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Published February 1, 2008 at 2:25 PM
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 Palm Desert, Calif.--This year's crop of startups presenting their wares at Demo was stronger than last year. In general, they were better funded, arrived from further away and had thought harder about their business models. Few led me to believe that many durable stand alone companies were going to be born in the desert. However, an abnormally large percentage of these companies look poised to achieve healthy returns for their participating investors and entrepreneurs. Still, too many of the companies convinced themselves that the very coolness of their products will attract users. The ones at the top of the list thought this challenge and came up with something inherent in their service to address the marketing challenge.
In drawing up a what I consider to be the best venture capital investment candidates in order from best to worst, I tried to speak to a representative from each company on the exhibition floor. If that wasn't possible, I watched the company demo online or in person. I've excluded the publicly traded companies presenting products at the show. And I've decided to bunch in the unfunded early-stage companies with the more polished, later stage startups that have raised a few rounds of capital, but held those more mature companies to a higher standard.
Below is my ranking of every Demo startup from one to 72. For the best venture capital investment ideas, start from the top. For pure entertainment, read from the bottom up: - Joshua Jaffe
- Xtranormal - I can't wait to use this character-based online messaging and story telling tool for work and pleasure. And I'm not even in their targeted youth market. This unique online service should takeoff and yield plentiful virtual goods profits when it launches in April.
- Atlaspost.com - Place dinosaurs and castles on your neighborhood's Google map. Just silly enough to succeed beyond all expectations.
- HubDub - More than a news aggregator, it's fun, encourages community and if its predictions prove to be accurate, well, that will open up a lot of possibilities.
- Iterasi - Archiving live web pages is cool, but a novelty; becoming the web's definitive legal notary is big business.
- LiveScribe - The $50 coupon I picked up at the booth notwithstanding, this is an incredible product with an ambitious business plan to build a development environment around its pen and voice recording technology. VantagePoint Venture Partners should be lauded for spending $23 million to put this to the test.
- SupportSpace - This contingent workforce model borrowed from LiveOps is going to be an immediate hit with lots of room to grow into the $20 billion IT support market.
- StackSafe - I don't know much about IT infrastructure but the costs of downtime are obvious.
- Semingo - Delver is the best approach to social search I've seen. Throw in a beautiful user interface and you can get a huge Series B round later this year.
- Visible Measures - Its advanced online video analytics service should scare the bejesus out of slow-moving media companies and advertising agencies.
- SpeakLike - Real-time online translation services should be a hit and I love how costs decline as more phrases and sentences are archived.
- SceneCaster - You can't argue with its claim as the fastest 3D application on the web when it includes virtual worlds. And unlike Second Life and the like, its new SceneWeaver creates an online universe distributed across the web.
- Aternity - Clear ROI for enterprises deploying this monitoring platform explains its $75,000 price tag and the company's $13 million raised.
- blist - A powerful online database for idiots? How did these guys know I would be in attendance.
- SproutBuilder - Widget development tools for the masses made in Hawaii. What's not to like?
- Voyant - It's democratizing financial planning with free and easy to use tools that should support a lead gen-supported business.
- MoBeam - As newspaper decline, printed coupons will go digital. This explains MoBeam's $34 million raised since 1999.
- Mandiant - What do I know about IT security?
- Sterna Technologies - SaaS plus business intelligence. If you could throw in virtualization, it would be too hot to handle.
- iLeonardo - This research tool gets stronger as more use it; plus you have to respect founder Josh Rosen's frugalness obtaining a two for one discount off the Demo entry fee (see Cozimo below).
- Celsias - I'm rooting for the Kiwis and corporate social responsibility is going to become big business faster than people think.
- Circos - Hard to lose in search but too early to tell whether this technology is truly breakthrough.
- Vidyo - It won't be long before Cisco comes calling to acquire this affordable and easy to use web conferencing solution.
- StandOut Jobs - Enterprise 2.0 in action. This online recruitment tool will be used by scores of corporate web sites at this time next year.
- Education.com - The hits keep coming in vertical search.
- TubeMogul - There's nothing not to like about an analytics and distribution service for the growing online video sector except for all the competition forcing them to constantly stay on the cutting edge.
- Green Plug - Solves a real problem and putting the word 'green' in your company name can't hurt these days.
- YouChoose - One new member per minute is hard to argue with.
- Squidcast - This could finally be an economical solution to sending big files over the web. Good timing as HD video sharing is poised for takeoff.
- Step Labs - Its hands free calling software should take off as talking on the mobile phone while driving gets outlawed in more places.
- Huddle.net - I'm rooting for the VCs from Bath in this one, which is leveraging social media to spark demand for its enterprise collaboration tool
- Hypermesh Networks - The first version of content delivery networks did well, CDN 2.0 could do better.
- Acesis - One of these days someone is going to get online healthcare recordkeeping right.
