Key Themes from TC Disrupt SF 2011

I tried to capture all the big themes I saw from TC Disrupt 2011 SF.

TechCrunch Disrupt 2011 is over. After three days of launches, pivots, interviews, and demos, I’ve finally had a chance to catch up on sleep and digest what just happened. In no particular order, here are my thematic takeaways from this year’s conference:

Day 1

1) The Mobile Picture Wars Rage On: I was naive to think the mobile picture-sharing wars started and ended last year, with Instagram the winner. Not so fast. Location-based check-in company Gowalla, struggling to keep up with Foursquare for mindshare within a market where the value of a check-in is being called into question, smartly transformed into more of a socially-curated travel guide (around location and pictures). Blogging site Posterousstruggling to keep up with Tumblr, refocused to launch “Spaces,” focused more on public and private sharing of pictures and video within various groups. (Incidentally, Tumblr could become competitive with Pinterest as it keeps growing.) And the camera wars continue. A new site by Eric FengErly, seeks to organize pictures around experiences. Sequoia Capital partner Doug Leone went on the record about their investment in Color, which is set to release its next photo app, Blue, with deep sharing ties into Facebook, which is rumored to be building its own dedicated picture app. Twitter made a brilliant move to aggregate pictures around user accounts with a viewer reminiscent of (picture tagging within Twitter, from Path), which I believe is still the most beautifully-designed picture app of 2011 but has not really stuck yet. Maybe even Caterina Fake’s stealth startup, 2bkco, may as well also leverage mobile pictures, as after all, she is a founder of Flickr. Mobile photo-sharing remains a very competitive space and, at least for now, may present that elusive “thin edge of the wedge” with which a new startup can breakthrough and build a social network.

2, Mobile Applications versus HTML5: During a discussion with MG SieglerTom Conrad of Pandora and Andrew Stalbow of Rovio (maker of Angry Birds) discussed thought processes for building applications for new and emerging platforms. The bottom line is that both companies, which are two of the most downloaded apps ever, are committed to building for platforms where users reside. It’s about the users. If a bunch of users end up on Windows Mobile 8, expect Pandora to be there, too. At the same time, Conrad suggested that experiments with building HMTL5 applications (that could become the “lingua franca” across multiple platforms) is a possibility, too, though it is not just there yet. Qwiki announced a new editor and numerous HTML advancements to its platform, some of which are entirely new. While the benefits of developing in HTML5 are obvious for developers (lower costs, more efficient, and skirting app store rules), the costs to users among many designers and developers could be high enough to warrant caution in some cases , especially on the iOS platform. On the few HMTL5 apps I’ve used, the experience just isn’t the same (or even close), and developers may end up thinking twice about this path on certain platforms. It will be interesting to monitor how much technical advancement can be achieved in HTML5 and if users could, in some cases, be indifferent between these experiences on mobile.

3, The Moskovitz Manifesto: I don’t know much about Dustin Moskovitz (other than his co-founding of Facebook and Asana), but it was fascinating to hear him speak with Erick Schonfeld about his views on the startup ecosystem. It’s worth watching the video, but briefly, after logging seven years in the Valley to date, Moskovitz believes that the current startup ecosystem, where early-stage money is so accessible, is driving founders to build companies based on narrower value propositions, so much so that it’s becoming difficult to find the right talent because its dispersed. He even speculated that had Facebook been founded in 2011, he wasn’t sure if the company today would find the right talent to execute on the vision. Moskovitz also believes that ex-Facebook employees who are now founders are often driven by a common ethos to build a lasting company, as opposed to building to sell, even if that presents mildly irrational risks along the way. I was impressed with his willingness to speak his mind given his quiet profile.

Day 2

4, The Emergence of “Labs” Companies: Milk co-founder Kevin Rose, a successful angel investor (and investor in @CrunchFund) and founder of Digg, sat down to chat with the Michael Arrington. As you’ll see in the video, Rose is careful to warn that Milk’s first mobile offering, “Oink,” will be followed-up by two to three others, and honorably recognizes that no one really knows how app launches will do in such a rapidly moving, competitive environment. I have noticed a larger trend of newer mobile companies adopting the “labs” nomenclature, which I believe softens expectations around big initial launches and signals to investors, the tech press, and early adopters that their endeavors are very much experiments and to expect more of them in the eternal quest to build that killer app.

5, The Lean Startup Debate: The rise of the “Lean Startup” movement has both inspired a huge cadre of developers to build quick and iterate fast, yet has also generated a tiny backlash (the “fat startup“) and raised the eyebrows of some of the Valley’s most successful investors, such as Keith Rabois, who recently tweeted in response to a question inquiring about the number of successful Internet companies using this method: “there are none.” The movement’s current figureheads, mainly Eric Ries and Stanford’s Steve Blank, bring droves of research projects and years of experience in the industry. Ries took the stage with Intuit founder Scott Cook and Instagram founder Kevin Systrom at Disrupt. This movement has struck a chord with technical founders in particular, perhaps partly because this methodology provides a basic business operations and management framework to those who don’t have those types of experiences to draw from. Of course, I’m drawing generalizations here. On the flip side, I’ve talked to some investors and entrepreneurs who feel constrained by this level of thinking and want to start big, right off the bat. As is the case with most things, the truth probably lies in the middle and is best applied on a case-by-case method rather than a system of belief.

