CC BY-NC-ND 3.

0 – Deutsch LA 2012

VOLUME 01, MA 2012 Y

bets
OF TION RSEC INTE E T H A T
TE CH NO LO GY & CU LT UR E
CREA TED BY

EMERGING

Deutsch LA

Deutsch LA’s Invention Strategy team journeyed to South by Southwest 2012 to document the birth of over 100 new digital startups. What follows is an exploration into the emerging trends and lessons, culled from that adventure, that brand marketers can apply to their own businesses.
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CC BY-NC-ND 3.0 – Deutsch LA 2012

ABOUT THIS REPORT
The discipline of Invention Strategy was created at Deutsch LA with the mission to solve complex business problems through means that fall outside the typical mold of advertising deliverables. Our team is charged with developing disruptive offerings, relationships, and business models for our clients and for ourselves. To that end, we attended SXSW 2012 to study this year’s crop of fledgling digital start-ups. When we study start-ups, we examine their offerings through two strategic lenses: 1) Start-ups represent emerging bets at the intersection of technology and culture. Any product that a company produces is inherently a prediction for the future. The start-up community, especially at SXSW, represents a rare opportunity to view hundreds of those predictions in a single location, all vying for attention and adoption. 2) Clusters of start-ups help to identify what’s broken in current industries and where there’s opportunity for disruption. If we look at a specific industry, say healthcare, and what problems are being consistently targeted by startups in that industry, we can begin to identify opportunities and threats for our clients in those industries. We’ve structured this report based on those two strategic lenses. In addition, in the final section, we’ve included our recommendations to brand marketers based on the analysis in this report. We hope you find this useful and, of course, we’d be more than happy to speak to your organization more deeply about our recommendations. Thank you. Bud Caddell VP, Invention Strategy
Bud.Caddell@deutschinc.com

START-UPS CONSIDERED FOR THIS RESEARCH:
5Degrees - AdGlue - Aglocal -  Apptopia - Arqball Banjo - Bloomboard - Bodimojo - Book Brewer BrandYourself - Brass Monkey - BuyVite - BuzzData Cellscope - CFA - CompathMe - ConditionOne Crowded Comics  -  Dead Social - Echoer - FitOrbit Forecast - Funf Project - Gauss - Geeklist - Getwear Giftiki - Ginger.io - Glancee - Glomper - Goodzer GooseChase - Grandstand - GeurillaApps - Highlight Hipswap - Hoot.Me - Jiff - Just.Me - Kiip - KULA Causes - Learnboost - Lemur IMS - Local Wiki Localmind - Medify  - Meeps - Meexo - Modo Labs MoPix - Mowgli Games - NextDrop - Nowspots Offermation - OneID - OneSchool - Parking Panda Peekseed - Personal - Picle - Pixable - Prism Skylabs RAVN - ReferralBonus - Rock Your Block - Roximity SaneBox - SceneTap  - Scrible - Sensecast  - Shapeways Shelby.TV - Shortlist - Simplee - Sizeseeker - Sonar Sourcemap - SpotFlux - Springpad - StitchLabs Switchcam - TappedIn - Taskrabbit - Thirst Labs Toopher - Trapit- Tugg - Uberlife - Umbel - Veenome Verbling - VitalClip - Vitzu Technologies - Votifi Voxio - Vsnap - Wanderfly - Wemo Media - We Video Whodini - WooCommerce - Zaarly - Zamp - Zeel - Zero Desktop

ABOUT DEUTSCH LA:
Deutsch LA is one of the most well-respected and successful integrated advertising and digital agencies in the United States. Deutsch LA produces award-winning and results oriented work for clients like Volkswagen, Sony PlayStation, Dr Pepper, and HTC. Deutsch LA is at its core a business building machine. It's not just about making ads. It is about developing strategically sound, insightful creative that connects with people at the right moment in the right environment. Deutsch LA specializes in Digital, Design, Media Planning and Buying, Search, PR, Experiential, and Data Analytics. New Business: Chad Saul – Chad@deutschinc.com Careers: Lionel Carreon – Lionel.Carreon@deutschinc.com

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CC BY-NC-ND 3.0 – Deutsch LA 2012

