Wherefore Art Thou, Austin Investors?

Back in November of last year, I wrote an energetic post for this site that in essence introduced me to the Austin tech scene. I was an emerging tech analyst that wanted to meet every startup in town! I wanted to hit every happy hour! My enthusiasm was a little frightening!

Fast forward seven months and I’ve developed encyclopedic knowledge of the city’s coffee shops. I’ve met a bevy of entrepreneurs, a smattering of local tech-focused organizations and a sprinkling of investors. I’ve become so inspired by the entrepreneurial spirit that I’m finally pulling the trigger on my own business. In short, I’ve become more secure in the knowledge that the Austin tech scene is one of the most vibrant in the nation, a fact bolstered by a continuous flow of lists that place us at the top – Forbes’ second Most Innovative City in the US and Kiplinger’s Number One City for the next decade (“arguably the country’s best crucible for small business”), to name a few.

But – and you knew there was a ‘but’ coming – everyone in town wonders where the Superstar is: the tech company that starts in Austin, is funded by Austin, and whose successful exit brings the cache that will solidify Austin as the Silicon Valley of the 21st century. (And make no mistake, that is in our grasp.)

Doesn’t it seem like we’re perpetually *almost* there, standing on a precipice with our toes hanging off? Are we waiting on some nebulous event to occur? Or can we propel ourselves into that elite status on our own terms? My hope is the latter but my fear is the former.

In order for Austin to produce a Superstar and therefore prove our savvy as a nurturer and picker of winners, we need three sectors fully participating and on board with the entrepreneur mentality: entrepreneurs (check), organizations (over-check), and investors (begin new paragraph).

Look, believe me, I know. I’ve been around long enough to know that the startup ecosystem doesn’t exist in which entrepreneurs don’t bitch about investors. There will always be more ideas than money. Period. But there’s a level of frustration toward the Austin investor community that should be acknowledged and addressed. Austin entrepreneurs are increasingly flying to Silicon Valley to seek investment, after months of futile conversations here in town. I won’t give specifics for obvious reasons, but in the last month alone I’ve talked with three startups – innovative, viable startups with real revenue paths – that have given up on Austin money and are in talks with Valley investors. One founder is so frustrated, he’s about to move to the Bay Area. He’s been looking for $200,000 for a year (!) and says it’s time to move on to “people who get it.” That, my friends, is one depressing sentence.

If the hundreds of conversations I’ve had the past 7 months are any indication, I’m not making any earth-shaking pronouncements. So how do we fix this? How do we bridge the disconnect that lies between two very important sectors who very much need each other?

I think the answer lies in that middle sector I mentioned a bit ago – organizations. We’re a city that loves gathering together and it shows in the number of groups that focus on startups. Bootstrap Austin, TechRanch, Conjunctured, Austin Technology Council, Capitol Factory – just check out this list to save my keyboard. We need a coalescence of these groups toward a common goal – integrating the folks with money comfortably into our world. I may be naive but I suspect that productive exposure to the energy of Austin entrepreneurs can only result in more meaningful relationships for everyone.

I’d go so far as to suggest an overarching board or council, one that includes representatives of every sector in the community and works toward no other goal – including profit – but nurturing and producing Superstars. What if we took that list linked above and invited one or two people from each organization to a brainstorming meeting? Would you come? Am I thinking too broadly?

A savvy entrepreneur recently told me, “Austin investors won’t start taking chances on consumer internet [companies] until there are multiple losses – big exits of Austin companies who have Valley money.” I suppose he’s right but I wish he wasn’t. I wish we could fix this problem ourselves before the Valley fixes it for us. A startup scene in which one sector assumes all the risk is one that will not sustain itself. So why not take the plunge and all assume it together?

Panels Not to Miss at SXSW

If you’ve been to SXSW before, you’re well aware of the glut of panels and parties. There is simply too much to do and too many places to be at once. The conference tries to alleviate the hectic nature with some pre-planning, offering the ability to build your own schedule on their website. But the technology is clunky and laborious; I know my eyes started to glaze over pretty quickly. So in the interest of preserving your sight and sanity, I thought I’d share some panels that jumped out at me.

