DEMO: How to aim social startups at the next big thing

Sixteen social media startups presented at the DEMO conference in Palm Desert today. Do any of them stand a chance at becoming the next Facebook or Twitter? And if you get the idea for the next big thing, how will you beat out the ten other people who got the idea at the exact same time that you did?
Matt Marshall, editor-in-chief of VentureBeat and host of DEMO, peppered a panel of experts with questions about advice for startups. How can they follow in the wake of some of the most successful social media companies which have now become giants in their own right?
Michael Brown, corporate development manager at Facebook, is tasked with finding companies that Facebook might acquire or invest in. He said that Facebook, which is only six years old, is always looking for talented engineering teams who share its vision for Facebook’s core product. But his company is not so interested in acquiring social media startups who are doing features that could be bolted on to Facebook.
Seth Sternberg, CEO of Meebo, said his real-time chat company had more than 120 million unique users a month. He thinks successful social companies will offer something simple.
“If I can look at the top part of the web page and understand it without having to scroll down, then that’s simplicity,” Sternberg said.
Sternberg said he also liked the idea of putting together the web with established categories such as toys. Webkinz did that by marrying plush toys with a virtual web experience for kids.
Christine Herron, principal at First Round Capital, agreed that such mashups of different categories have succeeded well and might still do so.
“You look for what isn’t yet networked,” Herron said.
Paul Buchheit, co-founder of Friendfeed, a social-updates aggregator acquired by Facebook, said that the next big thing is unpredictable. Startups will naturally have to work on the foundation of platforms such as Facebook or Twitter. Then they have to consider apps that will change the lives of users. He brought up the example of ChatRoulette, an app where you can do a video conference with a random person from anywhere else in the world. It creates, he said, a mind-opening experience when you can meet people that you otherwise would never get a chance to meet.
Sternberg said it is quite probably that someone else will get a good idea at the same time that you do, particularly if the environment is ripe for the idea to happen. At that point, moving with all possible speed is critical, Buchheit said.
Sternberg said the best ideas come when founders create something that they want themselves. It’s great if the team can get to a working prototype without a ton of funding, since venture capitalists put a great value these days on capital efficient companies, or those who can stretch their funding out a long time. And after a team executes on their initial idea, Sternberg said that the company has to put it out there and listen for user feedback. That’s the time when a second great idea can emerge to make the first idea even better, he said. An example of that was a version of the Meebo chat client. After it launched, users wanted to be able to embed it into their own web sites. Meebo complied, and that led to 85 million people using it.
Brown reminded the panel that while speed is important, the first movers aren’t always the winners. Friendster started before Facebook, but lost its audience. Brown said that watching overseas markets is important in predicting what will happen in the U.S. In mobile, for instance, Asian markets are far ahead. He said that Facebook is working on its China strategy, for instance, but isn’t ready to talk about it.
Marshall asked the panel if the next big thing was the convergence of cloud services, the mobile web, and social media. Herron said she assumes that any app that is created for a platform will be usable on any other platform, so it can be carried from the computer to a phone with ease.
Marshall asked the panel what they thought of Everloop, one of the presenting companies that is focused on providing a social network for kids that is compliant with laws protecting kids on the Internet. Brown said he wasn’t sure if the market that Everloop is targeting — ages 8 to 13 — really wants to be engaged in a social network for kids only. Kids, he noted, aspire to be part of the adult ecosystem. Facebook focuses on those ages 13 and up. Is Everloop’s market big enough? That’s an open question. Another question is whether Everloop should focus on selling virtual goods to kids, or perhaps selling physical goods such as toys that are based on its virtual experience.
Tags: DemoBeat, DEMOSpring10
Companies: Facebook, First Round Capital, friendfeed, meebo
People: Christine Herron, Michael Brown, Paul Buchheit, Seth Sternberg