Conferences Don’t Make Startups, Investors Do

When tracking last week’s coverage of DEMOfall and TechCrunch 50 conferences, in particular all the buzz surrounding Yammer winning at TC50 and how righteous this decision is, I could not help but wonder if it was actually worth all the efforts for the startups to launch at one of the big events. Right now it looks like the majority of startups have already realized that launching at such a big event is not the wisest decision of all with so many companies competing for attention from media and potential users and good chances of never getting any coverage at all if the idea is not totally awesome. At the same time launching outside of big conferences, especially on a day without big events scheduled at all, could prove to be a chance of getting a much better coverage for your startup.

Yet all these conferences are still crowded with startups launching and fighting for attention from public and press there. So out of curiosity I’ve decided to take a look at last year’s TechCrunch 40 winner - the personal finance management company Mint - and see how it is doing now, a year after it received the main prize at last September’s TechCrunch event.

I have to admit that I have not used the site during this year for one simple reason - it is only intended for users from the US while it is simply impossible to connect one’s account to accounts with financial institutions from other countries. And since I had no personal experience with the startup, I just had to look at the available statistics.

A simple search on Compete has quickly made me realize that Mint was doing much better than I expected actually - with an impressive almost 1,000% growth of visitors over the year with almost half a million monthly visitors in August:

As you can see from the graph, the top prize at the TechCrunch 40 conference resulted in quite a nice traffic to Mint that unfortunately did not last. You can see for yourself that interest seemed to subside after the September event and the traffic was stable in January - February of 2008. But then something happened to Mint in March that resulted in huge growth that is both impressive and stable with no signs of stopping.

Since I was not heavily involved in tracking Mint news myself over this year I had to check their press section to see what was the wonderful event that happened in March. And I was not surprised that it was an investment - series B round of $12 million led by Benchmark.

The round A (of $4.7 million) was actually raised in April 2007 - well before the startup officially launched in September at TechCrunch 40. But that round did not seem to ensure stable growth for the project, nor did the top prize at the conference skyrocket it either. But Benchmark Capital that arrived in the beginning of March was obviously a huge help to Mint: the personal finance solution received lots of press coverage (see this video at Fox Business, for example) and a number of major industry awards, including two Webby People’s Voice Awards as a Best Financial Services Website and Best Banking and Bill Pay site, it was also among the top 100 products selected by Webware and PC World.

If I am not mistaken (but here I can’t be sure since I don’t have any documents to prove it), I believe that last spring I saw Mint banner appear on a number of blogs which must mean that they employed some of the money raised to sponsor a few blogs that could generate additional traffic to the site and some additional brand awareness.

And while it is obvious that the top prize at TechCrunch 40 conference must have helped the founder Aaron Patzer talk to prospective investors and was an additional argument proving why this particular startup was worth investors’ attention and money, it is still evident that it was not this particular award from TechCrunch that boosted success for Mint - it was huge money from investors along with their support and experience in promotion. Benchmarks Capital is sure to have enough experience with their portfolio featuring companies like eBay, Zimbra (acquired by Yahoo), MySQL (acquired by Sun), oDesk, Metacafe, Pageflakes and our beloved FriendFeed.

My conclusion is that while conferences are no doubt useful to get some buzz and find the right contacts, the right investor helping you do the job the way it should be done is much better than any prize from any conference.