- Toktumi - With what might be the best name of the show, its affordable office phone solution will be a hit if it can reach the small and medium sized business market.
- Pathworks Software - Walking by the Helpstream launch makes me wonder if there will be an online collaboration-focused Demo conference later this year.
- Kaazing - Sounds like this Java environment for web browsers is big deal.
- LiquidPlanner - Despite a nice UI and good business model, this would be better as part of a larger offering.
- Eyealike - Online video copyright search will find customers but spinoffs never seem to really hit it big.
- Flypaper - Adobe will come calling within 18 months if these guys can execute.
- Nirvanix - BitGravity - The first version of content delivery networks did well, CDN 2.0 could do better.
- Ribbit - I understand wanting to get PC functionality on a phone, but phone functionality on a PC?
- HealthPricer - The hits keep coming in vertical search.
- Seesmic - Could end up as a nice bolt-on acquisition for a larger company if it can figure out how to grow from 30,000 beta video conversationalists to 3 million active gabbers.
- Moli.com - Despite what I perceive to be $55 million in 'dumb money' injected into this startup and the monopolies Facebook, LinkedIn and MySpace have built around social networking, Moli.com is addressing the problem of privacy and multiple profiles for one network.
- Liquidus - Without a lot of other online ad startups in attendance, this video-focused ad distributor looked okay.
- iVideoSongs - Won't be huge, but by creating barriers to entry through deals with publishers and artists like a besuited John Oates create the makings of a successful online music learning business.
- NotchUp - The online employment market is the gift that keeps on giving as each new startup generation applies the latest technology to it. But I don't trust a company that says I deserve $640 for each job interview I participate in.
- Skyfire - Obviously very useful to have a proper browser on a non-iPhone phone but is the timing right for a business based on off-deck applications?
- 800 Genie - Useful e-mail to voice products but marketing weakness will doom this company.
- Jodange - Somehow I missed them on the exhibition floor and the online demo is unavailable right now so I'm basing this on even less than normal but text analytics is a powerful, but difficult, technology to deploy right now.
- Zodigo - Remind me again, why do I want to buy content for my mobile phone on my set top box?
- Rove Mobile - An unfortunate name notwithstanding, I couldn't distinguish PCMobilizr from Soonr and other remote access services.
- CellSpin - A minor step forward in media mobile sharing.
- BitGravity - The first version of content delivery networks did well, CDN 2.0 could do better.
- Redux - Smart venture backers but I'm not convinced search as a platform for friend discovery will find a following online.
- Cozimo - I guess this collaboration trend has legs. Targeting a few specific industries for media collaboration might just work.
- Movial - Nice stuff but are people really interested in downloading another communication client.
- Review2Buy - Targeting a major problem with a viable solution of offering mobile comparison shopping but it seems too good to be true.
- Santrum Networks - Its BloCafe blog on steroids product is a minor step forward in online communications.
- SiloBreaker - Neat enterprise research technology but business model concerns are hard to shunt aside.
- Chalex - Chalex's BpDam online collaboration software service made me think that a VC should fund a contrarian investment into an anti-collaboration software tool.
- Joggle - Nice, clean interface that moves photo organization forward a few inches. I guess Fabrik has to spend its $51.3 in capital raised somewhere.
- KonoLive - If you haven't noticed yet, the online collaboration software market is a tad competitive.
- GoldMail - How can a startup separate itself from all the other improved messaging products out there?
- TimeDriver - I have a bias against startups founded eight years ago launching new products now.
- Yoics - It was sad watching them try to pitch Walt Mossberg on their IM service for devices.
- LiquidTalk - Aren't we beyond the point where someone thinks you can build a business on podcasts alone?
- Capzles - They've torn a page out of FilmLoop's book. One bankruptcy filing later, that may not be the best idea.
- Catalyst Web Services - Google Apps without Google's marketing muscle. Yah!
- LegiTime - SMS in the workplace? Big possibilities if they're targeting the child labor market.
- good2gether - It's noble ambitions will come crashing down when it finds that it won't achieve enough page views to support its advertising model.
- Buzka - I'm rooting for the guys from Perth but these Buzka PopNet hosted social network will find it tough to penetrate the market.
- Citiport - I love what these guys from Taiwan are doing to help travelers meet up with locals. So, like indie film startup Jaman last year, Citiport earns the final spot this year as the most high-minded, but least commericially viable startup.
Here are some other analysts' top picks from Demo:
Joshua Jaffe is general manager of TechConfidential.com.
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Very useful and unique (as far as I found...) ranking by business viability. There are lots of others that cover DEMO by the cool factor alone, and here is a good list based on the measure that really matters; Business value!
Of course, being a presenter at the #18 spot....I would argue for a much higher ranking...but it is the approach this blog takes, which is important. Even if I'd prefer a higher spot...:o)