The knee-kerk reaction against this event (and marketing/pr in general) on News.YC is pretty daft, IMO.
There are some (very social) services that require "critical mass" to be engaging. The spike of TC50 MIGHT just push a service like that into having a self-sustaining/growing user population. Example: What Twitter experienced at SXSW.
And for anything inherantly, viral-- an event like this is a big bump... It's compound interest with a larger initial principal. If you have a viral service that starts with 2 users and I have a viral service that starts with the 10k I'll get at TC50 and we both have the same viral co-efficient, who wins?
And for any company that is fundraising, the visibility/credibility provided by this event is HUGE.
And for any company that is actively looking for partners/bizdev deals, the visibility/credibility provided by this event is big.
Is the value big enough to be worth shifting your launch date dramatically? Probably not. But if your launch date is in the neighborhood, trying to get it done at TC50 (or a similar event) is a low-cost/high-value proposition. Hell, even DEMO is low cost compared to most other PR/marketing spending you could do.
Twitter wasn't just on display. It served a real function. The audience WAS the conference goers. You can't really use it as a comparable example in this case. I seriously doubt a social network aimed at kids will achieve even a fraction of growth from TC50.
I think you're underestimating the power of early-adopters/sneezers. For instance, lots of people have kids, and their friends have kids...
Whats important here is that the type of people that will pay attention enough to go to tc50/demo aren't just going to go there and then not say anything about it.
They'll come home, get on their macbooks and start blogging what they saw ( some really nice programmers building a kids network ). Some of their friends will check out the links, maybe share it on facebook, myspace, or , gosh, in an email. And so forth...
He's made a point. Finding its users is the most important tasks for a startup. Startup events like TechCrunch 50 or Demo may become a flash in the pan that cost lots of energy and time to participate.
I was under the impression that participating in these events is primarily to help get funding, not to help get users. From that perspective, these events are clearly valuable to startups.
Right. It's kinda ridiculous to see people on the east coast basically vomit a steaming pile about west coast events they only vaguely understand.
And besides, the reason so many startups go out to California is a larger tech talent pool. California has a lot of universities with excellent tech programs, very favorable laws and protections for tech workers, and very reasonable taxes for tech workers.
Incorporate wherever you want, your employees are going to look at the legal issues with working wherever you are. If your office is in a state that honors no-compete clauses, many people simply will not work there no matter how much money you offer them. Likewise, we've all got to pay our own private income taxes, and I'm not a big fan of New York's local taxes when your income rises above a certain level.
As far as I can tell, a few notable east coast bloggers are trying to spearhead a movement to call the East the new West for tech, and by and large it's failing because the reality is that despite the overhype and stiff competition, your engineers know they've still got a better shot in the Valley and surrounding areas than basically anywhere else in the country.
Actually, I used to work for a VC firm (and I wrote the article), so trust me, I more than "vaguely understand" how companies get funding, and they're not through these events. The companies that get funded would have gotten funding anyway and no one with a great product ever lacked for funding just because they couldn't get in front of a VC. We never went to these types of events looking for things to invest in.
BTW... If your bottom line income (i.e. NY local taxes) is what you optimize for, you're probably not going to want to work for a startup anyway. Try a bank. I hear they have some nice cubes there.
> Actually, I used to work for a VC firm (and I wrote the article), so trust me, I more than "vaguely understand" how companies get funding, and they're not through these events. The companies that get funded would have gotten funding anyway and no one with a great product ever lacked for funding just because they couldn't get in front of a VC. We never went to these types of events looking for things to invest in.
I've worked at a company that secured funding because of connections made at one of these types of events. So yeah. I guess we're at an impasse, because your statement is exactly as unsupportable as mine.
> BTW... If your bottom line income (i.e. NY local taxes) is what you optimize for, you're probably not going to want to work for a startup anyway. Try a bank. I hear they have some nice cubes there.
