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Mobile Startups: Tip of the Iceberg, Say Venture Capitalists

Got bad posture? Stick an adhesive sensor on your back and let your smartphone remind you to stop slouching. That's a new mobile solution, called LUMOback, presented this week during DEMO Fall 2011 in Silicon Valley.

More than a dozen mobile startups presented their innovations, ranging from MeMeTales, a publishing platform for children stories, to uTemporis, an app that serves up events and activities based on free time slots on your mobile phone calendar, to Zazu Mornings, an app that wakes you up with a voice that goes over your appointments and the weather.

Two groups of venture capitalists and former entrepreneurs judged the presentations - at times harshly. "I like companies that tackle big problems," says Bill Maris, managing partner at Google Ventures. "Some companies feel like features of potential products."

Adds Satish Dharmaraj, managing director of RedPoint Ventures: "The ideas themselves didn't feel like they were going to capture that entire market."

A common theme among venture capitalists is that some of the mobile startups have seeds of great ideas but just don't go far enough in their vision.

For instance, Looping, an app using sound-based patented technology that lets customers collect points and redeem rewards over a mobile phone at the point of sale, is aimed at strengthening customer loyalty. "Loyalty is a crowded space," says Trevor Healy, CEO of Amobee, adding that it would be more interesting as a payment verification platform.

To his credit, Dani Alyamour, founder of Looping, knows mobile payment is the future of his business. But he's willing to go after loyalty programs initially--the low-hanging fruit--in order to get small businesses to buy into his solution. With mobile payments, he says, "we don't want to get lost in a pilot program."

SeekDroid, which enables Android users to find lost phones and remotely lock and wipe them, didn't perk panelists' interests until the spokesperson, at the end of the presentation, mentioned that the solution could be used to manage fleets of phones for small businesses.

Another troublesome presentation: FieldTest, which provides templates and a service for quickly getting your mobile app idea to market, sounded like a good idea at first. But then the presenters showed an amateurish app icon while illustrating the process of bringing an app to market that didn't resonate with the panelists. App design, even icons, is a valued profession and critical to success--it should not be taken lightly, panelists say.

(For more on app icon design, check out iPhone App Logos: 10 of the Best and Worst.)

Whether you've got physical sensors on your back connected to a mobile phone app or you're waking up to the sounds of a talking smartphone like in futuristic movies (not the post-apocalypse kind), startups are only beginning to explore the mobile potential.

"It's the tip of the iceberg of what's ahead," says Dana Stadler, general partner of Matrix Partners.

Tom Kaneshige covers Apple and Networking for CIO.com. Follow Tom on Twitter @kaneshige. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Tom at tkanshige@cio.com


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