Despite the advancements in business as a science during the 20th century, new ventures both inside and outside corporate walls continue to fail because of these issues. It is not due to lack of focus on entrepreneurship. Entrepreneurship and venture initiation are hot topics at business schools, the subjects of many books, and ones that in general, receive much attention. Yet, for the most part, the key part of starting a new venture — building something someone wants — has been overshadowed by understanding how to write a compelling business plan, the right way to structure an entity, and how to create “realistic” financial statements.

In one sense, it might seem fair to simply equip entrepreneurs with these more basic tools, relying on them to create the next big idea. It is not hard to imagine a business professor thinking to himself, “I’m giving paint to these artists. They’ll use what I am teaching them to bring structure to their ideas.” After all, can something creative like the “idea part” of entrepreneurship really be taught?

It turns out it can. It is what Steve Blank formalized in his Customer Development model and what Eric Ries describes as The Lean Startup. These frameworks shift away from the structure of entrepreneurship to the science of it. They focus on the core of what makes a startup successful, customers paying for a product they want.

For some, this background is not required. They are already applying customer development and lean startup principles. For others, the typical structural emphasis of entrepreneurship described here resonates and these solutions sound fresh and exciting.

The DC Lean Startup Circle

Last week, at the inaugural DC Lean Startup Circle (organized by Kevin Dewalt, Chris Bucchere, and yours truly), we had a good mix of those who were familiar with customer development and lean startup principles and those who are just learning about them. The exciting part, however, was that the room was full of those involved in DC’s entrepreneurial community, whether building products as new ventures, on the side, or as part of a larger organization.

Regardless of where people were at with understanding these frameworks or if they fully embraced them, what was awesome was that they motivated people to come out and discuss these ideas. To help set the stage, Kevin selected a couple of clips by Steve and Eric and those alone sparked quite a bit of debate and conversation.

DC has a strong and diverse tech community, especially with the federal government being in our backyards. What we are hoping with this meetup, however, is to see a more practical, “in the trenches” group of entrepreneurs, who want to approach the core part of entrepreneurship more as a profession and science and not as a lottery ticket.

For our February event, we will be shifting focus to the mobile world, and specifically the iPhone. Apple’s App Store creates a unique, challenging environment when it comes to applying customer development and lean startup principles. We will be exploring how, if at all, these frameworks can apply to the App Store through a panel discussion that I’ll moderate. If you are interested in attending, be sure to register on the DC Lean Startup Circle meetup page.

Watch me yell over the crowds at TECH cocktail DC 7. They actually had to do two different takes and sync them together (voice and video – hard to record a screen). Sorry for the green gum. :-)

More @tweebapp and http://www.tweebapp.com.

Steve believes sites like Facebook are the ones that are prepped for larger growth. Yet, he has been surprised by the way that Twitter has been able to continue to innovate and grab attention, pointing to Tweetie 2 as a recent example. Of course, Tweetie 2 was not made by Twitter. It’s arguable whether or not the greatest innovations of Twitter are being created by them (e.g., their forthcoming lists) or by those using its API as a platform.

That, in some ways, is related to the main takeaway from TWTRCON DC. Ultimately, it wasn’t a conference about learning to use Twitter. Rather, it was one showcasing how people and organizations from different backgrounds and industries are actually using it. Twitter for business, non-profits, government, etc. are all possible because of Twitter as a platform.

Major destination sites emerged at the birth of the consumer web. Amazon is known for books (and now more generally, E-tail), eBay for being a secondary market, Google for search, and Yahoo! for content. A number of second generation “Web 2.0″ sites have also arrived. Facebook is the current leader in being the online social graph. Wikipedia is where people go to look up information. Craigslist is the definitive online classified listing and the strangest monopoly in history. Where does Twitter fit in the mix?

Clearly, Twitter represents a type of identity management and social graph. It allows people to search for information, although information of a different nature (real-time). Many organizations are using Twitter for recruiting and job postings. It’s touching on many of the strengths, features, and focus of these more traditionally established destination sites yet it was not built to replace them.

The future of Twitter is in how people are using it now – as a platform. Look at how the practioners of TWTRCON (i.e., not the pundits) think about Twitter. It’s a means for them to connect, market, serve, donate, analyze, find, employ, interact, and more with those who have a mutual interest in doing so. The future of Twitter is in it facilitating the pulse of the planet. Whether it can reach that point and overcome challenges like getting the next million users or if we should want it to are two topics for another discussion. In the meantime, TWTRCON held a great conference, highlighting how people and companies are using Twitter to currently transform the way we live and work both on and offline.

