Demo Day at Y Combinator Offers Glimpse of Web’s Future

8/15/08Follow @bbuderi

The house was packed with investors big and small (only one limo was waiting outside, though), the food tasty, the mood upbeat, the rain hardly fell—and, most importantly, a score of very intriguing startups stood ready to present.

It was Demo Day at Y Combinator, the bi-coastal incubator/venture firm that’s based in Cambridge, MA, in the summer, and Mountain View, CA, in the winter. “YC,” as it calls itself, holds these Demo Days in two batches each year—spring and summer—to showcase its latest startups to accredited investors and a few other outsiders.

Who could resist an invitation to be a voyeur at Demo Day? So I headed over yesterday to the East Coast HQ, a gray-green concrete slab with a tent outside in a largely residential neighborhood of West Cambridge. (YC will hold two additional summer Demo Days in Mountain View next week.) All told, 20 startups presented (two others were scheduled to appear but weren’t quite ready to debut, I was told).

Y Combinator invests chiefly in software and Web- and mobile-services companies. According to the promotional materials for Demo Day, this crop of companies are developing “a startup job site, engagement analysis for media companies, videoconferencing, database software, a site for students, HR software, a news site, photo-sharing, a video site, a viral game, prediction markets, social browsing, POS customer satisfaction surveys, white labeled social news, audience response software, music distribution, green certification, site creation for small business, a mobile-focused Evite competitor, a secondary ticket market, an event site, and a comment crawler.”

And that’s pretty much what we saw. These enterprises are in various stages of development: some have already left the YC roost and launched publicly, others are seeking bigger investment deals, and some are still hunkered down ironing out the business plan and concept. Most are ready to speak to a reporter, but several preferred to stay off the record.

Y Combinator Demo Day NetworkingAnd I wasn’t the only one eager to listen. I mean, the house was full—I spotted four folks from General Catalyst, including managing directors David Orfao and Joel Cutler; Akamai co-founder Jonathan Seelig, now a managing director of Globespan Capital Partners; Venrock’s David Beisel; Jo Tango of Kepha Partners; Don Dodge of Microsoft; and some 80-plus representatives from Google, Walt Disney, and a host of other firms.

Leigh Zarelli was there from New York: she said her firm, Walt Disney, was stepping up its early-stage acquisitions. My favorite out-of-town tale came from Stephanie Robesky of London-based Atomico (founded by some of the Skype and Kazaa founders), who told me that she only discovered yesterday that the event was in Cambridge, MA, and not Cambridge, England. That sent her scurrying for a last-minute airplane ticket.

The entrepreneurs all made PowerPoint-type pitches on a big screen inside, many with live Web demos. Each had seven minutes to make his case. No questions were taken at that point, but you were free to fire away during the breaks and after the event ended some three hours after it began. Y Combinator founder Paul Graham says it was the seventh Demo Day he’s held, the fourth in Cambridge. He kicked off the event by stressing that the startups had a median age of 10 weeks: “So lower your expectations,” he warned. “Imagine what they’re going to look like after six months.”

But everyone I spoke to who’d been to previous Demo Days (this was my first one), thought this year’s crop of presenters had definitely raised the bar. “Pretty impressive,” was the verdict of Rich (still no Tacoda tattoo) Levandov of Avalon Ventures. “I would say more energy, more consumer focus” than previous events.

And, I have to say, the group as a whole was extremely impressive—few warranted Graham’s caution.

Here, in no particular order, are 10 of the companies I found most compelling—at least based on their seven-minute pitches:

Posterous: “Dead simple blogging by e-mail,” is their tag line. This company has already launched, and Garry Tan and Sachin Agarwal gave a cool demo that showed how you could simply e-mail in video clips, audio, photos, text, whatever—and their software would automatically convert it to a blog post. And they didn’t fail to mention that Michael Arrington of TechCrunch had mentioned Posterous … Next Page »

Bob is Xconomy's founder and editor in chief. You can e-mail him at bbuderi@xconomy.com, call him at 617.500.5926. Follow @bbuderi

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