I've made much more money in startups than I would have staying at a big company. And believe me, I know. I left a few people at Lockheed Martin (check out those 3% yearly raises!) and I've rejoined a few people who went to MS, and I've consistently been better paid, had at least equivalent benefits (better than LMCO, acceptably comparable to Microsoft) for a majority of the time.
1. Larger talent pool - yes.
2. Lots of universities with excellent tech programs - Stanford, UC-B. Anything else? No
3. Very favorable laws? No. California has some of the worst labor laws and tax laws in the country. You only start companies here because you need the talent. There's no other reason to be in CA
4. Favorable taxes for tech workers? Compared to what? Marginal tax rates on Scandinavian billionaires?
5. Capital gains taxes in CA are insane. Entrepreneurs beware.
I'm not an East coaster or West coaster but you sir need a reality check.
> 2. Lots of universities with excellent tech programs - Stanford, UC-B. Anything else? No
UCSB has a leading Computer Science program, with a really great talent pool for Computer Security in particular. UCSD has a fairly good department.
> 4. Very favorable laws? No. California has some of the worst labor laws and tax laws in the country. You only start companies here because you need the talent. There's no other reason to be in CA
It's favorable from the point of a tech worker. Which is why we like to stay here. For example, check out when a tech worker gets exempt status in California.
> 5. Capital gains taxes in CA are insane. Entrepreneurs beware.
The headline says it all. Solve a real problem for a group of people who care and will be the foundation for your product. (And that group of people should not be Arrington and Calacanis!)
I.e., two of the most valuable "markets" are the primary attendees of e.g. DEMO... investors and press. The next tier can also be a boon: partners.
Another facet that's typically overlooked is the value in really getting clear on what you're delivering. Trying to get a powerful message about what you're doing into a 6 minute presentation in front of an audience of heavy-hitters is worth a lot. It was truly amazing to see so many aimless, jam-packed, and generally crappy presentations right up against so many really fantastic presentations.
This article seemed to come to the conclusion that TC50 is not worthwhile and that working out of the east coast is better and then wrote up a piece justifying it.
To have the top 50 companies seems does more of a disservice to the people named in the top. 50 is just too many! After that it just seems like you lose the attention, impact and intensity of being on top.
What is the success rate of the companies that have participated in the past? Does anyone have stats on that?
Maybe it was a rhetorical question but xobni, mint and flock are the only ones I recognize and the only one I really use everyday is xobni. Mint is OK but I really only read the summary emails and don't log in often.
Isn't this something that goes without saying? I'd be surprised if anyone outside of Hacker News has even heard of TechCrunch, and the only reason people have heard of it here is because the site is spammed daily with their lame articles.
I think the average reader here deserves a little more credit than the original poster has given by submitting an article advising against such an obviously stupid strategy. How on earth did this make the front page?
Wait - you think TC50 is "high visibility low effort"? I completely disagree.
"How much work does it take to get in the TC50?" A ton - business planning, networking, product development; it's a lot more than just starting up in some private beta.
One question not asked is, "How much work is required the four weeks before TC?" Answer: all of your time.
Another unasked question is, "How much time is required the eight weeks after TC?" Answer: probably all of them for at least 50% of the employees since you must follow up and follow through (investors, demos, press, networking, invitations).
That's not low effort at all, neither pre- or post-event; it's probably 8-12 weeks of your time that you aren't doing product development or other marketing. I'll agree that it's high visibility, of course, but don't overhype what it takes to be included and have a successful event.
And for anything inherantly, viral-- an event like this is a big bump... It's compound interest with a larger initial principal. If you have a viral service that starts with 2 users and I have a viral service that starts with the 10k I'll get at TC50 and we both have the same viral co-efficient, who wins?
And for any company that is fundraising, the visibility/credibility provided by this event is HUGE.
And for any company that is actively looking for partners/bizdev deals, the visibility/credibility provided by this event is big.
Is the value big enough to be worth shifting your launch date dramatically? Probably not. But if your launch date is in the neighborhood, trying to get it done at TC50 (or a similar event) is a low-cost/high-value proposition. Hell, even DEMO is low cost compared to most other PR/marketing spending you could do.