What’s the value of the TechCrunch50 conference for an entrepreneur? I attended the 2008 show and here’s my thoughts.
If you don’t know, TechCrunch is the most active publication focused on investment in the web startup community. In an earlier century, it would have been the leading trade magazine for Internet entrepreneurs and investors (that is, it would have been Red Herring). It’s 2008 now, so it’s a blog. The publisher of TechCrunch, Michael Arrington, has organized a series of events to showcase outstanding web startups, with the collaboration of the Internet entrepreneur Jason Calacanis. The two day event in September 2007 was named TechCrunch40; the three day event in September 2008 was named TechCrunch50. In 2009, TechCrunch50 will be held September 7th to 10th.
The format is something like a “battle of the bands” (or “American Idol”). About one thousand startup companies applied in June 2008 and were evaluated in a series of elimination rounds by TechCrunch staffers and affiliated experts. Fifty-one companies were selected and given the opportunity to make an eight minute pitch in front of a panel of well-known investors and experts and an audience of 1700 angel investors, corporate and venture capital investors, influential bloggers and media people, plus assorted students and other web startup entrepreneurs. At the conclusion of the presentations, one company was selected by the panel of judges to receive a “best of show” $50,000 prize.
In addition to presentations by 51 web startups at TechCrunch50 in 2008, there were several content panels and “working lunches” with subjects such as “Mastering the Top 3 Challenges of the Start-up: Financing, Recruiting and Customer Acquisition.” Like other conferences, the content panels and lunches tend to be only as strong as the invited panelists, and in some cases, the panelists seemed to have been invited only because they were well-known (or friends of the conference organizers?). In general, the content panels and lunches were not as educational as they could be, with only a few useful takeaways for entrepreneurs, and not worth the price of admission. In comparison, the focus on educating entrepreneurs is stronger at Seedcamp; maybe TechCrunch will improve the education component in future years.
In addition to the series of company pitches in the main hall, there is a sideshow called the DemoPit that runs concurrently in the venue’s entrance concourse. The DemoPit is where the action and the opportunity lies for web entrepreneurs. The DemoPit is like a tradeshow on a microscopic scale. There are about a hundred cocktail tables set in four rows, with representatives from the previous year’s TechCrunch40 alumni, the 51 web startups “in the cut”, plus about 130 semi-finalists: companies that were not selected from the applicant pool but were offered the option of showing their company in the DemoPit.
The DemoPit is absolutely fascinating. Each day the exhibitors are different because TechCrunch only gives the semi-finalists one day each in the DemoPit (perhaps to optimize the number of semi-finalists who are given exposure). Among the 51 web startups on stage and the 130+ “also-rans” in the DemoPit, you get to see a fascinating cross-section of the most innovative and ambitious startup companies launching on the web this year. You can get an in-person demo from each startup’s founders, learn where they see a market opportunity, ask about their development process and funding story, and see the future of the web displayed in one large noisy room.
Ultimately, the $50,000 prize is not what TechCrunch50 is all about. The opportunity is to become part of a community of web startup entrepreneurs and investors. And the DemoPit is the heart of it.
What does it cost to attend?
This is a very expensive conference (probably because most of the paying attendees are venture capitalists who presumably can afford to pay to see a well-screened selection of possible investment opportunities). Admission is $2,995 for anyone who does not qualify as a student, volunteer, or member of the press.
If you’re an entrepreneur and your company is selected among the fifty companies that will make pitches onstage, there is no cost to attend. To TechCrunch’s credit, this is not a “pay to play” event for the selected companies. Recognize, however, that few companies are in a position to apply and be selected. You must be a web startup; your site must not be publicly launched; and you must be far enough into development to present a credible demo to the TechCrunch evaluators. In all likelihood, this means your company already has angel investment of $100,000 or more; you’ve been actively developing your site for six months or more; and you’re close to launch. (How Much Money Does It Take To Be A TechCrunch50 Finalist?) If you’re ready to launch, you’ll have to decide whether to delay launch and use the TechCrunch event as a launch promotion opportunity.
If you are not likely to make the cut as a selected company, it is still worthwhile to apply so you have an opportunity to participate in the DemoPit. You’ll have to pay for a conference ticket ($2,995) and you’ll have the opportunity to show your company for one day on a cocktail table in the DemoPit. This is ideal for many startups. You can be part of the conference excitement, getting coverage from the media, and joining in the conference networking with more visibility than you would have as an ordinary attendee. If you are self-funded, this might be where you meet an angel investor; if you are angel-funded, this might be a chance to raise your your Series A financing round. There are very few events that will give you better exposure to web investors.
If you want to set up a table as an exhibitor in the DemoPit and you are not an applicant semi-finalist you’ll have to pay $10,000 for a full exhibitor package. Not many companies opt for this; I saw one recruiter and a few technology service companies in this category.
If you are a student with web startup entrepreneurial ambitions, it only costs $149 to attend. Put the airfare on your credit card, sleep in an alley, and don’t miss the opportunity. There were dozens of students at TechCrunch50; kudos to TechCrunch for making it possible for them to attend.
You can also attend as a volunteer. If you have desperate ambitions to launch a web startup and $3,000 is more than you can afford, you may be able to sign up with TechCrunch as a helper and get a sense of the environment of web startups.
Should you participate?
Should you attend? Should you participate in the competition? It depends on who you are.
- If you’ve already taken angel investment of $100,000 or more, you’re looking for Series A funding from a venture capital firm, and you are close to launching, apply and hope you make the cut as a finalist. You’ll be in the sweet spot for your launch and further funding.
- If you’ve self-funded your web startup, or you’re early in development with angel funding, apply and grab the opportunity to participate in the DemoPit.
- If you are a student with web startup entrepreneurial ambitions: It’s the best bargain of your educational career, so don’t miss it.
What can you expect?
- If you’re a web entrepreneur or investor, you’ll find more of your peers here than just about anywhere else.
- You’ll see the leading edge of web innovation and glimpse where the smartest entrepreneurs and investors see the market opportunities.
- You’ll see fifty founders pitching their companies to a panel of expert investors and advisors. You’ll see a few great presentations and some that could use a lot of improvement. Hopefully, you’ll learn to refine your own.
- You’ll hear a panel of expert investors and advisors asking questions and offering critiques following the presentations by the company founders. You’ll learn what questions to expect from investors and how to respond appropriately to suggestions and criticism.
- You probably will not be selected as a finalist (among the top 50) if you don’t already have significant investment and a well-developed product. But you can still get into the DemoPit.
- If you are a finalist, you probably will not be selected as “best of show” unless there’s already a buzz about your company in the startup investment community. Don’t be naive. Any company that is going to stand out among dozens of well-funded startups is already known among the most influential investors and analysts in funding circles. Chances are the founders are already known and admired for previous successes. They’ve worked their way to prominence in the ecosystem and the “best of show” award is further recognition of their abilities. Don’t focus on the “best of show” award. It makes for great publicity but it’s not the reason to participate in TechCrunch50.
What not to expect
Some aspects of the TechCrunch conference are more like an enormous user group meeting than a professionally-run conference. People accept it as part of a youth-focused startup culture, though, where making deals in dive bars and writing code in coffee shops is part of the fun. If you go, leave typical conference expectations behind and enjoy the charm of the startup culture. After all, like startups, home-brewed conferences like these are often more satisfying in their early days before they get bought out and run by a corporate parent.
In summary, this is a chance to immerse yourself in the web startup atmosphere for several days. If you’re self-funded, it will burn up a good chunk of your financial resources but it may yield the connections that get you to success.