International CES, the world's largest tech trade show, opens today in Las Vegas.
Though CES is mostly dominated by massive tech companies, 100 start-ups exhibited last year in Eureka Park, a section dedicated to early-stage companies. In 2013, far more will try their luck.
Inc. sat down with Gary Shapiro, CEO of the Consumer Electronics Association, which puts on the show, to talk about why start-ups should be there.
Why should start-ups attend a consumer tech show where big companies get most of the attention?
Well, I would go back 30 years ago to October 1981, when I attended my first board meeting of the association. The chairman of the board was from Panasonic, then the largest exhibitor at CES, and the discussion was whether to raise the rates of exhibiting at CES. He said, "Panasonic can afford it--it's a rounding error to us--but we always have to keep the show so that anyone with an idea can get exposure to thousands of journalists, investors, partners, and distributors for a very low cost."
The bottom line is that Eureka Park is a logical extension of CES. We try to have categories of companies, but now there are so many things developing that don't fall into categories. Our goal last year was 30 start-ups. We hit 100. The goal this year was 80 companies. We had to stop at 150 because we ran out of space.
Any notable start-up success stories last year?
One entrepreneur told us investor Mark Cuban walked by his booth, and he eventually ended up with millions of dollars in investment from Cuban. I know in talking to investors and others that [Eureka Park] was a very high-energy part of the show last year.
But the people who were exhibiting there weren't prepared for the onslaught of opportunities they had. Some of them didn't even have business cards, or they couldn't deal with the fact that someone wanted to buy their product or invest in them. It was like being a very thirsty person and having a huge fire hose to drink from. It was too much, but they all thought it was worthwhile.
Why separate the start-ups from the rest of the show?
It's a matter of logistics. By the time we leave this year's show, most of the space will be allocated for next year. Intel and Qualcomm and Verizon and Samsung and Panasonic will have chosen their space for next year--as will have 80% of the small businesses exhibiting, so it's a very difficult decision. As much as we love new entrants, like every event in the world, you have to accept the fact that these larger, older customers are paying the rent, and they get some preference. The advantage of Eureka Park is that we can put all [the start-ups] in one area.
Why should a fledgling start-up launch at CES, where the visibility might be high--but so are the stakes?
Participating in a live, interactive marketing event is essential for the success of any start-up, frankly. There's nothing more cost-effective. As much as I am an advocate for technology, I believe that the five-sense experience of a trade show is where people are forming opinions immediately. They're establishing relationships and figuring out if they can trust you and want to do business with you. You have the value of the audience. You also have the value of serendipity, which you don't really have in other media. When I spoke to Bill Gates about this, he said Microsoft was launched at trade shows like CES and Comdex. They allow companies to create the image that they're bigger than they really are.
Which tech trends should start-ups be watching this year?
You definitely can't ignore the explosion in sales of tablets and smartphones--they've changed many industries in terms of how consumers are getting information. Wireless everything is a huge trend. There's so much in the way of development in sensing devices. But probably the biggest thing for start-ups to focus on is how advertising is being purchased. Madison Avenue is here, and a lot of ad buying is going on, whether through Google or Facebook or something else. You have to pay attention to whom you want to reach and how to do it through technology. How you fashion your message depends upon the devices your customers are using.
Which CES start-ups are you excited about?
I talk about one in my book, Ninja Innovation. It's called HealthSpot. I fell upon them and convinced them to be in the show. Their product is like an ATM for health care. You sit down and it weighs you, takes your temperature and vitals, and then you hit a screen to list your symptoms and it links you up with the right doctor. Maybe it will flop--I don't know--but what a great idea.
At CES 2012, the big policy issue up for debate was SOPA. What legislative issues should Washington tackle this year?
One issue that is of great concern--and I hear this from our smallest companies as well as our biggest--is patent trolls. There's an opportunity there with Congress because businesses are really fed up. Immigration reform is another one. Microsoft is pushing something that would just help big companies get the best and the brightest--you'd have to pay a lot of money per visa to get people. That's not fair for small companies. We need more strategic immigration reform.