I’ve been thinking a lot about passion lately — passion for ideas, teams, the shared pursuit of common goals.  More and more, I believe passion is the critical differentiator between really good, and great, teams.  And, at the end of the day, I think passion is what separates the Bay Area from all other pale imitations to the undisputed startup mecca.

I spent the last two days at the 500 Startups Demo Days, where a wide-range of startup companies gave 5-minute presentations describing their mission, progress, funding needs and objectives.  There were three sessions spread over two days, with fairly identical presentations given at each.

In short, I was blown away with the quality of the companies, and more important, the energy, intelligence and focus of the teams.

Dave McClure’s 500 Startups (Disclosure: I’m an investor, advisor, and mentor, and Dave’s a TeachStreet investor, board member, and very good friend. That said, my feedback is direct and blunt.) is a new kind of seed fund and startup accelerator.  Based in Silicon Valley, but investing around the globe, they believe successful Internet startups are born from usable design, customer-focused metrics, and online distribution.

Dave Schappell

They provide early-stage companies with funding ranging from $10,000 to $250,000 via seed investments through their startup accelerator program, and new micro-fund models like the Twilio Fund and d.Fund (focused on designer-led startups).

500 Startups boasts over 120 experienced startup mentors around the world and 10,000 square feet of awesome working space in the heart of Silicon Valley. It is a vibrant community of startup founders.

Demo Days gave a group of their first 100 or so startups investees (invested in just the last 12 months — yes, they’re handing out money in wheelbarrows) a chance to shine.  I came into the event not knowing what to expect.

I was a little worried that there would be a little bit too much Bay-Area-Echo-Chamber-Social-Media-App-iosity, with too little broad market appeal.  And, the recent hype around a startup investment bubble made me even more concerned.

But, within the first few presentations, I started spending less time looking at my laptop, and more time tuned in to the presentations.  And, while I did get the sense that money’s flowing more freely (and MUCH more freely than in Seattle), I also noticed that the teams are doing much more, with much less.

The cost of experimentation is dropping like a rock, and I think the investor rewards will go to those following a diverse portfolio theory, levered by a distributed network of trusted mentors, advisors, and on-the-ground presence.

Below, I rank all of the Startups (yes, all of them), with the disclaimer that it’s only my opinion. It also comes with my own biases related to markets that I don’t like very much, and I’m not really an investor (Of course, like all wanna-be-successful entrepreneurs, I think that my ability to pick winners has to be better than suit-wearing, conference-room-occupying, investing-other-peoples-money, never-built-companies-themselves Venture Capitalists!)

A) Best of Show:

1) Visual.ly — Infographics Automation Studio (built by the Mint.com team. I’m not sure how enormous the market is, but this one’s a slam dunk)

2 & 3) Baydin (email Game) and AwayFind: Priority inbox, done right, for businesses.
Both of these companies are in the e-mail space, and both impressed me. The “email problem” is getting bigger every day, and it needs solving

4 & 5) InternMatch: Helping college students find internships, and vice versa. This business is growing rapidly, and critical to great hiring. & YongoPal: Photosharing to Enable English Language Learning for South Korean/Asian students)
(Disclaimer: I’m an advisor to both of these Seattle startups, but I’d tell them if they suck)

6) 955Dreams: Nnew media publishing company.  Check out their iPad app, “The History of Jazz”.  ’nuff said.  Oh, they didn’t even present on Day 2, as they’d already closed their investment round!

7) SayGent: Voice analysis platform, to help call centers increase conversions. (Think helping Comcast operators KNOW if their customer is really wanting to cancel their service, and to know when to give them upsells.’) Or, “having pollsters know with more certainty the feedback of respondents”

8 ) ReadyForZero: Helping people resolve their credit card debt issues. Massive market, that’s screaming for a non-scammy solution.

9) SpeakerGram: Helping speakers, and conference organizers, find one another — bigger market than people understand, and a great solution.

