On May 9-11, I attended Tech Crunch’s 2016 three day Disrupt Conference in New York City. The goal of the conference, according to the TechCrunch website, is to “gather the brightest entrepreneurs, investors, hackers, and tech fans,” to introduce new technologies and gain insights from the Tech Industry’s key innovators.
The Disrupt Conference was broken into four components. The first, a Hackathon, in which developers created teams, and then spent 24 hours trying to build an application that has the potential to grow into a business.
The second component of the Disrupt Conference was the Startup Alley. In this section, early stage startups (and a few established companies who managed to buy their way in) attempted to pitch themselves to conference attendees as they worked their way to the back of the building to hear the conference speakers and panelists. Think traditional trade show for startup geeks (I’m one of them, so I thought the booths were pretty cool).
The speakers were the third component of the conference. TechCrunch advertised this as Thought Leadership. For the most part, it was. The TechCrunch writers and editors hosted a series of panels and asked industry leaders questions in a conversational format. Fred Wilson spoke, from Union Square Partners about “Making it in New York.” Stan Chudnovsky from Facebook talked about their new Messenger bot (which TechCrunch is already using on their website). And Mike George from Amazon spoke about building the Echo. There were over 75 speakers and panelist according to TechCrunch, including a few celebrities, which I’ll get to in a moment.
The final component of the conference was Startup BattleField. TechCrunch describes this as “the heart” of Disrupt. Here, preselected early stage startups (who are less than 2 years old and have raised less than 2.5M in funding) get six minutes to pitch their business to a panel of judges in an attempt to win $50,000 and the Disrupt Cup, while over a 1,000 attendees watch from the audience.
“Twenty three startups have now been crowned winners of Startup Disrupt since it started in 2008, and according the TechCrunch website, everyone of them has either been acquired (including all of the first five winners) or are still operating. That makes winning a pretty big deal. Past winners include well known companies like Dropbox, Mint, Yammer, and Zenefits. Basically, you win, and there is a good chance that you’ll be rich.”
The winner of this year’s Startup Battlefield was a company called Beam. Beam is a platform for video game players to stream themselves while they play video games, and because it uses technology that allows for low latency (the live stream delay between the person recording and the people viewing the video is extremely short) viewers can interact with the game player(s) in real time, even potentially influencing the gameplay. This is an attempt to innovate beyond the technology of companies like Twitch, who are in the same “live streaming video gameplay” space. If you’re wondering about the size for this market, Twitch was was acquired by Amazon for nearly 1B in 2014. Beam was founded by team led by Matthew Salsamendi, an 18 year old from Bellevue, Washington, with an impressive business track record (he started his first company, a MineCraft hosting platform and the industry leader in this niche space, at 14 years old).
Overall, it was a good conference. There were a lot of interesting companies across a wide range of industries. I’ve attended past Disrupt Conferences, and I’ve often noticed that the focus has been on software applications. This year’s conference had companies of a wider variety. I played around with V.R. for the first time, which is every bit as cool as people say it is. Ate flour tortillas from a home automated tortilla maker (Flatev). Saw (but didn’t drink) from a high tech water filtration system called WaterO, which was one of four finalist for the Disrupt Cup. During their presentation WaterO disclosed the particles per million for a range of water suppliers, including; Flint Michigan (if you’re not familiar with Flint, they’re going through a water contamination crisis), the U.S. government’s standard for what’s considered safe drinking water, as well as the water purity for all of the major American bottled water companies. At the time, I was drinking from a bottle of water that was given out at the conference, and I was fascinated to realize that the only disclosure on that bottle was that it was “100% natural.” It made me wonder why water purity isn’t required by law, in the same way that nutritional facts are disclosed on packaged foods.
This realization, leads me into both the strengths and weaknesses of this year’s TechCrunch Disrupt. The biggest weakness, is that most of the technology isn’t very disruptive. Companies like Beam represented technological leaps that were clearly advances (even though the use case is questionable — watching people play videogames) for the human species. With this technological exception, most of the startups at Disrupt, were built upon the cross pollination of ideas that presented only incremental “convince type or market positioning” advancements (If they were actually advancements — in some cases this is arguable. For example, I loved the tortillas from the tortilla making machine, but I walked away asking myself if I would pay $200 for another appliance for my apartment — the answer is no, and especially not for this one. The truth is that I’m trying to eat less tortillas, I have limited counter space at my home, and I don’t want to have to buy overpriced ($1 a piece) tortilla dough packages for the rest of my life, which are required to use the machine).
Other companies like Ritual, also a finalist for the disrupt cup, had the opportunity to be disruptive, but fell short. Ritual makes specialty vitamins that they describe as open source. This means that they source the ingredients back to the location that they were extracted, which they disclose on their website. They also explain why the ingredient are there.