• Manners are important on Twitter. Don’t yell. Or be awkward.
• Hack for improving level of engagement…the best business messages are about the audience. Turn your tweet inside out and make it about those listening to you.
• Twitter campaigns? Not so much.
• “I have a love / hate relationship with having a lot of followers.”
• Measure what matters most. Be patient and let your network grow organically.
• Flash communities spring up around #hash tags. Use interesting messages to get people using and tracking your hash tag.
  • Most of the ppl using multiple hash tags are spammers. Zapping SPAM needs to get better.
• “I have had embarrassingly great success with getting in the press. I’ve never sent a press release. The press has found me.”
• One word guide to social media – “be useful”
• Four word guide to social media – “Listen Learn Care Serve”

All of the panelist had a focus on early stage investments and engaged with their companies as angels or incubators. Since the event was focused on the government, Errol Arkilic of the NSF had the most relevant experience understanding the way it operated and how his organization functioned more along the lines of the private sector. Errol was proud of being able to do deals in four months to Dave McClure’s surprise, where he stated something along the lines, “I might die in four months.” More details about the event are on the GOAP blog.

The difference in perspective between celebrating or cringing at the four month investment cycle might be marked by Mark Walsh’s observation of the modus operandi of DC and Silicon Valley,

“The difference between DC and Silicon Valley is inertia versus urgency.”

That comment holds true when generalizing the DC area to be represented by the mega bureaucratic federal government. In the context of the event, it makes perfect sense. But I feel that it reinforces a stereotype of those who live outside DC, one perpetuated even by the event itself, that the only interesting innovations for this region are related to Gov 2.0 and helping the government adapt the ideas and models of Silicon Valley.

Having spent time in Silicon Valley and previously living in New York, Boston, Philadelphia, and now DC since 2003, I could generalize each region, as DC is often generalized. There are typically truths in generalizations and stereotypes but they often purposefully and sometimes ignorantly miss the details to simplify or support a point.

Being in the weeds, I can tell you that innovation and entrepreneurship have been happening in DC well before Gov 2.0. It’s highlighted in the strength and success of groups/events like TECH cocktail (co-founded by local Frank Gruber), Ignite DC, Refresh DC, Twin Tech, The Capital Cabal, and Social Matchbox, as well as in people and companies getting recognition outside of this region. I believe the DC metro area is uniquely positioned to breakout from the pack and become an increasingly important area for startups and technology innovation…aside from Gov 2.0. Here’s why:

For those unfamiliar with this area of the U.S., read some background on what demographers consider the Washington Metropolitan Area. I’ll use “DC” to represent this region, which consists of parts of Maryland, Virginia (referred to as “Northern Virginia”), and Washington, D.C., due to their close proximity to one another.

• DC has money. Five of the top ten highest income counties in the U.S. are in Virginia and Maryland, with three of those five in the top five. That’s mucho mula.
• DC has talent. Georgetown, George Washington, University of Maryland, and American University represent the established well-known schools, while George Mason was recently selected by U.S. News and World Report as the nation’s top “Up-and-Coming School.”
• DC has innovation. For the past five years, the DC metro area ranks as number six on the percent of startups distributed per state. LaunchBox Digital is a startup incubator program, much like Y Combinator, that just completed its second successful class of startups. The Northern Virginia Technology Council has 1,050 member companies and enterprises representing approximately 186,000 employees and is the largest technology council in the nation. And yes, we do have Gov 2.0.
• DC has history. No, I’m not referring to the kind you find on the National Mall (that’s not a place for shopping, btw). Remember a little company called AOL? Maybe you are trying to forget about them or still using their CDs as coasters. No matter how you feel, they brought the Internet to the common man. Now, that was a world (or country) changing idea.

The growth in DC in the six years I’ve been here has been incredible. A massive project, which will continue to fuel this momentum, is the extension of the rail system to the Dulles Airport. The result will be easier access from the exurbs of Northern Virginia through DC proper and up into Maryland.

It’s an exciting time to live in this area. The foundations have been laid for DC to become a major center for entrepreneurship, startups, and innovation. Get in on the ground floor, or as close to it, while you still can.

Here are some highlight of the companies I found most interesting –

TapMetrics

TapMetrics is a LaunchBox Digital startup that offers analytics for iPhone apps — but eventually will expand to other platforms. I previously met co-founder Chris Brown at iPhone Dev Camp D.C. His idea spun out from building iPhone apps — both under his own and client brands — and needing better insight into how to improve them.

