|Could These Start-Ups Become the Next Big Thing? |
When Facebook bought Instagram for $1 billion last month, it raised a lot of eyebrows — and questions about which buzzed-about start-ups might be on track for similar success. There is no shortage of companies to choose from. The start-up scene is flooded with apps and services that are attracting users and backing from investors. But it can be hard to work out which companies are worthy of the kind of attention Instagram was receiving when Facebook came calling. Here is an inherently incomplete list of companies that have the potential to be a hit — whether because they’ve seen explosive user growth, or are attracting investors or a new demographic, or just because they have an unusual idea that seems to be taking off. Of course, any of these start-ups could become the next Pets.com. But they could also be the next big thing.
Imagine you are a venture capitalist on Sand Hill Road in Silicon Valley, and could invest in only one of these companies. Vote on which one you would choose.
1%Voting is closed. See the results above..
You've already voted. Results are above..Vote
Two years after it hit the Web, Pinterest, a kind of virtual pinboard, is already the third-most popular social media site, after Facebook and Twitter. Users can “pin” images they find around the Web — of a wedding dress, say, or a tasty-looking dish — so that the images appear on their Pinterest pages. Other users can then click to visit the source of the image. Pinterest still has a business model to figure out, but investors are intrigued by the site’s demographics; women, who are big online shoppers, account for 85 percent of its traffic. Pinterest is on the verge of raising cash in a deal that would value it at more than $1 billion, according to people close to the company. Bill Nguyen, founder of Color Labs, which makes an app for sharing photos and video, noted that Pinterest was building a network of people organized by shared interests, rather than social connections. “That’s originally what we were trying to build, and it’s very powerful,” he said. “They could be as valuable as any tech company.”
It sounds like an unlikely concept — people letting Internet-sourced strangers rent out their spare bedrooms and park in their garages, or relying on them to run errands and perform simple chores. But several fast-rising start-ups are built on the idea that a new economy is being forged around “collaborative consumption,” where people share resources they already possess, like extra square footage or time, in exchange for a fee. TaskRabbit, a service that lets people find “rabbits” to perform tasks and run errands, is one rising star in this field. Airbnb, which lets people rent out extra bedrooms or entire houses, is already looking like a juggernaut and may give a lift to its peers. Other potential contenders in this category: Skillshare, which lets people teach workshops, and Getaround, for renting cars.
Mark Veltman for The New York Times
Sean Parker, one of the founders of Airtime.
Not much is known about the latest venture from Sean Parker and Sean Fanning, co-founders of Napster, the infamous music-sharing service that shut down in 2001. The two men referred to their new company as a video-sharing site during an interview at South by Southwest, but the details are still under wraps. With the current funding frenzy around video-sharing apps like Viddy and SocialCam, it is clear that Silicon Valley sees video as the next frontier. Airtime has piqued the interest of Adam D’Angelo, one of the founders of Quora, who was an early investor in Instagram. “It could wind up being really, really intriguing,” he said.
Jin Lee/Bloomberg News
This mobile payments company is barely three years old and already has tens of thousands of merchants swiping credit cards using its little white attachment for cellphones and tablets, instead of a cash register. Jack Dorsey, one of the founders of Square, was also one of the founders of Twitter. Square is on track to ring up $5 billion in payments this year, and its numbers have venture capitalists scrambling to get their wallets out. Less than a year after raising $100 million in financing, the company is said to be raising a $250 million round that could nudge its valuation as high as $4 billion.
Peter DaSilva for The New York Times
The founders of Dropbox: Arash Ferdowsi, left, and Drew Houston.
This file-sharing service solved one of the biggest headaches of our time: How do you access files, photos and music across a myriad of devices? Instead of jamming up our e-mail in-boxes, Dropbox made it possible to store our digital clutter in the cloud. It was a simple proposition with huge growth prospects. Last year, the service had 50 million users, up threefold from the year before. Steve Jobs tried to acquire the start-up in 2009 and, when that failed, introduced Apple’s competing iCloud storage service. Google introduced its own take on the idea, Google Drive, just last month. For the time being, Dropbox, and its investors, seem confident that the start-up can go it alone. Last October, it raised $250 million in a fresh round of funding that valued the company at $4 billion — or four Instagrams.
Peter DaSilva for The New York Times
When Path was first unveiled in 2010, people scoffed at the idea of a mobile social network that only let users share with a limited number of friends. But as Facebook and Twitter have swelled in size, the appeal of privacy and sharing with an intimate few has begun to look much more attractive — to users as well as venture capitalists. Dave Morin, Path’s chief executive, has said that more than 2 million people have signed up for the service, and this spring, Path raised $40 million from financiers, pushing the company’s value toward $250 million.
Julie Glassberg for The New York Times
There are lots of taxis in New York City, but outside Manhattan, grabbing one can be hit or miss — mostly miss. Uber, a start-up that pairs off-duty private car drivers with stranded passengers, aims to fill this need. The company gives participating drivers iPhones and software that manages passenger pickup requests. Using Uber’s smartphone application, users can alert nearby drivers that they need a ride, then monitor their driver’s progress on a map. “It’s almost like giving people a super power: Press a button and a black car arrives in two minutes,” said Shervin Pishevar, an Uber investor at Menlo Ventures. Uber started in San Francisco but has since spread to eight other cities, including Los Angeles and Boston. The start-up has raised $45 million from a slate of well-known investors, including Jeff Bezos, Amazon’s chief executive.
Matthew Staver/Bloomberg News
Adam D'Angelo, co-founder of Quora.
This question-and-answer Web site is everything Ask Jeeves never was. Questions range from the silly (“Would Ferris Bueller really have been able to hack into his school’s computer system?” ) to the serious (“What does it feel like to have your spouse die?”). It is not unusual to stumble upon answers from big names. Former Treasury Secretary Larry Summers is on Quora, as are Ashton Kutcher and Mark Zuckerberg. Quora was founded by Adam D’Angelo and Charlie Cheever, two of Mr. Zuckerberg’s early employees at Facebook, who kept that site from crashing under the weight of hundreds of millions of users. The two now face a more intricate challenge: Helping Quora to grow without sacrificing its smarts and simplicity. Investors are optimistic: The company, which has already raised $11 million from top-tier venture capitalists, is now said to be raising more cash at a $400 million valuation.
At first glance, Pinwheel, a service that lets you leave virtual notes that are tied to particular spots on the globe, like the best place to watch a sunset, may not seem like a sure bet. It’s not clear yet whether the service, which is still in invitation-only testing mode, will spark excitement beyond the crop of early adopters who are using it. But the founder of the service, Caterina Fake, has a compelling track record. She was a founder of Flickr, which was purchased by Yahoo in 2005, and one of the founders of Hunch, a recommendation service, which eBay bought for $80 million last year. Adding to the heat around her latest company: A crop of newly minted competitors, including Wallit and Dabble.
[Johnny: The fact that the article misses is the Facebook bought a list of users that they hope to convert to users of Facebook. They essentially paid $20 per user for each of the 50 million user that use Instagram. It is less about technology and more about finding a trend that catches the attention of the public. That is really hard to predict. ]