6, The Evolution in Investor Marketing: By now, everyone knows that investors, both individual and institutional, are tinkering with ways to market themselves to entrepreneurs. They are blogging more, participating in social media, attending more events, investing at the seed stage, and staffing up with business-related professionals (and professional ad-hoc networks) to keep up with the times. These manifest themselves in different ways. During the conference, for instance, Vinod Khosla bemoaned being called a venture “capitalist” and prefers “venture assistant.” He also believes many investors are primarily driven by “doing deals” rather than helping entrepreneurs. You have to hand it to Khosla, who is undoubtedly a successful venture capitalist, and there’s no shame in that. The top firms continue to invest in the early stages, with investors from Charles River VenturesAccel Partners, and Google Ventures saying as much. A year ago at Disrupt, Greylock Partners announced its early-stage Discovery Fund, and this year, Shervin Pishevar announced a new “Talent Fund” with Menlo Ventures. Both of these vehicles exist to allow institutional investors to invest more quickly in interesting early-stage startups. The next day, Benchmark Capital partner Matt Cohler sat down with Arrington to discuss his latest investments, a few of which are overseas, such as Peixe Urbano (Brazil). He has also been visiting Berlin, which he believes is a good place for startups. Some investors prefer (for various reasons) to invest close to home, and some investors are looking outside Silicon Valley and slowly outside national borders for those unique opportunities.

7, Cutting from the Edge (of the Garden): Investors often say they want to see more bold, seemingly-impossible concepts. Well, here you go: During Tuesday’s Startup Battlefield, one of the presenters was Grow the Planet, at first a seemingly strange startup for Disrupt (a social network to help you grow your own food), but after some reflection, it struck me as one of the most unique concepts during the whole event. I’m not saying they’ll turn into Zynga, but as judge Chi-Hua Chien casually remarked after the demo, they’ve sort of “created Farmville for farming, in real life.” The idea of tending to backyard and community gardens is slowly spreading across the nation, ever since U.S. First Lady Michelle Obama made this one of her key issues in promoting good nutrition. I’d recommend watching the video, too. After the demo, Chien offered advice: briefly, he encouraged the founders to think about how to (1) partner with local service providers to help with buying garden supplies and installation, and (2) connect with local restaurants who want locally grown produce from excess supply. Now, this is a new spin on “online-to-offline commerce.” No promises that this company gets there, though many hope they do, and I think the interaction between Chien and the founders highlights the importance of entrepreneurs finding the right investing partners who can help stretch their business ideas and also pushes back against some of the current prevailing gossip winds that investors are only good for their money.

Day 3

8, The Promise of Facebook’s IPO: Expect the anticipation of Facebook’s IPO to slowly grow as the year ends. Two of the company’s most prominent leaders, Gokul Rajaram and Mike Schroepfer, visited to discuss product, engineering, social ads, and a range of other topics. In the last few months, Facebook has changed course on “Places” and “Questions” yet rolled its Beluga acquisition into a super-slick iOS messenger. At the same time the Facebook execs were on stage, there was some press speculation that  Facebook wants to delay any IPO until September 2012, possibly later, though there were conflicting accounts. Booking around $3b in annual revenue, the social network isn’t under any immediate pressure to file, except for pent-up demand among vested employees and investors. The IPO expectations are rising, and no doubt Facebook is just scratching the surface of what it can potentially do, but there will soon be more and more pressure on Facebook to live up to those expectations, even if they have been inflated unfairly by others. Whatever Zuckerberg ends up doing, he may want to send a message to troops that there’s more to build, or perhaps he feels that with revenues growing, social ads not exactly figured out, that it’s better to refocus and make sure that whenever the IPO hits, all the loose ends are tied up.

9, An Angel Gets His Wings: Some of the most successful super angels (or micro-VCs) like Dave McClure (500 Startups), Josh Felser (Freestyle), Aydin Senkut (Felicis), Jeff Clavier(SoftTech), and Ron Conway (SV Angel) engaged in an interesting, sometimes rambling, discussion with new club member Mike Arrington (@CrunchFund) about a range of topics. Even though some of these topics are obviously worn out, it’s worth watching the video. In particular, there’s a detailed discussion about uncapped convertible notes and the entrepreneurs who are able to negotiate for those kinds of terms, even though it presents more risk for early-stage investors who are already taking great risk. Second, Arrington raised an interesting question about the difference between a super-angel investment (which sometimes requires a product or traction) versus the truer sense of angel investing, from family, friends, and those who have been successful in the industry and community. What’s clear from the video is that even though we tend to lump super angels into one investing class, they are all very different, are driven by different signals and investment theses, and therefore, should be approached differently by hopeful entrepreneurs.