TapMetrics provides both product (the app) analytics and sales data and includes neat little tools like the Tap Mini. Chris demoed some new features that will further streamline collecting insight about how an app is doing in the App Store.

Unblab

Tired of email overload? Unblab is a cloud-based system, which they call “Smart Cloud,” that uses machine learning to help identify the most important email in an inbox. Their first product is Gtriage, which works with Gmail and Google Apps. Another LaunchBox09 participant, the LaunchBox site also lists iTriage for the iPhone but it does not appear to be released or mentioned anywhere else yet.

Unblab will eventually focus on the enterprise market, positioning itself as a Postini for email overload. One issue on the consumer side — and a reason why I’m hesitant to use it — is that the tool scans and assumably stores some amount of data about an inbox on its servers.

Earth Aid

Earth Aid is basically Mint.com for household utilities. With a cleanly designed and intuitive site, Earth Aid is able to pull in data from most utility companies by accessing it through those providers front-end web portals. This circumvents tedious back-end integrations, providing users much more opportunity to have a complete perspective on energy use.

GrouperEye
GrouperEye has big plans to completely re-architect the college recruiting process. Instead of the traditional go to college campuses, interview lots of students, talk about resumes, etc. recruiting process, GrouperEye has built a platform that helps identify and surface top talent by allowing companies to see students do actual work.

Companies create “cases,” which challenge students to submit solutions. An example could be Disney requesting a new ride that should be designed. Students have forty days to submit the best solution, at which point the companies evaluate and select a winner. The incentive for students is a small cash prize and consideration for employment.

Launching in approximately twenty plus days, GrouperEye is focusing on building relationships with HR and recruiting departments to establish itself as the leader of this new approach.

Honorable mentions – Grasshopr, SEC Watch, wegora, WinTheTropy

Paradigms and Definitions
Much like Web 2.0, it is clear that people have different ideas, definitions, and ways to communicate what the real-time web is. Ron Conway suggested it be the “now” web, Mike Arrington prefers the “stream” paradigm, and Kevin Marks described it as “flow.”

Just like Web 2.0, there will be many ideas around what’s happening and no one will agree. But I don’t think that the moniker itself has truly been accepted yet. Will it be “real-time,” “stream,” “now,” “web 3.0.” or something else? My guess is that the CrunchUp might have solidified “real-time.” Ultimately, something will catch and the web warlords will finally be at rest — at least about the term.

Monetization
People love talking about what Twitter’s revenue model(s) will be. But how will monetization work for the larger real-time web?

Ron Conway’s “Top Ten Monetization Opportunities for Real-time” consists of lead generation (including acquiring followers), coupons, analytics, CRM, payments, commerce, user authentication, syndication of new ads, context advertising, and display advertising.

Some of the companies that demoed focused on these exact topics – Twitter Sparq (self-proclaimed “AdWords for Twitter”), Bantam Live (social CRM), and Twitturly inView (monitoring and reporting). In general, these were some of the most interesting companies that presented at CrunchUp.

Other Interesting Products
Beyond those listed above, the other interesting products or product updates of the day were the following -

PubSubHubbub (Google)
Considering how much people have complained about RSS being slow, the entire audience should’ve stood up and cheered when Brad Fitzpatrick and Brett Slatkin showed off PubSubHubbub. It allows RSS updates to be received without having to poll a feed.

Brad and Brett showed a WordPress post where the feed item showed up in Google Reader before the WordPress page finished loading after the save. They also mentinoned that they were chatting over ATOM and RSS. Crazy.

A big surprise is that PubSubHubbub should now be active on FeedBurner feeds that have PingShot enabled. Dave Winer has two write-ups, describing some of the finer intricacies.

Seesmic
Seesmic has launched a cool web version of their product. It includes OAuth support, a couple of different views of the stream, and syncing Twitter searches with the Twitter Search API.

They also have a number of new updates to their desktop product (now at v0.4) including reducing real estate, all columns being free, and changes in column width. Finally, Loic announced a forthcoming iPhone app.

Brizzly
Brizzly is a daring project by Thing Labs that basically creates a new web interface for Twitter. It includes features such as multiple account support, real-time responses to direct messages, support for drafts, group management, maintaining timeline reading position, and more generally, a really well-designed interface. TechCrunch has more details.

TuneIn
TuneIn might have received the biggest buzz of the day. Partially described it as a “TiVo for Twitter,” tuneit helps lessen the problem of not always paying attention to the stream.

Several features of TuneIn include the ability to sort a timeline by popularity, viewing media (articles, photos, videos) versus just updates, and seeing a “channel,” which is basically viewing another user’s timeline the way he sees it. The latter to me, is one of the most interesting aspects. Check out this video to learn more.

