judges that included entrepreneurs, venture capitalists, press and other industry notables.
On Wednesday the following seven winners of the competition were announced: News Related Technologies: Funf Project; Innovative Web Technologies: Viztu Technologies; Social Media and Social Networking Technologies: Thirst Labs; Mobile Technologies: Condition One; Entertainment Technologies: Wemo Media; Health Technologies: Ginger.io; and Music-Related Technologies: Ovelin.
Also, both the Interactive and Music portions of the competition presented a Bootstrap award to the company that has done the most with the fewest resources: Interactive Bootstrap Award: Brand Yourself; and Music Bootstrap Award: Onesheet.
So while these seven startups have received a valuable leg up, they still have a long way to go. Indeed, what does it really take to move beyond the startup phase to a sustainable, successful going concern? Earlier on in the week Flip the Media attended two sessions that attempted to provide some answers.
The first was an interview with Jeff Jordan, the former head of eBay Marketplaces, PayPal and OpenTable and now a general partner at the VC firm, Andreessen Horowitz. The firm’s investment portfolio includes FaceBook, Twitter, Foursquare and current social discovery darlings Pinterest and Airbnb.
The second was the premiere of Control+Alt+Compete – a film by Microsoft BizSpark‘s Director – Platform Strategy and Evangelism, Daryll McDade. Co-launched by Microsoft and Mashable, the film profiles the startup and emerging business scene through the eyes of 5 startups – Aboutone.com, Guardly, LiquidSpace, PopVox and Supergiant Games. The film follows these entrepreneurs as they face the challenges and obstacles of making their vision a reality alongside the insights and analysis of seasoned industry watchers and tech sector pioneers. Watch the trailer here.
This was followed by a panel discussion with some of the industry’s venture capital heavyweights including Tim O’Reilly of O’Reilly Media and Adam Ostrow, Executive Editor at Mashable and Mike Maples Jr., Co-founder of the Floodgate Fund.
What came across loud and clear from all these events is that it takes a boat load of passion and hunger as well as great intestinal fortitude to endure the inevitable rejection and financial strain that comes with trying to get a startup off the ground – let alone make a success of it. As Jeff Jordan remarked 93% of all new businesses fail. So the only way to fight those kind of odds is to have a very deeply held conviction that your idea is the one that is the very best solution for whatever problem it is you’re trying to solve.
This passion and commitment to the idea was seen as key. In a very candid part of Control+Alt+Compete, one of the startups was criticized for concentrating too much on their “exit strategy.” As the panelists discussed after the film, those ideas that are supported by people who can relate personally to the problem it is trying to solve are far more appealing investment prospects. Aboutone.com is a great example of a mother fixing a problem that had personally impacted on her and her family. Those that are “looking for a problem to solve” or focus too much on the financial exit point most likely lack the motivation to stick with an idea through to the bitter end.
But like any good idea – at some point – you may well have to admit it’s just not happening which presents a dilemma. How can you be both blindly confident in your startup and at the same time be pragmatic enough to know when it’s time to pivot or walk away. Well according to Jordan its about doing just two things. The first is setting rational, objective goals and milestones – devoid of the elasticity of hope. That is, when these goals and milestones are not met the goal posts can’t be shifted or ignored. The second is staying close to and listening to your customers and users. They will tell you what you need to hear and what you need to do to keep them engaged. Nothing new there I suppose. But when you have everything invested – both emotionally and financially – into something it can be difficult to face or even see the reality.
So beyond personal hunger and passion – are there any other signs that might predict whether or not a startup can run the long race? According to Jordan there are three things to look for – all of which of where there for ebay. Taking Airbnb as example he explained that its attraction lay in its similarity to eBay in terms of its fundamentals. The first is that both started trying to solve a small real problem, for eBay – a way for collectors to trade and for Airbnb – a way to find cheap last minute accommodation. The second is that both allow for the members of the community to earn revenue and the third is that it was that same community who expanded both ideas in terms of what was saleable through it and its utility.
So while the SXSW Accelerator Start Up Competition winners have achieved one of the better starts available – there is still a long way to go. We wish them all well and hope to read of their burgeoning success. For me, however, whats most exciting is despite the improbablilty of success there is a seemingly infinite supply of energy, hope and creativity that springs forth each year and delivers another crop of interesting and ingenious ideas to solve problems and change the world. Its enough to restore your faith in humanity.