About a week before DEMO, I was talking to Pat Kenealy, managing director of IDG Ventures/San Francisco, about the success rates of startup companies that launch first products at DEMO vs. the average venture portfolio. I posited that while DEMO is really about products rather than businesses that young companies are little more than their first products and that our screening process is designed to bring the best concepts to the surface without the bias and influence that affect many investment decisions. As a result, if each class of demonstrators was a portfolio, I speculated, it would out perform many of the top venture firms.
Pat didn’t disagree, but he did challenge me to “do a Kreskin,” and put the names of the 10 companies I thought would be runaway hits to be opened in a year.
Never mind the envelop. I decided to wait a few weeks for the post-DEMO media to play out so as not in influence coverage, and to name my 10 picks here. Now, as a disclaimer, I will say that I am impressed by all 77 companies – startup and established – that introduced products at DEMO and I believe that each and every one of those products has strong potential to be both impactful and successful in the market.
But the challenge Pat posed was to chose 10 that would out pace the market in terms of growth, valuation, and/or exit. So here they are in no particular order.
blist does for relational database applications what PowerPoint (and Freelance before it) did for professional presentations: it shifts the point of creation from the tool expert to the business expert. The product is simple to use and fills a big gap between business database tools and the everyday people who just want to work with their information. Since DEMO, blist announced a $6.5m Series A capital infusion from Frazier Technology Ventures and Morgenthaler Ventures. My bet: the company gets picked up by Google or another large Internet company rounding out its SaaS offerings.
Kaazing’s Enterprise Edition is essential technology that enables the next generation of real-time Internet applications. My bet: Kaazing is acquired by Sun or Microsoft in an effort to own the stack.
CellSpin makes it dead simple to capture and upload media – text, photos, and video – to a range of user-generated content sites, from Flickr to eBay. My bet: Expect a quick acquisition by a social media aggregator or a mobile services or device provider.
LiquidPlanner redefines project management software in a graphically-rich, reality-based scheduling metaphor. The effectiveness of the algorithm should be a threat to incumbent players who have done little to move project management from its specialty niche. My bet: LiquidPlanner is attractive to Microsoft as it embraces SaaS. The founders’ roots with the Redmond giant make the acquisition all that more probable.
Nirvanix makes scalable, reliable storage a Web service. It’s Storage Delivery Network is a boon to developers bringing community and content applications to market by allowing them to treat data storage as an operating rather than capital expense. My bet: Nirvanix has the potential to become a large independent company, but it will be too attractive to EMC, Dell, IBM, and other big players to leave alone. Expect an acquisition within 24 months.
Ribbit delivers a platform for the development and distribution of Web-based telephony applications, giving the company the right to its positioning as a “phone company.” My bet: Ribbit is gaining momentum among a range of established companies who need Ribbit’s platform to deliver integrated voice capabilities into their products, giving Ribbit big company potential; expect an IPO in several years time.
Skyfire is the Windows Mobile answer to the iPhone and may, in fact, trump it. It is without question the best mobile browser we’ve seen, adapting nicely to a range of phone designs. My bet: Skyfire joins Microsoft or, perhaps more of a stretch, Nokia, before the year is out.
Eyealike solves a problem that every consumer-contributed video site has to overcome in order to stay in business: identifying copyrighted content. The company’s Video Copyright Search is the only effective tool to do this, making it the go-to vendor for every video content site. My bet: Rather than going to Eyealike as a customer, a large media site (can you say YouTube) will acquire the company for competitive advantage.
Flypaper lets the average person create rich media presentations without learning the complexities of Flash. Flypaper is the next generation of professional presentation tools and will become the heir apparent to PowerPoint. My bet: This company is already on Adobe’s shopping list.
Seesmic may be the long shot among my top 10. The video-based messaging platform is gaining momentum among the digerati. It’s simplicity and multi-network support allow it to be a sort of glue among user-generated content sites. My bet: If the service can gain momentum in the wider consumer market, expect an acquisition by Yahoo! (most likely), c|net, Google (less likely), or another large media and community integrator.
If I can pick an eleventh, it would be BitGravity. The company’s technology for broadcasting live video over the Internet is fundamental to bringing real time video to an array of applications, from enterprise communications to Internet-cast media. My bet: the company gets big fast and sets a path to IPO, until Cisco comes plays white night to acquire the company.
So there it is: the 10 (plus 1) DEMO 08 companies I’d put in my investment portfolio, if I were, in fact, an investor. We’ll keep an eye on them and see how my “investments” stack up to the pros.