Logistics Suffered
The Fox Theatre is a beautiful venue but it has major shortcomings for an event like this one. Mainly, it was super tight. There were also some basic slaps in the face for the attendees, which had nothing to do with the venue. The biggest was that only the “press” received power outlets for their laptops and other devices. That meant that for most folks, without powering up somewhere else, there was no way to keep laptops running throughout the day.

“Press” also received preferential seating in the first several rows. So, even if an attendee got there early, he couldn’t sit in the reserved area, which was a decent portion of the table seating. There were many in the “press,” who amounted to “A-list” bloggers that rolled in very late and got prime seating with power outlets.

Two final comments about the logistics of the event: 1) It started late and ran late all day. At one point, it was an hour behind schedule. The result was that some sessions and demos were rushed. Overall, it was hard to gauge when a session or demo was actually going to happen. 2) WiFi was spotty at best. I gave up on WiFi within the first fifteen minutes and switched to my laptop connect card. Many demos were run off of cards because the WiFi was so bad. Tech operations, in general, were not very smooth.

As far as events go, I can appreciate that the CrunchUp was relatively reasonably priced. But I don’t think that a strapped budget was the source of these problems.

Concluding Thoughts
Overall, the event seemed fairly shortsighted on real-time. Real-time basically appeared as Twitter and Twitter Search. Other topics like SPAM, non-text media like photo and video, larger societal and cultural impacts, etc. were barely touched or mentioned during the day.

SPAM, for example, would have been very relevant, considering that once “#crunchup” became a trending topic on Twitter, a large part of the stream became polluted.

Considering the number of demos given and the extremely large panels, it would be unrealistic for any other topics to be explored in-depth. Ultimately, I think TechCrunch packed significant content into one day. They probably should have just narrowed the focus and set expectations accordingly. For example, one or two more sessions like the morning, along with all the demos, would have been a good balance.

I expect with the number of apps launching in this space and the interest level in the tech community, there will be another, possibly larger event soon.

Kimbal Musk (OneRiot): Real-time search is the right answer right now. Traditional search is the right answer over all time.

Danny Sullivan (Search Engine Land):  When you start talking real-time search, we need to have better definitions of what it is. When I said Twitter Search is real-time search, I’m saying that we can do updates and within seconds, it is out there and indexed.

Gerry Campbell (Collecta): There are two different models. There are highlights of the game…and there is the game itself.

Matt Cutts (Google): From Google, we’ve thought about freshness from the beginning. It was clear relevance, comprehensiveness, and freshness were important from ealry on. People don’t always want to do Google Blog Search to get blog results; they want it integrated.

Vipul Ved Prakash (Topsy): We sample search.twitter.com. The Twitter feed is one of the largest and fastest growing sources but most of the web is turning into streams with attributions.

Chris Cox: We don’t think really use the public IM metaphor.

Bret Taylor: Updates with media have the most comments.

Chris Cox: Those updates that are in the collective conscious but never articulated get a lot of attention.

In the early days, spikes of traffic would be seen during commercial days. Shared moments like Michael Jackson, Iran, etc. are now creating largest spikes.

Schnofeld: How is the re-design being taken now?

Cox: We look at the data of how people are using the site. We are testing a bunch of versions of the homepage.

Taylor: Value is not what people are saying now…but what my social network is saying now.

Dorsey: I’m not following Shaq per say…but rather his updates. What that allows me to do is that if I no longer find value, I can leave it easily and I can move it to some other aspect or person or company that I find valuable.

Conway: Stream doesn’t really tell you anything about the social component. Content is being shared through the social web.

Arrington: Naked Truth conference talked about how companies made up. Every company said they buy traffic on Google and convert. The most valuable part of Twitter they can’t pay for.

Borthwick: In my experience the most compelling monetization models have been created online and follow user experience.

Conway: TweetDeck and Seesmic have created dashboards to filter this onslaught of new content and data.

Borthwick: The first filter is a social filter…you pick your followers. Then topical (search). Retweets and similar.

Conway: Churn is huge. All these companies will iterate and reduce churn.

Borthwick: There was a good reason SXSW was a spark plug.

Laura Fitton (@pistachio) asks about Amazon not allowing affiliate links on Twitter. Panelists say it’s only a matter of time before they come to their senses.

Question from audience – Can Twitter be overcome since it’s so early, similar to early search engines (e.g., Alta Vista) being ovetaken by Twitter?

