Archive for February, 2011

Why Startup Demo Day Is Like The Film Festival

I recently spoke about the process of securing funding and publicity for feature films with one of the producers being nominated for an Oscar at tonight’s Academy Awards. Mitchell Block, a professor at USC,  produced the Oscar nominated short subject documentary Poster Girl with a more logical approach to the business of film than most typical starving artists. Block explained that the commonly perceived “normal” approach to producing a film is to complete it though post-production first, then hope to secure financial backing from the film companies present at one of the various world-renown film festivals. While the majority of highly capable film students and artists take this approach to creating their films, Block emphasized the backwardness flawing this course of action due to the unprobable success rate.

Instead, Mr. Block highlighted his extensive portfolio of various short documentaries as a model for which other budding producers should follow. Block said that every time he creates a new feature film, his first objective is to secure the financial backing from a film studio. In the case of Poster Girl, he leveraged his film industry contacts to submit a shortened and unedited clip of the documentary to HBO, who promptly funded the project. Thus, Poster Girl had received the necessary support from HBO to ensure the proper financial and publicity resources to promote the film once post-production was complete.

This exploration of the film industry with Mr. Block gave me the revelation that startup companies often go through a similar process. Essentially there are a bunch of ramen-eating hackers building their ideas in anticipation that during a “demo day” or launch conference so-to-speak, investors will be lining up at their table with a newly inked check in hand. I view these “demo days” as the film festivals which leave many talented visionaries out of touch with any potential in their product. Instead of spending weeks or months developing a minimum viable product, the hackers should put on their top-shelf thrift shop suit and sell their idea to investors.

With the necessary idea-validation and support from venture capitalists, hackers and founders can then focus on building their vision rather than winning attention at a tech meetup. There is undoubted merit in the application process to events such as TechCrunch Disrupt and Launch Conference, but the future success of all companies on stage is rare. Startup accelerators such as Y Combinator realize this methodology produces stronger startups on average because they are only buying into the ideas that they know will work, and especially sell for a high valuation on their own demo day.


02 2011

Fueling The Fire of Viral Growth

Have you ever noticed the moment when technological change becomes so rapid that it turns a spark into a blazing trail of sharing? This is the precise moment of viral media which makes it so attractive.

Last week I attended an event on the subject of viral media and marketing that brought together some of the brightest minds working in technology from the New York area. Me and my classmates Herwig Konings ’11 and David Merfield ’11 first became attracted to the event hosted at New York University because of the highly relevant topic of viral media which often proposes unbounded questions such as: What makes something go viral? And furthermore: Can ideas and products be engineered to go viral?

The honest truth is that viral media is not something that was created on internet. The earliest forms of viral concepts and ideas started with the advent of Christianity and Islam more than a century ago. Most recently the products and ideas that have experienced benefits of the viral loop have become household names such as Ponzi Schemes, Tupperware, or Livestrong bracelets. Viral marketing efforts offline continue to boost the sales of many common products, but today the most common form of viral media takes place on the internet due to its potentially instant worldwide reach.

Thousands of popular items have experienced viral growth on the internet in the past decade and perhaps the most common category for these items is bored-at-work humor. When there is a simple thing that ordinary people think is funny, many people feel compelled to share the humorous item. For this type of viral media, the content must be free, and the website must integrate well with social services to promote easy distribution. Beyond this merely humorous content that is commonly taking advantage of viral networks on a daily basis, there have been a few internet success stories built upon viral expansion.

Jonah Peretti, a co-founder of The Huffington Post and now CEO of Buzz Feed, has had his finger on the pulse of viral media for the past decade. Jonah mentioned the example of YouTube which earned its core growth from Myspace users who wanted to share videos. After Myspace users defaulted to YouTube as their video sharing service, YouTube became adopted by the majority  of internet users. The most widespread viral expansion of an internet service is Facebook. Without a doubt, Facebook’s hockey stick growth occured due to their first initial users at Harvard and Stanford who realized that they were using a service that they actually cared about. In essence, Facebook created a user experience that gets better the more you and your friends share.

As you might be able to tell by now, there isn’t a secret forumla that creates viral media. For my best explanation on how to deliberately engineer a product or idea to go viral, I would encourage trendsetters to focus on a healthy balance of intensive and extensive growth. Peter Thiel, co-founder of PayPal, explains intensive growth as the process of hard work to drive innovations and extensive growth is the process of scaling to exponential growth. If you have the guts to build a product that embraces the challenge of intensive and extensive growth, then its likely you will experience the fortuitous results of viral media.

Special thank you to Graham Lawlor, founder of Ultra Light Startups and organizer of the event Engineering Viral Media.


02 2011