Friday, March 12

2pm – If you’re an out-of-towner, check out Why Austin is the Killer App. Bijoy Goswami gave an abbreviated version of this talk at Ignite Austin and it’s one of the best encapsulations of the Austin tech scene that I’ve heard yet. It’s the perfect way to kick off your SXSW adventure.
3:30pm brings our first where-to-go-now decision (it won’t be the last) with three strong prospects

-Do Cool Kids Leave When the Suits Arrive? – Would love to see revenue/business models re-enter the social media conversation. We’re not earning money with our smiles.

-How Your Brand Can Succeed in the New Web – From a man who knows, Brian Solis

-Is Technology Weakening Interpersonal Relationships? – One of my favorite ATX tech women is on the panel, Jenn Deering Davis; I know she’ll have great insights. And this is a potentially volatile topic.

9pm – If you have a Gold or Platinum pass, join me at the premiere of the Bill Hicks documentary, ‘American.’ And if you don’t know who Bill Hicks is, I can’t help you.

Saturday, March 13

This is likely the least hungover you’ll be during your time in Austin, so take advantage of it with a 9:30am panel, Innovation Overseas: The European Startup Environment. Marten Mickos is sure to provide some interesting perspective

2pm – Opening Keynote: Danah Boyd. Happy to see a woman kicking things off in the keynote presentations. And interested to hear her insights on being publicly private in social networks. Or privately public.

3:30pm – Another good problem to have – Media Armageddon or Ze Frank? The juxtaposition is glaring: old media or web pioneer? I may hop between the two.

5pm – How To Spark a Movement in the 21st Century, from the folks at Meetup. Could be really thought provoking. If it isn’t, you’ll find me at one of the happy hours.

Sunday, March 14

Things look a little uglier this morning. You’re feeling the multiple happy hours from yesterday. And there’s a gauntlet of panels to face today. Rub some dirt on it, as my father used to say, and get back in the game.

9:30am – Get those synapses firing with some heady fodder: Exploiting Chaos or Story.Next with Dr. Sanjay Gupta (he’s famous!). The Adobe Sunday Brunch is also at this time, so you can refuel with breakfast tacos as needed.

Four excellent sessions at 11am:

-2009 Iran Election will hopefully settle an ongoing argument I’m having about social media’s true impact on real-world events

-Monkeys with Internet Access because I’ve been wanting to hear Clay Shirky.

-Online News of Tomorrow because I like Jeff Jarvis

-Yes Mr. Lessig, We Can Change Politics (11:20am) because I’m a political nerd

12:30pm – Though it’s clearly on the film track, A Conversation with Michel Gondry is listed in Interactive events. One of the most innovative and creative minds working today – a don’t miss.

3:30pm – *Cue self-serving segment* Beyond Algorithms: Search and the Semantic Web. Reasons to attend: I’m on the panel and have a history of arguing with Barak Berkowitz. And I’m clearly the least accomplished person in attendance. Check out the bios of my fellow panelists.

6pm – Get your geek on at the Data Cluster Meetup before you head out into the night. Sponsored by Rackspace, Infochimps, Wolfram Alpha, and Factual.

This is the best party night of the bunch, so go forth and enjoy. Mashable, PBS, Guy Kawasaki, Gowalla, Microsoft – hope you trained your liver last night.

Monday, March 15

I won’t lie to you – this morning is going to hurt. I’ll leave a bottle of Excedrin and a bag of breakfast tacos for you by the t-shirt stand downstairs.

If you can manage a 10am, go easy on yourself and check out The Art of Eating In. But if that’s too early, go to Making Content Relevant To Me at 11am.

Gary Vaynerchuk is talking at 12:30pm. I have no idea about what but it’s sure to interesting.

Then Ev Williams has the keynote slot at 2pm. Let’s gang up on him and force him to answer revenue questions.

3:30pm brings our last where-to-go-now conundrum (Thank God – I’m getting weary)

-‘Seed Combinators’, with favorite local Josh Baer

-AI 2010 because I’m a sucker for robots

-My Three-Year Old is My Usability Expert, because this seems a fascinating topic.

