DEMO Report: Startup Creativity Through Variety

Entrepreneurs demonstrating their latest ideas at the EMO Spring 2012 conference showed that inspiration travels in many directions. The young companies that took the stage Wednesday to kick off the three-day startup fest in Santa Clara, California, demonstrated a surprisingly wide variety of software and Web services.

Unfortunately, one thing most of the new companies share is the lack of a clear plan for building a profitable business. Typical for today’s startups – particularly in the mobile and cloud markets, but even in e-commerce – the strategy of choice seems to be building as large of a user base as possible, then trying to figure out how to make money later.

E-Commerce Startups Focus on Video

Nevertheless, among the more than 30 startups that put on demonstrations, some had potential. Austin, Texas-based Cinsay raised eyebrows with what it called “container commerce.” The company has figured out a way to embed an online store in a video player, so viewers can buy products without having to go to a separate website. The player can conduct transactions even when embedded in a social network or third-party website. “If they can find a way to get people to buy in-line like that, it would be a huge game changer,” said Will Price, chief executive of advertising company Flite, in a panel discussion following the presentation.

Irvine, California-based e-commerce startup Looqiloo has launched in beta a cloud service that lets people upload videos of product reviews. If someone buys the product, Looqiloo shares revenue with the product distributor and the reviewer. While that sounds good on paper, thin retail margins make it hard to imagine there would be enough money to go around. “There’s a bunch of cleverness here, but where’s the meat?” asked panelist Tom Gillis, chief executive of Bracket Computing. “I like the fact that they pay the different agents; that’s cool. But from what pool of money is that drawn?”

Cloud Computing Meets Scrapbooks – and Transcriptions

But perhaps the coolest startup on display was Mountain View, California-based NotesCloud. The site lets people grab video, pictures and articles and create their own online scrapbooks, which can be shared. NotesCloud’s templates make it possible to build impressive-looking books. “I think the applications (for the service) are almost endless,” gushed panelist John Dillon, chief executive of cloud platform provider Engine Yard. “I was blown away by that one.”

Another cloud service panelists found impressive was Switzerland-based Koemei, which transcribes online video and audio. The transcription shown was multiple times more accurate than Google’s similar service. “The accuracy was really high,” Dillon noted. But Price was concerned about the intellectual property rights. If the company didn’t license its technology from an established voice-to-text software maker, such as Nuance Transcription Services, then there could be a problem in the future. “I love the application, but if they’re licensing Nuance, that’s one thing. If they’re not, then I’d be concerned about what their intellectual property rights are,” he said.

Infographics Are Hot

Finally, Washington, D.C.-based Knoema jumped on the hot trend for infographics. The service can slice and dice data gathered online and use it to present simple infographics. The startup has already collected more than 500 data sets on various topics that users can query. Users can also upload their own data. “It’s one of those businesses that could have increasing returns as more people use it and more people share data, add abstractions on it and analytics,” Price said. “I thought it was an impressive product.” Other observers were concerned that like Wikipedia, Knoema might have difficulty in maintaining the reliability of its data.

And as with many other startups debuting at DEMO, it’s not clear how Knoema will make money. “It’s one of those businesses where there could be a very good premium model,” Ping Li, partner at Accel Partners, offered hopefully.