The Guidewire

As I’ve mentioned before, I’m one of the many obsessed with the semantic Web. It’s a catch-all term for anything, really, that makes Internet content more intelligent. But recent favorites of mine involve connections; tying together seemingly disparate entities online can produce insight heretofore impossible. Two companies here at DEMO have developed incredibly sophisticated algorithms that have changed the way I work. If you do any amount of research online - and who doesn’t these days - run, don’t walk to Silobreaker and Jodange.

I’ve been addicted to Silobreaker for several months now, so was delighted to see new features and a more intuitive design to the site. A current affairs search engine that combines context extraction and relational analysis, Silobreaker provides a 360-degree view on news events, people and places. I know, that sounds somewhat buzzy; you’ll just have to check it out for yourself. I find the network search especially helpful, which offers unprecedented insight into relationships between people and topics around a specific event. I spend a huge amount of time researching and have never stuck with a site so faithfully. Almost without exception, it delivers precisely what I’m looking for every time.

Jodange, which has understandably had a few meetings of like minds with Silobreaker, provides invaluable insight of its own. While Silobreaker pulls salient quotes as part of its entity analysis, Jodange focuses entirely on opinions. Its ’sentiment analysis’ engine, called TOMS (Top of Mind Service), mines and indexes opinions across the Internet, allowing for a distinct perspective on significant topics. How negative was Hillary Clinton the week of November 17? What is the oil industry’s view of the recent rate cuts by the Fed? Answering questions this specific was previously impossible without hours of research. You just can’t find this stuff on Google. Period.

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I’m sitting back stage at DEMO and the founders of Kaazing are about to take the stage to demonstrate Kaazing Enterprise Edition. The product is a real time messaging brokering system for the Internet, enabling the next-generation of real-time, “live” Web applications. It support scalable messaging in a range of applications.

But that’s not the point of this post.

I met Jonas Jacobi and John Fallows just after Thanksgiving as they pitched their product for inclusion at DEMO. Having helped launch the first Web server at DEMO more than 10 years ago, I understood immediately the importance of what they are providing in this technology. On the spot, I invited them to come to the conference.

Where, John asked, would DEMO 08 be held? Palm Desert, I answered.

“That’s great. Our families will love it there.”

That’s not an answer I’m accustomed to hearing from early-stage companies. Typically, startups teams are heads down — grateful for their forgiving families, of course — but accepting that, during the startup phase, family time is limited.

Not at Kaazing. Read the rest of this entry »

I saw a great post this morning from Kristen Nicole at Mashable. She covered several of her favorite companies here at DEMO, including good2gether, Redux, and Huddle. What got me thinking though, was a point in her intro.

I thought perhaps I’d be able to organize this roundup by grouping the type of company. However, each of these companies is so different, that such organization turned out to be quite impossible. This observation can be applied to more than just this handful of companies I’m covering in this post, which speaks to the deeper integration and cultivating of niche capabilities that is a product of our current application economy.

It’s a point that merits further consideration: the tech economy, once easily classifiable into broad strokes - enterprise, consumer, software, hardware - has transmuted into a rich landscape of niches. Even a newer label like ’social Web’ no longer fits; one has to append it with ’shopping,’ ‘graph,’ ’storytelling,’ etc etc.

It’s the natural evolution of tech cycles and sure to be repeated many more times down the road. One big revolution hits the tech sector - the Internet, mobility, Web 2.0 - and a thousand (or more) companies follow in its wake, attempting their own spin on the same story. Once the dust settles, interesting little ideas begin to pop up; innovative angles on the original big concept that remind us of just how much ingenuity exists in the tech world.

As Kristen notes, this is readily apparent at DEMO this week. Now that every possible niche social network has been created, it’s time to play around and see where the social Web can really take us. There are a myriad of directions in which to go and DEMO is exploring several of those. Some great examples: YouChoose, a distributed commenting widget that brings much needed critical mass to a highly disparate space; Standout Jobs, bringing social media tools to recruiting efforts; Delver, a search service based on your social graph; and Movial, a company putting the social graph in your pocket.

There are more notable companies exploring new niches in technology. We’ll take a look at few more intriguing themes later today.