Did I say Sunday was the best party night? It might actually be Monday. Wired, Rackspace, TechKaraoke, GeekyBeach, Gowalla – even New Orleans is throwing a party tonight.

Tuesday, March 16

Last day! It’s a short one too so hang in there.

11am – The Chaos Scenario. Because I’ll listen to pretty much any NPR contributor. And because we’ll all be intimately familiar with the concept of chaos by this point.

2pm – Daniel Ek of Spotify gives the last Interactive keynote, in an interview with Eliot Van Buskirk.

There’s a closing party at 8pm. And then we all meander back into the real world, hopefully sharper, wiser, and only slight worn down at the edges.

ATX Tech Women Happy Hour This Thursday

A few weeks ago, I participated in a panel at Semantic Web Austin that discussed open data initiatives and how the City of Austin might benefit from incorporating such a philosophy around its data. (If you want to know more about this idea, check out Juan Sequeda’s recent post on this blog.) It was an excellent discussion and I was fortunate to connect with some of the Austin tech scene’s most innovative minds.

One of the more interesting facets of the evening for me, however, was the make-up of the room. The new Texas Coworking space was packed – and not a fellow female in the bunch. The immediate effect was so striking that my first words upon arrival were a Tourettes-like exclamation of, “Holy crap, I’m the only woman here.”

I felt a bit conspicuous but it certainly wasn’t new. I suspect most women in tech have experienced this at one time or another. It’s a male-dominated field and you grow accustomed to having the restroom to yourself at conferences. It did, however, emphasize the need for an idea Stacey Higginbotham and I had thrown around – a gathering of tech women in Austin.

Though I’ve heard rumors of national organizations with chapters here, I haven’t seen any accompanying events. And with all the sharp women I keep running into locally, it seemed a no-brainer.

So Stacey and I are hosting a little get-together this Thursday at Union Park, to gather women in the Austin tech scene and brainstorm on what type of group we could all create. It’s very much a crowdsourced approach, so bring your brains and your motivation. Please RSVP at the Tweetvite. Look forward to meeting everyone!

Foursquare vs Gowalla

Since I moved to Austin in October, Foursquare’s game of location-based tag has held my interest, allowing me to familiarize myself with the town a bit better and connect quicker with people in the tech scene. I hadn’t yet experienced the a-ha with it though. So when I heard of Austin-based competitor Gowalla, I was willing to give it a shot. Even more so when news hit of its $8.4M funding round; if investors on the level of Greylock are handing it money, something’s afoot in this sector.

The two services are virtually identical, asking users to check in via their cell phone at spots around town. Foursquare awards mayor-ships and badges for frequent use, while Gowalla scatters pins and offers items to drop at locations. (For a closer look at feature sets, check out Josh’s recent post.)

Why would one do this? Well, it’s a bit like Twitter, in that you don’t get it until you’ve tried it. But the overall philosophy is to create a network of known places in a town, allowing users to find each other on the fly and leave tips and deals about certain spots.

To conduct my due diligence, I reasoned that a thorough test over the holidays made sense. I’d be in several different cities and could put both services through the ringer. I lasted one weekend. The comic effect of sitting in my car everywhere I went, bringing up two apps and going through the steps to check in, was simply too much. And I’m positive it was annoying for those who are friends with me on both services.

On Saturday afternoon, I took my daughter to The Nutcracker at the Long Center. Gowalla couldn’t find my “passport” (user account) as I sat in the parking garage so I abandoned the pursuit; my 4-year-old was protesting, “Mommy, what are you doing? Let’s go!” During intermission I tried again, this time with success. After checking in, the service asked me to “drop” something. Drop something? What the hell does that mean? Who’s going to pick it up? I chose a Beatnik Poet, clicked the ‘notify Facebook’ option and moved on. No idea what happened to the poet; hope an item with disparate philosophies isn’t harassing him.