OUR METHODOLOGY
The South by Southwest Interactive conference has grown into the definitive launching pad for startups. SXSW attendees are an attractive user base of early adopters and select venture capitalists. Moreover, the media and tech press use the event to crown the next big web hit. In years past, small unknowns like Twitter, Foursquare, Gowalla, and GroupMe came out of SXSW as winners and went on to wider success. This year there were nearly 150 official panels and events around startups, including the SXSW Startup Accelerator competition, which had 670 applicants from around the world. This year also marked the introduction of the Startup Village, where startups had their own venue to meet investors and exchange ideas with fellow founders. At the event, our team divided our time between the Startup Village and various panels to learn about current trends around technology and culture. We sat in on pitches, collected flyers, interviewed founders, and struck up hallway conversations. After the conference, we catalogued the startups we found and sorted them by their feature set, user base, and the technology at the core of their offering. From there, similarities became apparent, and patterns emerged. And since the conference, we’ve been monitoring social mentions and press around each startup. One pattern we immediately noted was the shift in startup origins. Silicon Valley has always been the center of digital innovation, but now startups are popping up across the nation, especially in Boston, New York, and DC.

WHERE THIS YEAR’S STARTUPS CAME FROM

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CC BY-NC-ND 3.0 – Deutsch LA 2012

KEY STARTUPS AND TRENDS of 2012
Health & Wellness Quantified Self
GeurillApps Cellscope

Gamefication

Data Analytics
Goosechase

Ambient Serendipity
Gauss

Bodimojo Lemur IMS Jiff Vitalclip BuzzData Zeel Grandstand Medify Funf Project Meeps Learningboost Bloomboard Modo Labs Oneschool Ginger.io Personal Highlight RAVN Simplee Ban.jo Forecast Uberlife Glomper Kiip Sonar Glancee Zamp Mowgli Games

Echoer

Future Sharing

Education

Video Chat

SXSW
Verbling Voxio

Niche Networks
Whodini Hoot.Me Geeklist

2012

Vitzu

Arqball

Shapeways Switchcam Taskrabbit

Thirst

Followthis Pixable

3D Tech

Wanderfly

Social Curation

Shelby.TV WeVideo Goodzer Zaarly

BrandYourself

WooCommerce AdGlue Getwear

Video Aggregators

The Visual Web
Tugg Buyvite Giftiki

Group Buys

Personal SEO
SizeSeeker Adopt-a-Hydrant

Source Map

Parking Panda

Votifi

Rock Your Block

Offermation
DataCouch Local Wiki

The Neighborweb Crowdsourcing

Ecommerce Tools

Next Drop

Civic Startups
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KEY TRENDS
1

Future Check-Ins

Startups:

Ambient Serendipity

Social networking sites such as Facebook 1, Twitter, and Foursquare were designed to help users catalogue their “now”– what they’re up to, what they’re thinking, and what they’re currently sharing. As a result, these tools have created a culture of spontaneity. We use these tools to make quick plans on the fly by finding out what people are doing and where they are in the moment. However, new startups are recognizing that humans are, at their core, future-planning animals. These startups are making it easier for people to plan ahead in a public forum: Forecast and Uberlife are mobile apps that allow users to see what their friends are going to do. Friends can post events they plan on attending or gatherings they are organizing, to get others to join. RAVN is a similar app, but aggregates a list of upcoming local events that users can choose to attend. Users can also connect their social networks to invite their friends to join.

On the web, meeting people is easy. Facebook and Twitter use algorithms to match you with other users with similar interests and friends. But in the real world, these sort of valuable connections can only happen by chance. Even before SXSW began, this batch of startups, promising to deliver invaluable chance encounters, was already a hot topic. Ambient geolocation technology is at the core of this trend’s offering – location awareness paired with data on your friends and your interests. This technology is highly controversial due to privacy and safety concerns, but nonetheless, there were a number of startups experimenting with this functionality. Highlight, Glancee and Sonar connect you with people near you that you might know through mutual friends or shared interests. These services run in the background of your mobile device and can therefore alert you to someone nearby at any moment. Banjo is a similar service, but it also allows you to find out where interesting conversations are taking place nearby and who is participating. Meeps can also show you conversations taking place near you, but layers in a mobile chat experience similar to the chatrooms of the ‘90s. Users can partake in conversations that are location specific, or on random topics of interest. Since Meeps is separate from other social networks, these dialogues are more intimate and there is no risk of being judged by your Facebook friends.

