Recession Weeds Out Uninspiring Start-Ups

There's nothing like a recession to get rid of the pretenders.

That's the message Chris Shipley delivered Monday as the latest edition of DEMO kicked off with 39 promising new technologies -- far fewer than the 77 companies that launched at DEMO one year ago.

View a slideshow off 11 cool tech products at DEMO

But Shipley, the executive producer of Network World's DEMO 09 conference in Palm Desert, Calif., says the start-ups that do survive the recession will be uniquely positioned to deliver value to consumers and business customers.

"You can look at these numbers and you can decide that the glass is half empty," Shipley said in her opening remarks. "And if you did that, you'd be missing the big picture both in the contents of the glass and the open space there is. There is nothing like a recession to clear out the clutter. ... [Companies] that are a little bit faster, a little bit more courageous are winning the day."

When money is plentiful, the market sees too many start-ups that lack the resources and vision to achieve long-term success, Shipley said. The venture capital business will undergo major changes over the next two years, Shipley predicted. On one side there will be investors looking to minimize risk, and on the other side entrepreneurs who are creating more "capital-efficient" businesses, she said..

"I believe there is nothing but opportunity in this market," she said. "Economic hardship is not comfortable for anyone, but we have an opportunity to reset how we do business."

In another shift, DEMO for the first time in 19 years is featuring as many companies from outside Silicon Valley as from within, according to Shipley. Presenters were drawn from overseas locales such as Germany, Canada, Switzerland, Great Britain and Taiwan, as well as U.S. states such as Utah, Massachusetts, Colorado, Oregon, Michigan and Pennsylvania. "If you thought for a minute that Silicon Valley is the only place you can create a great technology start-up, you need to reconsider that view," Shipley said.

Naturally, the products featured Monday morning were focused on tools to help businesses do more with less.

A company called Cc:Betty unveiled a service that turns an e-mail conversation into an online, interactive space, sort of like Facebook. Users gain this benefit by Cc'ing "Betty," the name given to a software client that sorts through e-mail and parses conversations, files, images, media, dates and places.

Everyone in the e-mail chain is then directed to the online space with separate tabs for messages, events, images, links, and video and audio files.

E-mails are presented in a Twitter-like format, and photos are automatically sorted into galleries, while YouTube links are embedded as fully-functioning videos within the Cc:Betty page.

"There hasn't been much innovation in e-mail in about a decade," said CEO and co-founder Michael Cerda. "This is kind of like Facebook for your own e-mail."

Another start-up offering e-mail assistance, Technicopia, introduced Gwabbit, a US$20 plugin for Microsoft Outlook that captures contact information, including phone and fax numbers and addresses, from within e-mails and automatically puts them into your address book.

Technicopia president Todd Miller saidd that this product will save businesses many hours every year spent cutting and pasting contact information. Because Outlook doesn't provide a simple service for grabbing contact information, "some people don't even save contacts," Miller said. "They just keep doing inbox searches. Who knows how much time that takes up."

This story, "Recession Weeds Out Uninspiring Start-Ups" was originally published by Network World.

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