The rest of the weekend went about the same, with Foursquare getting the bulk of the check-ins. Only when I had a bit of downtime did I use Gowalla. I simply didn’t see the point. I have more friends on Foursquare, know the interface better and get the rules of the game. In this regard, Foursquare wins hands-down; it’s easier to get going and immediately understand. Gowalla features several catchwords that I haven’t parsed yet: pins, stamps, item drops, etc. If it’s going to spread effectively to consumers, the service needs to be easier to jump into cold.

Foursquare has its negatives of course. An annoying Twitter/Bit.ly conversion bug results in the posting of mayors’ pictures on my Facebook page. So when I’m having coffee with a friend at Once Over, the accompanying image in my newsfeed is of a random stranger. (Foursquare is aware of this, but blame Twitter and say they can’t fix it.) Adding a Facebook notification feature would partially solve this problem. And its process for adding new locations is unnecessarily complex. Seems to me it would be easy enough to pull addresses from Yelp or a similar service so that you’re not required to input all the data on your own.

But at the end of the day, I’m sticking with Foursquare. It simply has the leg up. Not fair perhaps, but until Gowalla tempts me with particularly engaging and notable features, I don’t have a compelling reason to shift all my friends and energies.

And here’s the thing: this is a space that is going to merit our energies in the coming months. Take a look at these two recent posts and note the common thread: Yelp. The primary competitor for Foursquare and Gowalla isn’t necessarily each other; it’s Yelp. And Om is right on the money that Yelp should be worried.

Yelp is currently my yellow pages. I use it in place of Google for all local business searches. But its personal reviews and ratings lose any attraction if I have a catalog of recommendations from trusted friends on an alternate service. And that’s where Foursquare/Gowalla/Bobs Yer Uncle is going to win. Did Yelp walk away from Google because they’re smart enough to recognize this? Are they planning their own acquisition? Or were they foolhardy, thinking they’ve got a lock on a market that is sliding out from under them?

I’ve had pneumonia the past month so haven’t been much for drinking. When friends came over this weekend, we joked about when I would start testing my liver again for the holidays. Finding myself at Chuy’s last night with my family, I did a quick check-in on Foursquare. Five minutes later, that friend texted me, telling me that Chuy’s mojitos were excellent and a perfect way to inaugurate my holiday imbibing. (She was quite right.)

I suppose I could’ve powered up the Yelp app at the table, searched for Chuy’s and paged through the reviews to find drink recommendations. But no one on there knew my background, my drink tastes, my prior conversations. The power of linking businesses to personal networks, and exploiting those personal connections without being intrusive, has been a nut that’s needed cracking for some time now. Foursquare and Gowalla have cracked it. Whether the market is big enough to hold both of them remains to be seen.

The End of a Trend

Originally published on Guidewiregroup.com

I don’t like Twitter. I’ve never been coy about that. When it first launched, I thought, “You’ve got to be kidding me.” When it exploded in use, I thought, “This too shall pass.” When Ashton Kutcher sent a picture of his wife’s ass to the world, I thought, “We have reached the point of no return.” And yet, here we still are. Oh sure, I tweet. I’m an emerging tech analyst; I have to. But I’ve never been happy about it. If Twitter disappeared tomorrow, I’d be quite content. And several events over the last week left me wondering if we are indeed watching a technology fold in on itself. Is Twitter about to jump the technological shark? Or has it already? The evidence:

1) They’re boring me. A friendlier home page. A new Retweet button. The ability to make lists. The new features rolling out of the Twitter factory recently are incremental and yawn-worthy. Take the newest update, Twitter Lists, which allows users to build dynamic lists of people, grouped however their hearts desire. My non-techie friend @poliepete said it best: “Can’t you just create groups in Tweetdeck?” He’s got a point. There are a couple of small differences – these lists are public and other people can subscribe to them – but otherwise it seems another exercise in technosphere ego-stroking. Though Robert Scoble posits that the introduction of lists means no less than the end of numbers as we know it, my experience was anti-climatic. I cherry-picked a few people from lists created by others, but haven’t followed any list as a whole. It took me a long damn time to get my Tweetdeck right where I want it and I don’t need other people with disparate interests mucking it up. So a feature that caused a minor stir for a bit seems to have already faded. You can now group like-minded people together in Twitter. So what?