Forecast makes it easy to scroll through future plans.

Recently, Facebook has been focusing a lot of their efforts on the past, with the integration of Timeline, which emphasizes a user’s or brand’s history.
1

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key TRENDS
Micro-Networks
With the explosion of social networking, across generations, and the resulting scarcity of our attention, comes the inevitable urge to pare back. Now, users are seeking more intimate networks. Path was one of the first of these “small social networks,” with a limit of 50 members, but new startups continue to experiment with this trait. Geeklist is a network for developers to trade information, advice, and job openings. Whodini is a network strictly for members of the same organization, looking for specialties and talent to assist on certain projects. It’s primary function is to find experts in the office, but the service can foster new relationships by creating these connections. Hoot.Me is a social network for students and teachers. It allows students to collaborate and discuss homework assignments outside the classroom. This is one example of new startups tackling the education space, which will be discussed later in this report.

The Visual Web
With a glut of information piping through our social networks, users tend to gravitate to the most easily digested form of content – visual content. Flipboard helped start the trend by creating a more visual experience to feed our social networks, RSS feeds, and curated news articles. Now, new startups are taking all text out of the equation, and creating an aggregated experience of visual content from our networks. Pixable is a new web platform that aggregates all of the photos and video that your Facebook friends post into one place. Shelby.TV is a similar service, but focuses exclusively on video. It essentially creates a TV channel out of your various social networks. We also see this trend manifested in sites like Pinterest, which allows users to collect images and display them in a very visual, inspirational way. Many sites are adopting an almost identical user interface to put the content front and center.

Everything is an (API) remix
Application Programming Interfaces, or, APIs, are packages of code with certain functionalities that developers can use without reinventing the wheel. Startups are becoming variations of existing startups, utilizing social APIs as the basis for their applications. But this doesn’t make them any less innovative. A unique recipe of social integrations can drastically differentiate one app from another. Many of the startups this year used social integrations to expedite logins, personalize web experiences, or make content easily shareable. Facebook is the most popular API, since it has a wide range of your personal data, tailoring experiences based on anything from your email address to your favorite band.
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Popular APIs amongst the startups

CC BY-NC-ND 3.0 – Deutsch LA 2012

KEY TRENDS
The Neighborweb
Craigslist has long established itself as the primary digital community board - the place to post anything from used furniture, to apartment listings, to personal ads. But what Craigslist lacks (and what new startups are helping to create) is a sense of community and trust among its users. Taskrabbit is a peer-to-peer task and errand service for local communities. Users can find vetted, trustworthy people in their neighborhoods to help them with chores ranging from housework to picking up the dry cleaning.

Quantified Self
Data, by itself, is cold and daunting to digest. Yet, when we’re given data about ourselves and our behavior, we find an abundance of interest and intrigue. One of the very first places this was realized was in health and fitness products. Nike+ was one of the first services to make personal data useful, motivational, and shareable. Now, visualizations of personal data are moving into our everyday lives. Zamp is a new startup that provides metrics around travel. It tracks information such as airports, distance traveled, types of aircrafts, and cities visited, and it visually represents the aggregated data. Grandstand is a platform for businesses to develop unique ways of visualizing data. The service pulls in social data from a particular venue or place of business, and repurposes the information into social games or full-scale interactive installations. Personal is a tool that aggregates data from a variety of sources: your social network, bank statement, purchase history, and travel itineraries and turns these secure pieces of information into “gems.” These gems make sharing to a select group simple, removing the hassle of logging in to several accounts to access the same information.

Taskrabbit caters to both major cities and small towns across the country.

With Zaarly, people can post any item they need, and the price they’re willing to pay for it. Users can also post their own items they want to sell to their neighbors. Parking is typically a nuisance both in big cities and small towns, and Parking Panda is putting the power in the hands of the neighborhood to solve this problem. Members of the community can rent out their own parking spaces to local car owners in need.