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One of the aspects I love most about DEMO is the conversations. Unlike most technology conferences, DEMO has a casual, family-reunion-like feel to it. The single-track format allows attendees to relax and enjoy themselves. I think Chris’ gracious, laid-back attitude sets a precedent, one that filters down to every attendee. And just for the record, I had that opinion of Chris long before she started paying me.

So the conversations. Last night, I attended the NVCA dinner here at DEMO. The key theme of the evening was green tech and Chris and I had fascinating discussions with several attendees on ethanol, algae as a biofuel and the end of the world as we know it. (A good time was had by all.) Read the rest of this entry »

I open each DEMO conference with remarks that reflect the state of the industry. Here is the text of this morning’s opening. - chris

Good morning, and welcome to DEMO 2008.

These few opening minutes of the DEMO conference have come to provide a sort of “State of the Industry” update.

Over the last several months, we’ve talked to hundreds of companies and identified the 77 launching products here this week as the very best of the lot, no doubt. They are also representative of direction and change in the technology markets.

You see, all of those meetings to screen and select products for DEMO are data points about the industry, and so, like runes, we toss them across the table, ask questions, and try to get a read on the present and the future.

So, what do these 77 companies – and the hundreds that didn’t make it – tell us? Read the rest of this entry »

Tomorrow morning, I’ll open the DEMO Conference with my semi-annual observations on the state of the information technology market. (We’ll post it here just after 8:30am.) One point I’ll touch on is the importance of the total customer experience with a product, a site, a brand, and/or a company. It’s my belief that those companies that provide a complete experience will profit most richly.

(In fact, I made this argument more than a year ago in a DEMOletter column, suggesting that the mobile operator that focuses on customer experience rather than minute plans will take the market lead. I am not, of course, holding my breath on that one.)

A case in point was brought to my attention by Rick Schutte, COO of New York money management firm Galleon Management and a long-time hardware analyst. Rick made the observation that had Apple charged a $10 entrance fee to its 200 Apple Stores, the company would have generated an incremental operating profit of $1 Billion in 2007.

Apple had more than 100 million customers visiting its 200 stores in 2007. Had the security guard at the door charged $10 per entrant at no incremental expense, Apple would have generated an incremental $1B in operating profit in 2007. Apple stores generate highly valuable traffic, even without the cover charge. Rick pointed me to a Sanford Berstein report that says Apple stores generate five times the sales per square foot than BestBuy, the leading electronics retailer. At nearly $4,500 in sales per square foot, Apple stores out-perform luxury retailers including Tiffany ($2,746) and Coach ($1,648). BestBuy rings up $929 per square foot, by the way.

All those Apple store shoppers have other options when it comes to acquiring their Apple gear. But the experience of browsing an Apple store, talking with staff at the Genius Bar, and laying hands on the latest Apple products builds a strong bond between Apple and its “faithful.”

Are Apple products better than those from other vendors? It’s an arguable point. But there is no question: the Apple experience far outstrips any other technology, mobile phone, or consumer electronics provider. And as such, Apple is the vanguard of the new experience economy.

I woke up Friday morning to discover that I’d become a cat herder. You know the role: trying to get dozens and dozens of pieces and people corralled into some semblance of order. I should come to expect it in the few days before a DEMO Conference is set to begin. After all, I’ve been reprising this role twice a year for most of the last eleven. Still, it always strikes me that otherwise smart business people can get so caught up in the weeds that they lose focus on their own objectives.

Here’s a case (and would that it had only happened once these last few days): An exec from a demonstrating company scours the news wires, looking for mentions of other companies also participating in the event. Spying a perceived competitor (for the record: we don’t think these companies compete), the exec searches for every mention anywhere in the media, on blogs, on the company site, that might serve as evidence that the company “broke the rules” of DEMO. The “evidence” is packaged into a stern e-mail — usually couched in a tone of “far be it from me to call out another company, but…” — and sent along to DEMO’s PR team. I then get a call, confirm that the assumptions of the exec are, in fact, wrong. This is followed by an e-mail or phone call that assures the exec that we’re “on the case,” politely thanking him for his diligence.