10) evozMonitor: Data-driven parenting (Runkeeper for Moms/Babies). For those of you who have been following my recent passion for HealthMonth, RunKeeper, WakeMate, Tap & Track, and more, you won’t be surprised that I think this one is also a sure thing.  Mom’s love tracking their baby’s progress, even if it’s to say they’re in the 99 percentile for being a moron.

11) MotionMath: Learning apps that incorporate tactile/motion-based interactions with children. Parents in the crowd were wowed, and the team was really solid.

12) MYGENGO: Scalable translation services, via API, and with open-source plugins.

B: Unsure, but Left me Intrigued.

13) Volta: Helps you weblab/A-B Test your phone calls/sales efforts. This one must be solid, given McClure’s excitement about them (after working closely with team), but I wasn’t wowed by the demo.  It may have been too short to clearly demonstrate the process.

14) CrowdRally: Interesting company that built something that was ‘too good for Facebook, so the big bad FB legal team shut them down.’  Now, they’ve already got some interesting investors lined up for a video sharing service that was so amazing (as a demo), that it makes you think that this one’s gonna be a quick talent pick-up.

15) Ginza Metrics: SEO automation for big businesses. I think I’m just bitter about this industry, after the recent Google Panda/Farmer update, and also a little biased by my love for Seattle’s own SEOMoz (although they play in different spaces).  Probably a good exit, but didn’t seem gigantic to me.  Seemed more like a solid services business.

16) SocialStork: CEO is an amazing guy. Built highly profitable HitGrab, and was also a Canadian Idol finalist!  This is a Facebook for Babies and their Moms/Dads.  I wasn’t overwhelmed because I’ve seen how things can turn out for companies that build on platforms like Facebook and Twitter, and also that there’s a big segment of moms that don’t want their children’s content on the web).  But, given the success of the entrepreneur, it’ll probably do just fine.  Just not my cup of tea.

C) Most Likely to Pivot to an Even More Awesome Money Making Market.

17) Brainient: Turns video ads into engaging experiences, like Mixpo?  I was left confused.

18) WorkersNow: OpenTable for Construction Crews looking to manage Temporary Workers) — because of my experience in the local, non-tech-heavy space, I’m resistant to ideas that require large changes in workflow, by customers who are resistant to technology adoption (i.e. changing habits is hard).  I admit that the market’s probably enormous, but I wouldn’t invest here.

19) Ninua: News, the right way. Friends + Mainstream News + RSS) Their tagline is “News. Life. You.” This space is just littered with failures, and incredibly well-funded, well-managed competitors such as Flipboard, Google Reader, Zite, Trove, and more — that said, they already have 1.5 million users.  And, I don’t :-)

20) Rewardli: Get Rewarded for your Business).  Just not in my interest zone.  But, they have amazing partners lined up already.  Had to do with giving you rewards for your business, and then incentivizing you to recruit friends.  I think.  I think people are getting tired of this.  But I’ve been wrong about so many things.

21) Punchd: Customer loyalty program for Local Businesses, via Smartphones.  May work.  But massive competition with Foursquare, Yelp and many others.  Plus, another behavior change & technical barrier in a land of people very resistant to that (see #18).

22 & 23) All About Wednesday/Wednesdayslunch & SpoonDate.” These were two apps that help people find people to go to lunch/eat with.  I know that I wasn’t fully understanding, but they seemed a lot like Brian Dorsey’s NoonHat. It’s an idea that I personally like, but I don’t believe in the market potential, or the unmet demand.

Remember folks, these are just my opinions.

But what’s amazing about that group is that 16 to 18 out of 23 (70-78 percent) look like very good investments to me.  Even with a give or take of 3-6 (yes, they could ALL make it across), it makes for a remarkable, diverse, far-along group of startups, that I think have a high likelihood of finding profitable market opportunities, and their passion and supportive energy and camaraderie was palpable.

It’s a great reminder for me about where the bar is set for programs like Seattle TechStars and the local entrepreneurial environment.