Some of the “gems” available with Personal.
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Industries poised for disruption
Education
Education is becoming an increasingly hot topic in the tech world. New companies are proving that education at any level can be accessible and portable, moving beyond the typical classroom structure. The Kahn Academy has been a game changer in the industry. Offering a diverse range of free, online classes to anyone, anywhere in the world, shows how a simple tool can foster learning. Most recently, Facebook has created groups for schools to allow students and teachers to interact and share information online. These examples are a sign that tech companies and startups are acknowledging the shortcomings of the education system, and looking for ways to improve it. Problem: Teacher evaluation systems are broken. Solution: Give administrators and teachers better tools to assess performance and motivate overall improvement. Bloomboard is a tool for school administrators to better evaluate their teachers. It organizes classroom evaluations with personalized feedback systems. It also provides individual training and professional development for teachers. Learnboost is a platform that integrates lesson plans, schedules and gradebooks into one place for teachers to organize and share information. Through data visualization, a multimedia lesson plan builder, and sharing capabilities, teachers can assess performance, organize class time, and share information with administrators and parents. Problem: Higher education institutions are great at building physical community spaces for students to learn and connect with others, but rarely is there a hub for students that exists online. Solution: Create mobile apps that help students navigate their campus, connect with other students, and better organize their college lives. Modo Labs is a simple service that builds optimized mobile sites for Higher Education dotcoms so that students, prospective students, and faculty can access information on smartphones and tablets. OneSchool is a mobile app that bridges campus navigation and information with social tools. Students can connect with other students in their classes and form group discussions within the app. It also encourages them to engage in discussions around interests (another rising trend) with others who may not necessarily be in their immediate group of friends.

Bloomboard was one of the winners of SXSWedu’s first annual LAUNCHedu competition.

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Industries poised for disruption
Health
One of the biggest trends in startups this year is the rise of health-related tools and applications. As healthcare has become an increasingly hot-button issue in politics, startups are beginning to address these issues through innovative private solutions. Problem: Patient visits to the doctor are often unnecessary, unproductive, and too frequent. Solution: Provide patients with the right information up front. Give them the tools that empower them to take ownership of their health. Ginger.io aims to provide doctors with accurate behavioral data on their patients. Often, patients with chronic diseases have to track their behavior and symptoms with a pen and paper, which leads to potential errors and misdiagnoses. Now, these patients can track their behavior on their mobile device and the data is immediately transferred to their doctors for further analysis. Problem: Healthcare expenses are difficult to manage, let alone understand. Solution: Create a platform where patients can organize their health plan information, medical records, and bills, all in once place. Simplee is a dashboard, similar to Mint.com, where users can access personal records, pay bills, and see how much they have saved. Simplee educates the patient as well on confusing or complicated healthcare information. People are seeking transparency when it comes to their health, and with Simplee they have control over their personal data. This service can also address the problem of lack of information, providing insight into their medical history and any patterns that emerge.

Ginger.io is powered by patient behavior data. Simplee makes healthcare manageable.

Medify creates a better system for illness and symptom research. The internet is filled with inaccurate, biased content on health and wellness, and people are seeking real information.

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Industries poised for disruption
Local Government
The last keynote at SXSW and one of the more inspiring speeches of the conference was from Jennifer Pahlka, the founder of Code for America. CFA is similar to Teach For America in that it looks for individuals across the country to use their talent where it is needed. But instead of teachers to schools, CFA matches developers to local governments to create innovative tools that address specific local problems. Problem: Local government has a limited budget that prevents them from tending to all civic issues. Solution: Empower citizens to take on issues as a community. Jennifer Pahlka said, “Government is something we do together.” And one program that came out of Boston proved that. Adopt-a-Hydrant was first created in Boston as a way to save hydrants from being buried during major snowstorms. Each year during a major snowfall, fire hydrants would get buried, rendering them useless. The government didn’t have the time to shovel each one out. In response, a Code for America fellow called on the community to pitch in. Adopt-a-Hydrant uses data to show every hydrant in the city and users can indicate which hydrant they can dig out of the snow. The idea was so successful it was taken on by several other cities across the county.

Code for America’s site serves as a hub for tools and apps.

Problem: Government holds tons of big, valuable data, but very few people know how to access it and to use it to its full potential. Solution: Create a tool that converts big data into an API that developers can quickly understand and build upon. DataCouch is a Code for America fellow project. It is a web platform that serves as a store for open, accessible government data. Developers can creatively use the data to build apps for the local community or outside visitors. The site also serves as a forum for coders to share knowledge and collaborate on projects.

