Oh the “where do I find hot startups?” problem … VCs have been grappling with this for ages, resorting to such avenues as rampant gossiping, reading TechCrunch, informally tapping into early stage investor networks for intros to later stage deals and apparently, according to PandoDaily‘s Sarah Lacy, setting up formal programs where entrepreneurs who are “network rich and cash poor” serve as deal scouts. Makes sense.
Thus becoming the platform for startup discovery presents a huge opportunity for anyone who comes up with a grand solution: And, because which hot startup isn’t mobile these days, Apple itself is rumored to be trying to solve the problem with its own app discovery and promotion platform, aiming to go beyond its Featured section and expand into more intensive forms of app publicity. Its recent acquisition of Chomp harkens to this ambition and project, though as far as I can tell it still has a long way to go.
Being in on something early has become an increasingly hot commodity. But beyond word of mouth and TechCrunch, where’s an aspiring deal scout to go when they need to find the hippest startups? (Other than AngelList of course, but that’s a whole ‘nother post …)
Curious, I talked with one of the more informal Silicon Valley startup scouts earlier this week, and asked them about their process for finding cool new companies. The answer? Well, there’s an app for that of course. Many actually.
While it won’t cover non-mobile, non-consumer outliers like Palantir, this “deal scout” had a fascinating process, using iOS discovery apps to figure out which mobile startups were promising. The scout’s two most thumbed iOS apps for finding early stage startups were Chomp and Crosswalk, with Discovr Apps being used to check in on possible competitors. The scout took an hour each day to go through the “New” section of the App Store via Chomp, scrolling through thousands of apps looking for ones that fit the profile of a startup.
“You can tell which apps are going to be startups by reading the app name…. i.e. Pair, Highlight, Circle, Glimpse …. Words that are ‘Web 2.0,’ the scout went on. “Names that are singular words, Cloudy, Clear, Path, SideCar, are obvious technology startups. Words and/or sentences that are like…. ‘complete guide to,’ ‘tips & tricks for,’ ‘blah blah blah lite’ ‘religious jargon’…. are not startups.”
After scout used Chomp and Crosswalk to figure out what was trending, i.e. which mobile apps were seeing the most user acquisition, they then used Discovr Apps to highlight potential competitors. For example, for this article, we figured out that Zwapp, FrenzApp, AppGrooves, AppsFire and Appshopper were all app discovery competitors to Chomp and Crosswalk, using the Discovr Apps app.
But where do you go after you’ve found the newest, hottest apps? How can one tell what will be a good bet?
“It’s super hard to tell what’s going to be successful,” my source said, “I download them, and test the apps and then contact the founders, ask[ing] them questions about how it’s going, why they built it (i.e.what problem they’re solving), and where they see it going. In addition, the scout said that they check blogs and AngelList to find out whether or not early stage influencers or biggies like Sequoia had already invested.
They also mentioned that they didn’t use the Android market because it was very rare for a successful app to originate on Android and then cross over to iOS.
So should other deal scouts, or anyone who’s interested in early stage startups take this advice and download some apps that find other apps immediately? “If they want to find super early apps that may be potential ‘ins’ for investment, yes, they do/should use these apps,” the scout said. That, and wait until AngelList goes mobile.
Image via Olly
Founded in 2009 by Ben Keighran and Cathy Edwards, Chomp, Inc. is the only company to enable app search based on what an app actually does. One billion apps are being downloaded every month. As the number of apps explodes, it’s become difficult for users to find the perfect app for what they want to do. Chomp’s patent-pending algorithm is able to understand what an app does and what a user wants and then makes the...