It’s not just about the demo, but the supportive culture at every stage.  The room was full of press (Rafe Needleman, Ben Parr, VentureBeat, and more), VCs and Angels (Kleiner, DFJ, Sequoia, Morganthaler, CRV, Emergence, Mark Goines), and interested entrepreneurs, 500 Startups Advisors and Mentors.  And if you didn’t notice the noise on the social media squawk box, then I guess you didn’t read this far down anyway.

Onward folks. We’ve got our work cut out for us.

Dave Schappell is the founder and CEO of TeachStreet. Follow on Twitter @daveschappell.

Comments

  • http://blog.sentientmonkey.com Scott Windsor

    I know it’s an uphill battle, but I gotta say I’d love to see Punched get traction and succeed. I love the idea as it solves a need in a clever way. Visual.ly looks pretty awesome, but it will be interested to see if they can meet the demand & scale out.

  • http://500startups.com/ Dave McClure

    thanks for your belief and support dave… and also for helping us uncover some of the best startups out of Seattle. we will return the passion and the love, both here in the bay area and up in the pacific northwest. #500strong

    • Bob Crimmins

      Dave, we’ve never really met but I hope to someday. Your energy, generosity and no-BS approach is a huge value to startups everywhere… and not just the 500 Startups crew. You and your Valley cohorts have snatched some great entrepreneurs away from Seattle and I’m happy as hell for them… but I look forward to the christening of the 500 Startups Seattle outpost. ;)

    • http://www.geekatsea.com Kirill Zubovsky

      @davemcclure:disqus , I hear there’s a great startup in Seattle called Tablely.com … feel free to snatch that one too :) *Disclaimer: I am an investor, with blood and tears*

  • Bob Crimmins

    Thanks for the report, Dave! I got to watch/listen to about 80% of the pitches via LiveStream… while I was working away at my own startup venture, which was a surreal kind of cool. It was energizing and inspiring to see the shear quantity and heft of talent, passion, diversity and quality in that room — a total blast to watch.

    Seattle is a terrific place to start a company and getting better all the time thanks to some really smart and passionate entrepreneurs and investors that are committed to raising the bar, you among them Dave. But IMHO it’s still too rare that we see this level of concentrated and sustained kick-ass-ness all in one place. I do see it every time (no, really, every time) I walk into the TechStars/FoundersCoop space but that’s the only reliable dose I can find on a regular basis. I know we’re going to see more and more of that in the coming months and years.

    Congratulations to every one of the presenting startups — you guys have the very rare opportunity to do incredible things with incredible people in the most incredible place on the planet to do them. If I knew my ass from my elbow I’d tell you who I thought was gonna kill it and who needed to pivot but I’d be wrong. You all have the opportunity and potential to kill it so keep at it till it’s right.

  • http://www.facebook.com/people/Jonathan-Sposato/786250122 Jonathan Sposato

    dave sch, this is a fantastic post and reading this was hugely heartening for me as it was again a reminder of the amazing supportiveness that exists within the west coast startup communities. and i think we definitely need ‘bridgers’ like yourself and some others to cross-pollinate within the SEASJC axis. valley startup news should also be seattle startup news.

    and dave mcclure i’m not letting you off the hook here. i am hugely bullish on the seattle startup energy and its yield and if you ever want to get more actively involved up here you have an open bar tab at the spitfire discussing this with dave and i. you’ve been one of the most visible proponents of the ‘invest smaller chunks but in more companies that move fast’ model and we’d love for you to cause some trouble up here : )

    • http://blog.daryn.net daryn

      +1.

    • http://www.daniellemorrill.com Danielle Morrill

      Yes I second this, Dave PLEASE cause some trouble in Seattle so I can move back into my house one day. kthxbai

    • http://www.daniellemorrill.com Danielle Morrill

      Yes I second this, Dave PLEASE cause some trouble in Seattle so I can move back into my house one day. kthxbai

  • http://blog.daryn.net daryn

    I’m a huge fan of 500 Startups (disclaimer: I also have some involvement professionally and personally) and this is quite a first crop of companies, but I give full credit to the teams, to 500 Startups organization, and to Dave McClure limitless energy and passion, not to geography.