Adopt-a-Hydrant, one of CFA’s most successful projects.

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OPPORTUNITIES FOR MARKETERS
So, what can be learned from these trends? How can marketers make them actionable for their business? Admittedly, most of the startups listed here will not become the next Twitter or Facebook. What is far more likely is that many of their traits will survive in later ventures or will be adopted by major players. Because of that, consumer behavior and consumer expectation will be shaped by these traits and we believe that the following lessons will therefore be critical for marketers to heed in the future: want to focus in these areas, they must be mindful of the local companies that already exist. To compete in this space, they must find a sense of authenticity and trustworthiness within the community.

Build ecosystems of value.

Cut through the noise.

People are seeking more intimate networks, apps that unlock deeper new relationships, and tools that parse their overloaded social accounts for the most valuable content. Brands, first and foremost, should be concerned about not adding more clutter to the already noisy social spaces online, as consumers will be more willing than ever to opt out of brand communications. However, there is also an opportunity for brands to offer services and tools that cut through the online din, make the web easier to digest, and deliver what the user is looking for more easily.

Historically, brands have been obsessed with the value their product provides to their customers. Now, brands should be just as obsessed with the value their customers can create for one another. With new peer-to-peer networks, people are increasingly more comfortable sharing their garages, cars, homes, and personal items with others. They are consciously negotiating their privacy for returned social value. Brands can leverage this culture of openness by becoming a social matchmaker, introducing the consumer to new experiences, new information, and even new connections.

Capitalize on consumer intent.

Create experiences on a local level.

Mobile certainly allows for more geotargeted experiences - especially with ambient technology that delivers content based on our whereabouts. But local also applies to our neighborhoods. Technology is bringing our communities together, and individuals are finding a sense of pride and solidarity as a result. However, if larger brands

As users broadcast their upcoming plans, or opt in to events in advance, brands can begin to have a presence in the future. With current social networks, such as Foursquare, brands provide content or deals in the moment. Now, there is an opportunity for brands to craft a message for future patrons, and incentivize a potential customer to keep their plans. As consumers being to think of their activities further in advance, brands should be strategic in how they time their messaging as well.
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OPPORTUNITIES FOR MARKETERS
MAKING INVENTION WORK FOR YOU
“Disrupt yourself before someone does it for you.” – Google We believe that in order to survive, organizations must myopically chase their own obsolescence. All businesses face an increasingly connected and therefore more uncertain world, and with it, we all compete in a smaller pool, full of more demanding and less attentive consumers. Advertising can be a powerful driver of growth, but advertising alone cannot steer a firm to future success. That’s why we’ve created a department of Invention Strategists – a mix of researchers, creatives, technologists, and entrepreneurs – to help our clients experiment with new tools, products, and business models. Our group specializes in concepting and developing pilot programs that disrupt the status quo, ignite culture, and create business change. We also help brands find their social mission and work with the larger advertising force at Deutsch LA to pursue that mission through interactive ideas. If you're a business with an appetite for experimentation and marketing innovation, we'd love to partner with you. Get in touch. Bud Caddell VP, Invention Strategy bud.caddell@deutschinc.com

Use data to earn loyalty.

Looking at the range of startups this year, it is apparent that the most salient theme among them is data. Data is being put in the hands of the consumer as both a utility and a means of selfexpression. Whether it is the number of miles you ran, or your progress as a student, data can empower individuals to take action and potentially change behavior. If brands can provide worthwhile data, and a utility that surrounds it, they can turn engaged users into loyal customers. We think that a strong data offering could be a potent lure in loyalty programs.

Always be inventing. START-UPS CONSIDERED FOR THIS RESEARCH: SXSW 2012 was unique in that there was no clear “winner” among startups, like there was in years past. The most talked-about company was not a scrappy bunch of young founders, but rather a highly established brand. Nike stole the show with the introduction of the Fuelband, the simply designed wristband that tracks a users’ physical activity. Even the retail space and events around the launch were new and exciting. Nike is an example that brands can create innovative products that intersect technology and culture. By instilling a sense of fearlessness and a habit for experimentation, brands can be inventors, too. It’s also critical to remember that the success of Fuelband began long ago, with Nike’s first forays into developing products outside of their typical offerings.

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