How the earliest of tech startups are surviving
There are 14 'Alpha' startups at this week's Demo conference that aren't as far along in their development as the featured presenters
Ah, the glamour of building a brand-new tech company… invitations to the Playboy Mansion, all-night booze cruises on your private yacht, and sometimes a little work thrown in just to keep you grounded. Right?
Actually, it's more like this: set up shop in cheap office space or your basement, empty your bank account and 401k to fund your brilliant idea, and work two full-time jobs while only getting paid for one of them. If it works, congratulations! You're the next Mark Zuckerberg (he founded Facebook with his college roommates). If it doesn't, start over with even less money than you had before.
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That's basically the life faced by many of the newest entrepreneurs featured at this week's Demo conference for emerging technologies. Demo last year began including "Alpha" companies, startups that aren't quite as far along in their development as the featured presenters. There were 14 of them this week in Palm Desert, Calif.
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Jorge Vasquez, CEO of SocialOrbits, maker of a collaborative travel reservation and event planning app, has launched his company with $15,000 to $20,000 taken from his bank account and 401k, and has four employees that he doesn't pay.
An assistant vice president in a Merrill Lynch trading division, Vasquez says "I work all day during the day. I get done at 5, I come home and the first thing I do is walk in my office and I'm right at work."
Calling it a night at midnight "would be a good day," Vasquez says.
Yuan Zhang of Demo Alpha presenter UppyMedia, which makes a fashion-focused application for Facebook, is an actuary by day and CEO and founder by night. Her director of marketing, Anna Yuan, works in business development for the semiconductor industry.
Starting a new company "is very exciting," Zhang says. "We said yesterday while we were preparing the company profile and the pitch that we wish we could do this all day, 24/7."
A similar experience is reported by Flinc, a German company with a real-time ride-sharing system.
"We are very lean," says Flinc CEO Klaus Dibbern. "We live in an incubator at a university where we don't pay any rent. Nobody has any salary. We're a seven-person team right now. Out of those, three during day time go out to different jobs. It's extremely lean, there is no money spent. [Appearing at Demo, which cost $5,000 plus travel expenses] is the biggest expenditure we've had so far."
Alpha companies like SocialOrbits, UppyMedia, and Flinc are looking for money from venture capitalists and other investors, but face an economy in which the venture cash available to tech startups has shrunk considerably.