    You say that “at the end of the day, I think passion is what separates the Bay Area from all other pale imitations”, and that’s utter bullshit.

    There are plenty of people in Seattle with as much passion as their Bay Area counterparts, and working at least as hard. What the Bay Area has, that we don’t, are resources and a community full of successful entrepreneurs who encourage and supporting the up-and-comers, and the visibility that comes from that.

    We have TechStars, that’s a step in the right direction for sure, but it is more focused on incubating its own companies than on supporting the existing startup ecosystem. GeekWire and Seattle 2.0, are trying to do good there, and I applaud them for that. And as informal as they are, OpenCoffee and Hops & Chops actually give anyone a venue to meet like-minded entrepreneurs, which is easy to discount after you’ve been doing this stuff for a few years, but is invaluable to people getting off the ground and building your network.

    Lastly, what Chuck and Guarav created a few years back with Seattle Tech Startups is fantastic. I’ll admit that I’m as guilty as anyone of not being involved after getting burnt out on the mailing list, but just having that resource and the monthly venue for startup pitches and related topics is awesome. I rarely make the trek to the U District, and don’t participate on the list these days, but just knowing it is there is comforting.

    Sure, there are plenty of other difference between Seattle and the Bay Area, which get reposted ad-nauseum every couple months, about core competencies, investor appetite, etc, and they’re mostly true. There are plenty of reasons to move to California, but there are plenty of reasons why Seattle is an amazing place as well, and we need to build the community and infrastructure to support that.

    • http://www.nosnivelling.com daveschappell

      Trying to get a rise from me, @daryn? Declined :-)

      Of course, it’s not as simple as saying geography is the only determinant; I’m obviously a massive fan of Seattle and our startup scene (and wrote that post on less than 6 hours of @InternMatch couch sleep).

      But, I’d say that there is a higher overall occurrence of passionate, supportive startup resources in the Bay Area, and as those people mobilize and interact, they create bigger bursts of energy. Whether it’s vocal communicators with A+ online marketing skills, active and willing investors (much more quick to suspend disbelief and invest in dreamers), or aim-for-the-moon visionaries, there’s just a concentration there that raises the overall game for everyone involved.

      I wasn’t saying that it can’t happen elsewhere; we all have our roles to make it happen.

      • http://blog.daryn.net daryn

        Agree that there are more passionate and more plentiful resources, that was my point, but I don’t think the quality of the entrepreneur or their passion for their own product is any different in the bay area than here or in Wichita.

        • johnhcook

          Daryn and Dave. Great comments. In fact, I just posted a story with Adeo Ressi of The Founder Institute who addressed some of the issues you raised. Essentially, Ressi thinks more needs to be done to spark Seattle’s wealthy to invest in startups.

          One of his many quotes about Seattle:

          “The one thing that is clear is that the funding environment is pretty poor. (There’s) a rather anemic group of venture capitalists, and a rather anemic group of angels. And so, if you ask why is that? It seems that you have a lot of entrepreneurs and executives at tech firms that have money, but for some reason they are not being enticed off the sidelines.”

          Ressi went on to talk about how angel investment groups can be counterproductive, a point I had not really heard before. Anyway, I thought folks on this thread would like the story, since it dovetails nicely with the discussion here. Check it out:

          http://www.geekwire.com/2011/adeo-ressi-seattle-angels-time-sidelines

          • http://www.nosnivelling.com daveschappell

            It’s no one thing. It’s not $. It’s not press coverage (although you all need to do more to get more coverage outside of our own small ecosystem, by writing more in-depth articles, and taking stronger positions). It’s not just entrepreneurs (although we all need to step up the stakes as well). It’s everything. We all share responsibility to raise the bar. But, especially Daryn :-)

  • Anonymous

    Never really thought about it like that. It does make a lot of sense. Wow.

    http://www.being-anon.int.tc

  • Anonymous

    Wow, OK that actually makes a lot of sense dude. Wow.

    http://www.being-anon.int.tc

  • http://blog.daryn.net daryn

    What put Visual.ly and 955Dreams at the top of your list?