My point: Twitter isn’t exhibiting a desire to evolve. For a product that has achieved such explosive growth since its launch, it sure seems happy to rest on its laurels. It’s as if the sole difference between the first-gen iPhone and the 3GS was the ability to tag your contacts. Granted, the iPhone is about $300 more than Twitter, but free shouldn’t equal lack of innovation.

2) The kids aren’t using it. This is a point of contention among many. Depending on which survey you’re reading, Twitter use is either growing or receding among the youth of today. No one can seem to get a straight answer out of these kids. The Associated Press ran an interesting exercise in confusion a couple of weeks back, in a piece that I’m still trying to figure out. Titled, “Grudgingly, young people finally flock to Twitter,” the article states that the younger generation hates Twitter. But they use it to follow celebrities. Sometimes. Unless they don’t.

“Quite frankly, I don’t need to hear if someone stepped in dog poo on the way to class or how annoyed they are that they lost their favorite pen,” says Carolyn Wald, a University of Chicago junior who has not joined Twitter and rarely posts status updates on Facebook because “I don’t want to assume that people want to hear those things about me, either.”

I like the cut of your jib, Carolyn. Can I friend you on Facebook?

What was even more striking to me, though, was a little tweet (yes, I get the irony) sent out by my friend Laura Beck. She heads up the Porter Novelli Austin office and sent out the following last Thursday:

Btw, taught 2 mktng classes @ tx st wed, 60 kids, jr/sr, NONE use twitter, all think for us oldies. Interesting

To translate from 140-character speak, Laura taught marketing to 60 college students and not a single one of them used Twitter. I’d say sixty kids is a pretty good sampling; hell, major political decisions have been made on less.

My point: Twitter should be worried about this. They should be worried that Carolyn Wald thinks it’s only for dog-poop updates. Trusting that a technology – one that hasn’t had a major upgrade in feature-set, design or philosophy since it’s launch three and a half years ago – will somehow settle into a generation as it ages is a risky proposition.

3) The spammers are taking over. I don’t know about you but Twitter spam is starting to drive me batty. I blocked more than 50 people this past week alone, some of which sported some seriously gross profile pics. Even more fun, I attracted topic-specific spammers from certain tweets. After tweeting that I couldn’t decide between eating a cream-cheese-loaded bagel or yoga class (I never said my tweets were thought-provoking), I received a follow from “Health & Wellness” within minutes and Philadelphia Cream Cheese within the hour. It felt creepy and slightly stalker-ish. I’m in no way the first person to say this but Twitter still doesn’t seem to be listening. They must remedy the spam problem.

My point: Twitter is teetering on the edge of becoming one giant commercial. Just today, CoTweet announced a $1,500/month service for enterprises that allows major brands to store data about customer interactions on Twitter, as well as analytics that show their reach. In other words, it’s about to get much easier and more beneficial for Philly Cream Cheese to keep track of your bagel consumption.

4) So are the jerks. In an absolutely fantastic piece for TechCrunch, Paul Carr tells us the story of Tearah Moore, a soldier based at Fort Hood who tweeted during the horrific attack last week. This being Twitter, Ms. Moore didn’t feel it necessary to censor herself and so her stream is filled with all sorts of expletives directed at the shooter. Fine whatever, be angry at the lunatic who killed your fellow soldiers. What she did feel obliged to do, however, was post a picture of a “guy who got shot in the balls.” As Carr puts it,

“Rather than offering to help the wounded, or getting the hell out of the way of those trying to do their jobs, Moore actually pointed a cell-phone at a wounded soldier, uploaded it… and added a caption. Her behavior had nothing to do with getting the word out; it wasn’t about preventing harm to others, but rather a simple case of… ‘look at me looking at this.’”

My point: Do I even need one after that? No, Twitter isn’t entirely to blame for such gross behavior. But it certainly encourages it by its very essence. And I doubt it’s going to improve. In an age when first-on-the-scene witnesses are valued and utilized by national news organizations, we’re guaranteed to see more detailed and more graphic accounts from citizen journalists.