Conway: Twitter has brand.

Arrington: “What is real-time? Is it just Twitter?”

Borthwick: “What this opportunity has done is bring a massive amount of new content to the web….the web is about content.”

Borthwick: Making the web “live” and filterable, sortable.

Borthwick: “Betaworks is an operating company. We build a few things, we invest in a few things, and we bought a few things.”

Conway: “I invest in great entrepreneurs first…then the idea…then how much intellectual property have they got.”

Conway: “Manipulate and monetize” real-time content.

Borthwick: We are still learning about this new part of the web.

Conway: “Whatever this is…it is early, early days….this is Google in 1998.”

Conway’s Top Ten Monetization Opportunities in Real-Time

10. Lead Generation

9. Coupons via “Now” Web

8. Analytics

7. CRM (they just invested in CoTweet)

6. Payments 

5. Commerce

4. User Authentication

3. Syndication of New Ads

2. Context Advertising

1. Display Advertising

Bonus – Acquiring Followers

ThinkFree is an online MS Office alternative, offered at the low low cost of zero dollars. One of the distinguishing factors of it versus its competitors is the “Power Edit” mode. With Power Edit, it really feels like you are in Office.

If online Office suites hope to gain the adoption of mainstream users, they are going to need to follow this approach. While other online Office products are useful, the environments they offer still don’t match what most users have come to expect in Word, Excel, Powerpoint, and other MS applications.

Even with lower or zero costs, users won’t switch if they can’t do what they normally can. ThinkFree is onto something here…keep an eye on them.

See ThinkFree in Action

In this clip, Mike shares some thoughts on why “Enterprise 2.0″ is now gaining attention, some of the players in the space, and who will be authoring his newest blog.

A special thanks to him for sparing a couple of minutes with us.

Joe is a talented Joomla programmer, who recently is back to freelancing now. Here were some of his thoughts:

There were two takes on Ruby and Ruby on Rails: 1) The 10 to 1 productivity gain is irresistible. 2) Programmers comprise a very small fraction of the overall IT budget. However, as a developer, I felt that these views were missing some key points. First, a productivity gain of that magnitude makes it feasible to implement a new idea several different ways, get feedback, and debug the top choice all in the time it would take to write it once in another language. Second, if you can save your developers that much time, they be able to build more tools to help the IT department save money. Finally, great developers love using good tools. You have a much better shot of attracting and retaining talent if developers have the flexibility to choose the best solutions for each situation.

Dennis on the other hand looks at things from a much more strategic and managerial perspective. He writes about one of the Technology Showcase competitors Voxant:

Voxant has developed content licensing relationships with a variety of video, image, and text news sources including CBS, Fox News and Bloomberg. Voxant re-licenses the content, including built-in advertising and streaming video, to individual web sites and blog operators.

…

Assuming this all works as volume and complexity scale up, what Voxant is doing is, in effect, developing a new distribution platform that “traditional” news outlets can use that balances the needs of monetization with the “viral marketing” model where participation, sharing, and relationships drive ever-growing volume.

Thanks to Dennis, Joe, and others who helped me out at the conference.

Brian Williams – the CEO of Viget Labs - is a partner of ExecutiveBiz (the organizers behind TNNI). He was kind to spare a couple of minutes to tell us about the motivation of TNNI, as well as what Viget Labs is all about.

It’s going to be a great day. Coverage of the event is brought to you on this blog today by Freshbooks, PipelineDeals.com, and ConnectBeam.

I shared a thought on TNNI’s social network last week that highlights this philosophy:

When speaking with those who don’t “get it” [Web 2.0], it’s more important to articulate the ideas of what it is doing rather than to point to technology or even tools. Instead of stating Web 2.0 is AJAX, RSS, blogging, or even social networks, communicate that it makes the web faster (AJAX), more accessible (RSS), easier to publish to (blogging), and a better tool to connect with friends and colleagues (social networks).

The bottom line: Web 2.0 can help make you more productive doing the things you normally do online.

In particular, my friend Doug Kushin (who I hope to introduce more formally soon) and I are planning out what I’ve dubbed our “Communication Calendar” for the day. It consists of what coverage we definitely want to get, where we should be, and specifically who we are trying to talk with as the day unfolds.

I’ll be covering the conference both here and on the TNNI site. Doug is going to help with doing some video, so over the course of the day, you may even get a brief video clip of the day’s events. Our primary goal, however, will be to get as much footage as possible, so that we can create a TNNI Highlights reel.

For a more concise version of how to blog a conference, check out some of Brian Oberkirch’s thoughts.