    I definitely see the shiny object aspect, and I probably missed something in their pitches, but they seem like interactive agencies / production shops. The visual.ly team is amazing, and the 955 Dreams Jazz app is beautiful, but I don’t see any game changing there, or anything superior to some of our local agencies (Belle & Wissel, if/then, Peel, stimulant, etc.) quality-wise.

    That isn’t really a problem, and doesn’t mean they won’t be successful or build great stuff, and they’ll make their investors some amount money with ease I’m sure, I just don’t see the huge vision that some of the other companies have, so surprised to see them at the top.

    • http://www.nosnivelling.com daveschappell

      I was looking at them purely as likelihood to reach successful monetization, and not purely the size of the monetization opportunity overall. So, think of it as some risk-adjusted-return estimate. Agree that they may be more agency-like (similar to GinzaMetrics in that way), but very likely to find paying customers rapidly, and also likely to quickly attract larger fish in their broader spaces.

      I agree with the potential agency classification for visual.ly, but I didn’t feel like 955 Dreams was in that area at all.

  • http://blog.findwell.com Kevin Lisota

    I am sure this is a great post, but I was too distracted by the “professional” photo of Dave. The likeness was virtually unrecognizable without the hat.

    • http://blog.sentientmonkey.com Scott Windsor

      Peter West Carey did those for us – he’s one of our teacher’s on TeachStreet: http://www.teachstreet.com/teacher/peter-west-carey

      He also did individual photos & a team photo for us as well…
      http://blog.teachstreet.com/team-teachstreet/culture/team-photo-day/

      Highly recommended if you need professional photos or if you want to learn how to be a better photographer yourself!

    • http://www.nosnivelling.com daveschappell

      funny — my wife said the same thing… her exact words… “wow, you’re looking a bit older”

      what a great way to start the day :-)

  • Anonymous

    Dave you say “I’m obviously a massive fan of Seattle and our startup scene” and that you’re an investor in 500Startups. Have you invested in any Seattle-based startups? I tried finding details on your investment activity on Crunchbase or Angelist but didn’t find anything.

    You seem slightly disingenuous when you invest in Bay-area startups but not those in your own backyard and then critique the Seattle startup scene…

    • http://www.nosnivelling.com daveschappell

      Yes, I’ve invested very small amounts of money in several Seattle startups (some of which have moved to the Bay Area). I’ve also invested a LOT of money in a startup called TeachStreet!

      I think that ALL of my investments (of time and money) have Seattle roots, even if they’ve moved to other locations since — I’m a big believer in investing in the entrepreneur vs. the idea-specifically, and it’s hard for me to do that if I don’t have a lot of face-to-face discussion time getting to know the founders (or, if I wasn’t able to work with them in the past at Amazon, etc).

      A mix of those, with time and money, include:

      * Vittana
      * BuzzLabs
      * Internmatch
      * YongoPal
      * Kima Labs
      * Twilio
      * HelpHive
      * … probably missing some obvious others …

      • Anonymous

        Being an advisor (which might qualify as an investment of your “time”) isn’t the same as being an *investor* (investment of your money). Your list appears to be your advisory list (still haven’t found any evidence of your actual monetary investment history) which implies they’ve granted you equity in return for your time. So this rather seems like evidence that the startups have invested in *you*, rather than the other way around. ;-)

        Since there doesn’t seem to be much evidence of your actually monetarily investing in Seattle-based startups (aside from your own), my concern remains. Would be happy to be proven wrong though.

        • http://www.nosnivelling.com daveschappell

          It’s funny Cindie, but I don’t see where I actually owe you (or anyone) any evidence, especially given that you’re anonymous (surprise). But I can assure you (and anyone else who gives a damn) that several of those have monetary investments by my wife and I, that are significant to us.

