The Consumer Electronics Show is great for getting buzz, but it's no guarantee for success for start-ups. Here's what it takes to survive after Las Vegas.
IF YOU CAN MAKE IT HERE... can you make it anywhere? Not exactly. CES, the world's largest annual consumer technology trade show is expected to feature 2,700 exhibitors showing off their latest products and services to about 140,000 attendees. Here's why it's tricky to make those impressions last.
LAS VEGAS—Tech companies come in droves to the Consumer Electronics Show. They announce, they demo, they dazzle the crowds. And then every year, a number of them pack up and head home only for their products to fall into obscurity or fail outright.
More than 50 percent of new technology products that enter the market fail, according to the Association of International Product Marketing and Management. Remember HP's Touchpad? Microsoft's Zune? HP's foray into the TV business? The moral of the story is: Even the big guys stumble.
I don't know what the figure would be for products that debut at CES, but it's safe to say that the world probably won't know or care about a fair number of the 2,700 exhibitors after the show ends Friday.
That's the nature of being in the technology game, says John Hamm, CEO of Accept Software, a company that helps tech companies such as Nokia improve their product planning cycles and bring new gadgets to market. Product development cycles last all of about six to nine months and within that time, companies must do everything from invent and engineer their products, to test, market, and distribute them.
It's no wonder even the big brands with sizeable R&D budgets launch flops at CES. Small companies have an even tougher time. "HP can come out with something and screw it up several times in a row before they finally get it right," Hamm says. Start-ups don't have that luxury. They must get their innovation right and meet customers' expectations as early as possible, he says.
So what kinds of companies will be left standing long after CES 2012?
Not necessarily the companies with the most dazzle. "Ease-of-use and simplicity continue to be in my mind where a young company can end-run everyone else," Hamm says. He's watching CES from afar this year but says he'd be on the lookout for start-ups like Dropbox that solve problems elegantly. "No on really used the cloud before them, even though VCs put a lot of money in cloud companies. Then Dropbox came along and said, 'you guys are making this way too hard.'"
Google's Eric Schmidt put it another way during an interview with CNET at a conference session Tuesday: "The trick to consumer products is to make them work"—and not just on their own, but work seamlessly within an ecosystem of hardware, software, content, and services.
With that in mind, here are a few products that will be on my radar once the CES tech circus leaves town:
HD video conferencing company Vidyo. This is the technology behind the video chat functionality of Google+. The promise is high-quality video and low latency with no special equipment required—you just need a standard broadband connection and a Web cam. Unlike most other video conferencing solutions, Vidyo's architecture doesn't use a centralized bridge (known as a multipoint control unit or MCU) to connect call participants. This means the video and audio aren't processed though one bottleneck. I'll be trying this out after CES. New Jersey-based Vidyo has raised $97 million in VC funding since its founding in 2005.
Neat scanners and NeatCloud. OK, so maybe this Inc. 5000 company (#2362 in 2011) caught my attention because I'm two days into CES and already drowning in receipts and expense reports. But its smart-scanning capabilities and simple interface are impressive. The company makes desktop and mobile scanners that use optical character recognition and patented parsing technology to pull critical information you need from receipts, business cards, and documents and generate expense reports. It will even let you tag expenses with IRS codes and quickly export to Turbo Tax or Quicken. The company announced its forthcoming cloud solution at CES, which will let you share files and folders easily with your accountant. An iPhone app is coming soon too.
Apple accessories from a little unassuming design company called Ten One Design. With so many high-tech gizmos stealing the show at CES, why pay attention to a start-up that makes simple things like a magnetic stand, stylus pen, and game controller for iPads? Because a lot of companies try to ride on Apple's coattails with accessories but few match Apple's functionality and aesthetic. Ten One Design does. The company's products made it into big retailers like Target and Walmart just in time for the 2011 holiday season.