Six finalists made it to the Web 2.0 Summit Launch Pad today, and promoted their startup in front of an onstage VC panel. My personal favorite was CleverSet, which won Best in Show from the Web 2.0 audience. Other finalists (in descending order of my own 'investibility' ranking) included Tripit, ClickForensics, Spiceworks, Realius, and G.ho.st. Here's a rundown of each finalist and its secret sauce:
- The Pitch. Todd Humphrey of Cleverset has the lofty goal of ‘true personalization’. CleverSet shows what’s relevant to any individual at any given moment by extracting critical relationships between people, places, and things. The system seeks out unique relationships, models visitor actions, then adapts the modeling based upon needs, interests, and any other data that becomes available. More data = better targeting = more revenue. They now drive personalization on 85 sites, including American Express, Overstock.com, and Sephora. After 18 months live, their customers have a 20% average increase in sales, and increases in conversion rates are 20%, and 30% of ongoing revenue is directly attributable to the service. Just now going out to raise their first round of institutional financing after both angel and national science funding.
- The Judges’ Commentary. Chris Albinson of Panorama loves this company – hard core science and math applied to a real, tough-to-solve business problem. OATV investor Mark Jacobsen once started a company called LikeMinds for collaborative filtering, but worries about how many companies are duking it out in the space.
- My Take. CleverSet competes with Aggregate Knowledge (a First Round investee), but I still have to give it props. I love the potential in this space; I love the hard science involved in complex data and in predictive modeling that develops tangible results. I salivate over the impact numbers. All told, this opportunity was tops for me tonight. They'll command a rich valuation.
- The Pitch. Tripit wants to make travel easier. Users can forward any confirmation email to [email protected], which will then parse the email and add the relevant bits into Trippit's free travel organizer. Multiple confirmation emails will be built into a master itinerary. For those of us without assistants, the automated master itinerary is a great benefit. Travel calendars can also be shared with your social network, whether that means giving your spouse access to your plans, or organizing a big family reunion. Tripit To Me will send your current itinerary to your mobile phone while you're on the road. While CEO Gregg Brockaway didn't mention it, management is the expert travel team that previously founded Hotwire.
- The Judges' Commentary. Albinson 'didn't get it' - can anyone new make money in travel? Jacobsen (already a Tripit investor) loves it and thinks it's an obvious need.
- My Take. I like Gregg and team, they're razor sharp and know how to execute. Also, I like the service enough to use it personally. Maybe that's because I don't have an assistant, maybe it's because my entire family (even Mom and Grandma, who live in a different state but are nervous about flying) likes to be kept abreast of my travel plans. Tripit is my personal pick for Most Likely to Exit First, since it's an obvious tasty morsel for a large travel company and the team is well-connected.
- The Pitch. ClickForensics fights click fraud so that advertisers get what they are paying for. This improves traffic quality, both in search and in display advertising. Until ClickForensics launched in 2006, there was no way for an advertiser to know how big a problem fraud was to their campaign. Free statistics are handed out to anyone who contributes data, and it turns out that just over 25% of all clicks are fraudulent. (Wow.) APIs support forensic monitoring, click reconciliation, etc. Publishers can use the information in order to optimize ad serving, improving traffic by not showing ads that would later be tagged fraudulent. The company is raising their Series B round currently.
- The Judges’ Commentary. Jim Lussier of Norwest agrees there is a real need and that this is a unique value proposition. He sees trust as essential, and the scoring/reputation model is promising. Jacobsen worries that Google, Yahoo!, et al are already looking at this problem (Lussier doesn’t think that people will trust Google), and ClickForensics could get squeezed out by an in-house solution. Also, market pricing already takes fraudulent activity into account.
- My Take. This is a real need, and ClickForensics appears to have the jump on the market. It will never get too large or too sexy (not necessary, but often a carrot to VCs), but the company could own the entire space and mint its own cash flow.
- The Pitch. Spiceworks is offering free, easy network management. Web 2.0 revenue model (=advertising!) for business apps. Dashboard that watches inventory, manages updates, offers troubleshooting tools, and provides a full-featured help desk. IT managers can use the site to learn about new IT products and services. The business is ad-supported, and IT managers were happy to use ad-supported business software. Ad networks and agencies are happy to get the highly informed access to target customers. Based purely on word of mouth, the company is growing by 10% month over month. Most customers are SMBs today, but the company believes that enterprises will be interested once they see the cost savings.
- The Judges' Commentary. Albinson thinks they've proven the value proposition and that the market is huge. Michael Skok of Northbridge pointed out that this market is littered with companies that failed to make money.
- My Take. I don't get excited about this as a user, but if NetZero can make it, then Spiceworks can. My interest would be highly driven by how the financials look, and how the revenue model is proving out.
- The Pitch. Realius has launched a fantasy real estate game. Tap into consumers' obsessive interest in real estate and real estate values - offer up home information and guess what it's worth, then compete against other users for who guesses closest to the market. Weekly games follow the natural market, and the company bets that the online game will drive real-life engagement, with users going to see homes in person. Sponsorships and advertising are the primary source of income. In addition, brokers that use the system to train newbies will pay a license fee.
- The Judges' Commentary. Skok believes that brokers struggle to get attention in a noisy market, and this can help. Lussier thinks the game will attract players, but wonders how big the business can really get.
- My Take. I like the idea of applying fantasy sports paradigms to other passionate interests. Real estate and day trading are two examples that jump to mind in which you'd like to play that game without spending real money. But I too think that the market gets limited; I'd like to see if Realius can make their market bigger by extending into other verticals.
- The Pitch. Global Hosted Operating System (G.ho.st) is a Web-based operating system. This virtual computer lives on the Web and is more protected from crashes, viruses, storage limitations, or any of the other pitfalls of desktop-based computing. The team is split between Israel and Palestine (this must be symbolic of something). They've raised $2M to date and are ready to raise their next round.
- The Judges' Commentary. Skok thinks this is a big idea that will address pains of both the individual consumer and the enterprise IT manager. Lussier thinks that these problems are large and pervasive, but he doubts that the company will be able to get users to abandon their traditional desktops.
- My Take. I think it's a tough, tough road to both (a) start a new operating system and tackle the gorillas, and (b) get users to abandon their desktops 100% for the untrustworthy ether.