SXSW is not about the next big thing

March 17, 2011, 8:00 PM UTC

In the days to come, there will be a lot of back and forth analysis over who “won” SXSW and whether or not there was a breakthrough technology to watch out for. It stems from the Austin conference’s reputation for being a kingmaker. But where did that come from and is it well deserved?

I was at SXSW in 2007–the “Year of Twitter.” Almost overnight, Twitter went from a passing curiosity among a small group of edge bleeders to a freight train that hasn’t looked back. What happened was that you had a unique combination of factors that are probably unlikely to ever happen again, which is why playing the “win SXSW” game is probably going to be a loser’s bet for most people. It’s also why you can probably cut your social media strategist budget in half when it comes to the app and brand arms race this conference has become.

What happened in ’07
First off, there was very little going on with our mobile devices at the time. There were no iPhones, no apps, and so getting some social use out of phones was a complete novelty. Even social networking as we know it was early–Facebook was a closed network with just under 20 million users at the time. The landscape was pretty wide open for something new.

Second, many of the trendsetters were on it at the time, but were searching for a good use case for it. It wasn’t until I saw the critical mass of people in the same place that its value became more obvious–but the key was that I was primed for getting an answer. As opposed to the app fatigue we experience today, I found Twitter interesting and was hoping some utility would come of it.

Twitter made connecting to people easier.
I didn’t have to give someone my phone number to allow them to contact me and I could keep up with others without asking for anything on their behalf. People want to connect to others–most times just to a small group they care about, other times to a mass audience, but when you make connecting easier, you can be successful. That’s where I think Foursquare won out over Gowalla–they made it much more about finding real people than about virtual goods and game mechanics.

It’s incredibly difficult to imagine that set of circumstances ever existing again — and so it strikes me as a futile effort to, year in and year out, try and watch to see which apps and services will be the breakout hits of SXSW. The conference changed the momentum of one startup, and Foursquare edging out Gowalla last year on their home turf could kind of count for a half win — because they already had nearly a million users already. So, one and a half kingmaking stories in what… 17 years? That’s hardly what I’d call a guarantee, and not enough to keep watch for it every hear. Happenstance, anyone?

What SXSW has always been about is people. It is the single best place in the creative innovation world to build relationships and get to know people. I have friends from all over the world that I’ve met over the last five years that I can’t wait to see in Austin every year. It’s where I met Rob May from Backupify for the first time in person–and I got to back him through First Round four years later.

The companies that rocked SXSW this year got that. GroupMe set up a casual space to meet, chat, and nosh on grilled cheese sandwiches right across from the convention center. They didn’t make you go pedicabbing halfway across town to go to their overhyped event. They didn’t invite 4,000 people to their party, only 23 of which were on a VIP list. I had friends that didn’t RSVP that got in, and they didn’t have to wait forever. They didn’t bust through the fire code either. And their app helped you cut through the noise and talk to the people who you wanted to talk to–making connections easier.

Did they win SXSW? I think they had the most impressive showing of any app, but I go back to something Chris Fralic asked me once: “What do you get if you win?” This is what I like most about the team with the pound sign mascot–they know the answer is “Nothing much.”

The game is far from over and the road is long. They weren’t just sunning themselves at their grill–they were taking business meetings, talking to reporters–working their butts off. It wasn’t just a big party to them.

The companies that lost SXSW are the ones that spend a ton of dollars to plaster their logo on flatbed trucks without even so much as a mention of what their app did, what their brand represents or who they were. They were the mobile teams that gave me a place to plug in, but didn’t put a representative on the floor so I could ask why I don’t have the latest version of Android on my phone. They were the ones that treated their party like a meatpacking district nightclub, turning (and pissing off) more people away at the velvet rope then they could ever hope to “influence”. Nothing like making someone wait on a long line to give them a sour taste about your brand.

So did SXSW jump the shark this year? I don’t think so. Was it noisier? Sure… but I just paid attention to the awesome people who continue to show up year in and year out. The rest is easily ignored with the right app.

Charlie O’Donnell is a principal with First Round Capital, working on very early stage investments in the New York City area. He blogs regularly at This is going to be BIG!

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