Normally, I’d let this sort of thing slide, and it certainly wouldn’t be fodder for a post. But this time, the predictable tattle-tale thread dropped onto my desk at about the same time my Guidewire Group co-founder at and I were talking about focus. Read the rest of this entry »

As you saw from Chris’ earlier post, we have a host of groundbreaking, just-plain-cool technologies debuting next week at DEMO 08. The first day of DEMO always brings a big exhale, as we can finally talk publicly about all the fascinating products we’ve been knee-deep in for months. I’ll have to keep holding my breath for a couple more days but couldn’t resist telling just a bit more about what’s on tap next week in Palm Desert. If you can’t join us onsite, stay tuned to the brand new DEMO site (launching Monday) for videos of all the live stage demonstrations.

• Keep an eye out for a rather large delegation that may show signs of jet lag. Following a trip Chris and I took to Taipei in early December, the Taiwanese government is bringing 11 companies to DEMO, showcasing an impressive level of innovation from this small island. Two of the companies, atlaspost and Citiport, will present onstage. All are proof that tech ingenuity isn’t confined to Northern California.
• Collaboration is a nut that simply hasn’t been adequately cracked. We keep chipping away though and have found some eye-catching and never-before-seen takes on the solution from Huddle, Chalex, and KonoLive.
• Search engines aren’t just for the mass consumer. The heavy researchers among us are constantly looking for tools that will reduce time spent scouring data for relevant content. You won’t want to miss Silobreaker or Jodange, two companies I now consider indispensable to my work.
• As for the just-plain-cool category, Capzles, Rove Mobile, and Yoics are good ones to keep an eye out for.

It’s always interesting to see what clicks with the audience; there are inevitably a few that I didn’t see coming and a few favorites that don’t click as much as I’d hoped. Chris and I will be blogging throughout DEMO; add us to your feed reader so you don’t miss a thing.

It can now be said…at least in part.

Throughout the Fall, Carla Thompson and I spent uncountable hours sifting through DEMO applications, turning over stones, and interviewing hundreds of companies to come up with the 77 who will launch products next week at DEMO 2008.

At one point in those intense 90 days from late September through Christmas, Carla asked, “Is this just a better group of applicants? There are so many great candidates.”

We did have a tough choice. After all, when you cast the net as wide as we do — looking at every type of product from core components to consumer entertainment — you find yourself weighing the market impact of, say, an advance in enterprise application development against an implementation of a unique consumer search algorithm. Then again, that’s what makes DEMO unique and exciting . . . there’s something for every interest and often, these interests intersect in serendipitous ways leading to unexpected results.

Now, though, the DEMO organization has released the names of the 77 companies introducing products next Monday. The envelop please. . . Read the rest of this entry »

We first met Nexo Systems more than a year ago, and were so impressed by its Web creation and collaborative environment that we invited the company to make its debut at DEMO 07.  In a marketplace filling with competitors, Nexo Systems stood apart from the crowd, largely due to its intuitive interface and ease of use. In the DEMO program, we wrote:

Nexo Systems takes group collaboration one step closer to consumer-friendliness with an extremely intuitive, couldn’t-be-simpler, module-based site builder.  Nexo’s founders recognized the positive sin the current group leader, Yahoo!Groups, and worked to integrate similar technology into their product. But they removed any limitations, added all manner of fun widgets to drag and drop,. and most interestingly, game the pages an open architecture for those users with a bit of savvy.

Clearly, the company  not only stood apart, but it stood out and captured the eye of Shutterfly.  Earlier this month, the  online photo site acquired Nexo Sytems, in a cash and stock deal totaling less than $15 million.  Nexo Systems was privately funded by angel investors.

Nexo Systems’ founders Craig Jorach and Tom McGannon will join Shutterfly’s technology team, giving Shutterfly a talent-boost, as well as a “next-generation sharing platform,” according to a statement by Shutterfly CEO Jeffrey Housenbold.

By most measures, a $15 million acquisition is a modest outcome for a Silicon Valley startup, and certainly not the payday an institutional investor would want.   Still, it’s not a bad pay day for a small team.  Assuming typical seed investment and cap tables, the deal provides the capital and experience that will fuel future ambitions.

It’s also most certainly the prototype deal for the army of capital efficient Web 2.0 companies who have developed some decent technology framework, attracted a respectable user base, and who will likely run out of steam before they run into additional venture capital.   We’ll see more of these M&A deals through the remainder of the year as established companies jump start their next-generation offerings, capture Web 2.0-savvy engineering talent, and take some noise out of the market.