Wrap it up already! All of this adds up to a trainwreck of a technology looming on the horizon. One abandoned by sane users and left filled with snuff films, porn stars, and marketing come-ons. While writing this, I kept trying to think of an analogous product. One that started out as a pretty good idea but quickly became glutted with crap. The obvious example is email – but it’s far too necessary. Be honest with yourself: if Twitter folded tomorrow, would you miss it? Has it really become a value-add to your workday? Or is it another stream to monitor, another to-do list, another volley of voices to hear?

There is a nugget of value at the center of Twitter that has become lost, even to the company itself. Instead of thinking up new ways for us to pat each other on the back, Twitter needs to hearken back to its days of creativity and spark and give us something useful again. Change our workday, shake up our preconceptions – just do something. Stop waiting around for someone else to do it for you.

Austin Startup Welcomes Carla Thompson to the Team

One of our primary missions here at Austin Startup is to showcase the vibrant tech community and culture here in town, and in the process fulfill our motto of convincing tech entrepreneurs and influencers to “Ditch the Valley, Run for the Hills.” With that in mind, we are proud to welcome new Austinite Carla Thompson of the Guidewire Group to town, and to the Austin Startup team! In her inaugural post for the site, she sends an open letter to the tech community and local startups to reach out and help her get initiated to the city.

Way back in the mid-90s, I trekked to Austin in hopes of finding a job. Armed with a newly minted bachelor’s degree and a stunning amount of naiveté, I was sure I’d find paying work to fund a capitol-city lifestyle of music and barbecue. But as my father used to say, my BA in psych and a nickel would get me… I can’t ever remember how that ends. Point is, I never did find that psychology job and eventually found myself living in the Dallas suburbs.

Well, it only took 15 years but I’ve finally landed in Austin. The reasons for the move are many but a key goal was to surround myself with a more vibrant tech network. I’m one of those lucky bastards, you see, who works entirely from home. My company, Guidewire Group, is based in Silicon Valley and thanks to newfangled Internet gizmos, I don’t have to report to an office to do what I love. There is a downside though, in that you spend a lot of time talking to yourself. In order to stay plugged in to a rapidly changing market – not to mention sane – it’s vital to get out and network. Meet people for coffee, socialize at happy hours, co-work in lively spaces – really any activity that gets me away from the screen and talking face to face with innovators only adds to my insight and expertise. And as an analyst, insight and expertise are non-negotiable.

I didn’t, however, want to jump too deeply into the pool of tech by moving back to Silicon Valley. A key mantra of mine and Guidewire Group’s is to always keep the consumer foremost. It’s far too easy to get sucked into the morass of early-adopter groupthink that seems unique to emerging tech. So living in a city that has multiple focuses, not just tech, was important to me. And, you know, there’s the barbecue.

So here I am, Austin, ready to wade knee-deep into the tech scene. What does that mean exactly? It means I want to meet with startups, as many as you can throw at me. I want to educate myself on the local market, write about you on the Guidewire and Austin Startup blogs, share insights and advice with entrepreneurs, and keep an eye out for companies that would benefit from more focused Guidewire expertise.

I want to get involved with the myriad tech organizations that are popping up around town. Thanks to my friend and local badass Josh Dilworth, I’m already hooked into Austin Startup and am on the advisory board for SXSW’s 2010 Accelerator program. What else should I know about? TechRanch, Conjunctured, Door64 – let’s sync up.

I want to check out the local semantic community. As someone who’s followed the semantics sector closely for several years, I’m looking forward to plugging into what I hear is a thriving scene.

In short, I’ve been locked in a suburban Dallas home office for 8 years – get me out of the house, Austin! Tell me about your co-working spaces, your wine-soaked happy hours, and your up-and-coming startups. I’ll cry uncle when I’m overwhelmed – but that’s likely going to take a long time.

Find me on Twitter, the Guidewire Group blog, or email me at carla@guidewiregroup.com.