          And others on that list (most all of them) have very serious time investments that come out of my personal time and energies. I do both happily — I wish I had more money, and time, to invest in entrepreneurs that I believe in.

          Onward, anonymous troll/coward :-)

          • Anonymous

            Deterring such ad hominem attacks is the reason why anonymity works, but I guess when some people can’t rationally answer a simple question they’ll continue to resort to such tactics.

            You certainly don’t “owe” any evidence if you don’t wish to dispel the argument that you invest in Bay-area startups but not those in your own backyard and then critique the Seattle startup scene.

          • http://www.nosnivelling.com daveschappell

            OK, you got me to bite. What I’m saying is that I don’t have ANY investments in companies that didn’t start in the Seattle area (or from Seattle connections). The list of companies that I included is the complete list, I think. Hope that helps you, in some way.

          • Andrew Maguire

            Dave Schappell is one of the most significant contributors to the Seattle startup ecosystem and spends huge amounts of time and effort helping young entrepreneurs get on their feet. If YOU were actually engaged in the community, frankly, this conversation wouldn’t even be happening.

            The ONLY thing Dave puts above his support for TeachStreet and the Seattle ecosystem is the well-being and best interests of the entrepreneurs themselves. So, in our case, moving to Bay Area for 500 Startups was an opportunity that Dave supported, even though I’d like to believe he enjoyed having us around.

            Here’s the bottom line — I wouldn’t trade Dave Schappell’s advice and guidance over the past 6 months for a $100,000 investment check.

            Can any startups, whether in Seattle or anywhere else, say the same about you?

          • http://www.nosnivelling.com daveschappell

            So, you all heard it — my $1,000 rate has henceforth been reset at $100,000 :-)

          • Anonymous

            Andrew, seems you share the taste for ad hominem attacks. Shame. It’s sad that some choose to resort to such intimidation tactics when simply addressing the question always reflects better upon them.

            My family and I have invested in several new companies in Seattle. You even approached us to invest. We had a positive opinion of you at the time, but you certainly have disabused us of that now.

        • http://www.nosnivelling.com daveschappell

          It’s funny Cindie, but I don’t see where I actually owe you (or anyone) any evidence, especially given that you’re anonymous (surprise). But I can assure you (and anyone else who gives a damn) that several of those have monetary investments by my wife and I, that are significant to us.

          And others on that list (most all of them) have very serious time investments that come out of my personal time and energies. I do both happily — I wish I had more money, and time, to invest in entrepreneurs that I believe in.

          Onward, anonymous troll/coward :-)

        • Anonymous

          First, I would not beat up on Dave, he’s busy running the awesome TeachStreet – if I was an investor in TeachStreet, I wouldn’t want him investing in ANYTHING else (time or money).

          Second, the fact that he’s spending his time with 7 other startups is a pretty big investment – he’s not a professional money manager, are you assuming he’s worth bajillions of dollars? I see him at literally EVERY Seattle event, and he busts his ass getting people help.

          Third, is there something we SHOULD be looking at? If so, please say so. I’m a CEO of a startup too (Hark.com), and I am happy to learn about and assist other Seattle companies.

          My response is – what are you suggesting?

  • http://twitter.com/EnriqueAllen Enrique Allen

    Thanks Dave, hope to see you again at 500!

  • http://sco.tt Scott Yates

    Great write-up. Organizing by how interested you were seemed navel-gazing at first, but the more I read the more I think the way you set up the list actually made all kinds of sense. Nice work.

  • http://www.geekatsea.com Kirill Zubovsky

    Hey @daveschappell:disqus , I guess you were wrong about #21, after all. ;)

    • http://www.nosnivelling.com daveschappell

      heh — yeah, I’m wrong about a lot of stuff… but I think I properly disclaimed that in my post… now, get back to work :-)

  • Jens Peter Olesen

    Just want to recommend http://www.languagewire.com/en – excellent translation service!

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