This is a cool idea. As I’ve become older and wiser, I like to know more about what I put into my body, and as I talk to more people about health, I’m finding that they do too, so this appears to be a trend. We could call this trend a general movement towards food transparency. In addition, the Ritual vitamins are going to be clear (the liquid is currently blue for the samples vitamins) so that people can see what’s inside them. This physical transparency is also designed to make people feel better about what they’re putting into their body. But the truth is that Ritual is mostly a marketing gimmick. If a vitamin wasn’t safe, the FDA would remove it. The fact that the capsules and liquid and are clear, means nothing. Poison can be clear. The founder explained their she was a cellular biologist and had refined the composition of the vitamin, so that it was designed for women, where as a lot of over vitamins are not designed with women in mind. She then went on to explain that Ritual’s next big focus is prenatal vitamins, of which, it’s safe to assume that all are designed for women.
“As the software/web industries mature, without significant innovation in the underlying technology, it will become harder to create disruptive innovation within existing software applications.”
Even though I’m criticizing Ritual, I’ll be honest, I really liked their presentation. I’m using them as an example, because, like a lot of the startups at Disrupt, they fell short of being truly disruptive. Part of the founder’s argument for designing a new vitamin formula, was that when we eat, we take in different types of nutrients through our food and the things we drink, and yet, current vitamin use a shotgun approach in which they don’t consider these nutrients. This causes our body to become overwhelmed with a lot of “stuff” that has be filtered out. I’m sure this is true. In can be attractive to buy a vitamin or cereal that has more than we need. The assumption is that more vitamins and nutrients are better. Several years ago I stopped taking vitamins, and instead focused on eating more nutritious foods. I always wondered why after taking multivitamins my urine became fluorescent. A buddy told me the same thing happened to him. I figured that both our bodies were filtering out something that was unnecessary. I began to think, maybe 300% or more of my daily allowance for thirty vitamins and minerals found in the multivitamin that I was taking wasn’t a good thing for my liver and kidneys..
The real step forward in creating a solution to this problem, which the Ritual founder claimed to be solving, was exposed by a TechCrunch Disrupt panel judge during a Q&A after her pitch in the Startup BattleField finals. The real step forward will be when a company customizes a vitamin to the nutritional needs of the person who takes it. This type of advancement would be truly disruptive. Instead, Ritual was a product that presented a series of unique gimmicks that would make it easier to market. At $30 a month, affiliate marketers on Facebook could make millions for themselves, and Ritual, targeting people who take vitamins but haven’t realized that they really don’t know what’s in them. I guess that could be disruptive to the profits of the existing vitamin industry, but I would argue that it’s not consistent with the spirit of TechCrunch’s exploration of disrupt technological innovation.
I want to talk about one more observation, in regards to this year’s Disrupt, before I talk about the strength of the conference. I mentioned earlier that there appeared to be less software companies at this year’s conference, as to opposed to past years. I saw a lot less iPhone apps, no food delivery companies, and I didn’t see one social network. Let me clear, I’m not complaining. I’m merely sharing an observation on a trend that has been in motion for a while: As the software/web industries mature, without significant innovation in the underlying technology, it will become harder to create disruptive innovation within existing software applications. For example, Facebook nailed the idea of building a social network for the general population, as a consequence, Mark Zuckerberg was able to build one of the world’s biggest media companies in a relatively short time. After, several additional startups built vibrant businesses by specializing on each of Facebook’s most popular features (Instagram for pictures, Twitter for status updates, WhatsApp for messaging, SnapChat for video posts).
Because there have been less breakthroughs in the underlying technology, or new shifts in paradigms about models that could use existing technologies in new ways (think Uber), there was less software, and a lot more products, services (things like insurance, legal services, job recruitment) and hardware at this year’s TechCrunch Disrupt Conference then in certain years past. This is a consequence of people being forced to reach farther into mature industries where technological innovation is relatively obvious. It’s pretty clear that my home Brita water filter could have been built with better software to tell me what’s in the water, as in the example of WaterO, but how much of an impact does that innovation really have on my life. In most cases, not much. Incremental innovation, isn’t generally very disruptive. Really, this is a sign that the software / technology field is becomingly increasingly crowded, problems are more specialized, and underlying technologies have become mainstream. As an example, TechCrunch had both Jessica Alba (the actress) and Carmelo Anthony (the New York Knicks basketball player) as panelists. Both added to the conference conversation, but I would argue that neither are people who represent humanity on the edge of disruptive innovation.
This leads me to the strength of TechCrunch Disrupt. Even though most of the startups weren’t really all that disruptive, the ideas that I picked up at this year’s New York Disrupt Conference, disrupted the way that I viewed the world. In a lot of cases, I went into the conference thinking one way, and left thinking another. The exposure to so many people with ideas on how to change the world, started a conversation within myself, which has extended both to my conversations with others, and I hope, to you my reader. Attending Disrupt caused me to, “Think Different,” which according to the late Steve Jobs (arguably the single most important person in the history of modern technological innovation) is the first step towards creating true disruption.