The New Seattle Startup Index for September/2008

How many will survive?

Like most websites/startups they are nothing more than ....oh well --you can read more by clicking on the signature

Hi Marcelo,

I congratulate you for creating this list, and also for striving to make it more and more relevant.

I do think, however, that you're going to run into a great deal of (probably appropriate) criticism if you try to divine which sites are "hobby" and which are "real businesses". Do you really know enough about the motives of all 295 companies on the list?

And what is the measure? Number of employees? For profit or not? Venture funds raised?

Remember that many seemingly "hobby" efforts often do evolve into very real businesses. The culling of the list is bound to make some errors, and will unnecessarily penalize those that are deliberately keeping costs very low during a difficult fundraising period. You'll have to field numerous critiques from those who lost the list, then re-add them the following month, further distorting the moves up or down, and making a lot of people unhappy in the process.

And on the test of what is a "true company" or not, is it truly the right value judgement to say that those who go the VC route are somehow more legitimate an enterprise than those who do not? (I say that as both a past founder/ceo of a highly successful VC-backed company, current chairman of another, and operator of a small virtual company.)

Selfishly, BigOven.com is in this boat, and could arguably be put in either category. BigOven.com (now rising to #14 on your current list) is still a very small, virtual company. But it's a legitimate, for-profit and profitable company. In terms of unique users (and even perhaps revenue) per employee, it handily beats companies like Zillow.com. Yet moneys raised have been entirely internal.

It gets about 1.6 million unique users a month, and we sell the #1 best-selling recipe application for Windows, and are a rising social network about food. Is it a hobby effort? I'd argue, no. But it's run on a very thin cost structure, deliberately so.

I urge you not to try to divine which sites are hobby and which are real businesses. That'll only get you unnecessary criticism. The data you provide, and the Seattle2.0 networking you provide is extremely helpful and most appreciated.

I think you answer the question yourself Steve.

"many seemingly 'hobby' efforts often do evolve into a very real business".

So, yes, there are hobby companies, and there are one that will move into becoming real businesses.

I don't dispute that hobbies are different than businesses. They are.

But my point is that divining which is which is very difficult, particularly because the actual transition from hobby into a real business is usually opaque to outsiders.

For instance, can you say with certainty when 43things.com went from a hobby/incubation to a very real business? Or Twitter.com? What criteria would you use? If it's just the collective opinion of others, it's going to be subject to a lot of conflict...

Why don't we let the readers decide which one has the most potential? I see you are using adsense even though your main sponsor is widgetbuck. I don't blame you for that as adsens gives more $$$ and easier to install.

I guess I disagree with the "crowd gets to decide what's a hobby and what's not" approach.

First off, the inner workings of private companies are often pretty opaque to most people.

Are you really prepared to go through the list and say which of the 300 or so companies listed are hobbies and which are not? What criteria would you use? When would you say Twitter became a real business (if at all)? Or 43things.com?

Second, the crowd that reads the blogs is a small subset of folks; hardly representative.

On your specific AdSense point, that's a currently very tiny portion of BigOven's overall revenues; rather deliberately so at present. We also sell leading cooking software, sell cookware/cookbooks on the site, provide print-your-own cookbooks that people create and buy, have data distribution partnerships for other revenue, and more. Not sure what you mean by the point about Widgetbucks... they're not a sponsor. In fact, BigOven doesn't use them at all. (There -is- a free widget from widgetbox that is available, but again, that's a small portion of the site -- it's displaying the Recipe of the Day RSS feed, which is also available as a Vista Desktop Widget.)

This correction/clarification above, I hope, reinforces my basic point -- that the workings of private companies (e.g., the revenue model, revenue status, etc.), and their transition from "hobby" to "real business" is sometimes very hard for an individual, or a crowd, to divine from the outside. The site is quite profitable today, and growing its userbase and pageviews at greater than 400% per year. That's good enough to call it a real business to me. But when we crossed over that line, that's a little hard to pin down to a day, week, month, or even I'd say, a year.

Personally, I'm not prepared to vote on the list of 300 or so Seattle sites listed and really peg, with certainty, which are "hobby" sites and which are true businesses.

Perhaps a compromise: Via a web form, companies/sites on the list can voluntarily self-indicate whether they are a real, for-profit business, or whether they are a hobby.

They'd have to choose one category or the other. By default, they are assumed to be real busineses. For those sites in the "gray area" between hobbies and real ventures, self-assessment of the goal is probably the only accurate measure.

Steve, about adsense -Wine is referring to this site and not yours .