Thoughts on the Naked Truth, from Picnik’s Jonathan Sposato

Yes, I’m taking the day off and letting other people (the actual participants) tell you what they took away from the inspiring tech events in Seattle last night. I asked panelist Jonathan Sposato, the CEO of Seattle-based Picnik, for his thoughts on the Naked Truth spectacle at Olympic Sculpture Park, which was organized by Glenn Kelman of Redfin, along with Madrona Venture Group, Fenwick & West, and Square 1 Bank. Below are Sposato’s comments and photos. (Also check out Kelman’s roundup of the event.)

Jonathan Sposato writes:

When I came upon the premises I was immediately struck by three observations. The common theme here is that as a place to do business, Seattle has finally arrived.

1. The Olympic Sculpture Park is an absolutely gorgeous venue for this. Even as I was on stage my eyes couldn’t help but drift off towards the jaw-droppingly stunning landscapes. The designed environment really rivals anything in LA (the Getty) or NYC (Metropolitan Museum of Art’s rooftop garden).

2. That the startup community in Seattle is a numerous and dynamic crowd. I heard well over 500 people attended and from the many great questions asked, people seemed genuinely into the details of how companies make money in today’s economy.

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Greg Gottesman of Madrona Venture Group entertains the crowd as emcee of the event in the outdoor amphitheatre of Olympic Sculpture Park

Greg Gottesman of Madrona Venture Group entertains the crowd as emcee of the event in the outdoor amphitheatre of Olympic Sculpture Park

3. Excluding myself; the diversity and caliber of the panelists was super high. They included Mike Arrington of TechCrunch, Fred Vogelstein of Wired, Damon Darlin of the New York Times, Fred Wilson of Union Square Partners, Glenn Kelman of Redfin, Ethan Lowry of Urbanspoon, and Brad Jefferson of Animoto. All brought interesting perspectives I found enriching.

Overall the event was a lot of fun, and I personally came away heartened by the fact that there is indeed a clear cultural shift towards revenue as a primary focus for Seattle’s startup community. I don’t recall hearing a single question about creating a startup to merely maximize for a speedy exit.

I’ve done many of these kinds of panels before and there are often several challenges for the participants. The hardest challenge is that there is simply no “one size fits all” answer to people’s questions. For example, someone in the audience asked about how one should position an early stage startup for revenue or growth. Should he go for an immediate focus on making money, or drive for scale and market share? My advice to this young man was to first decide if he’s a “missionary or a mercenary.” Missionaries are in it to change the world, while mercenaries want to make money. I divulged with great zeal that I myself was a mercenary and in it to make a few bucks. Glenn Kelman countered with an equally valid point that if you’re ONLY interested in making money, then you might be more prone to a site that adds no real user value, cluttered with ads. Obviously a balance is to be achieved, and the young man who asked the question will need to filter.

Also related to the “no one size fits all” problem is that each of the entrepreneurs on the panel have hugely divergent experiences. Urbanspoon has had great success with their iPhone app as a driver of traffic, due in significant part to their awesome placement in the iPhone TV commercials. The iPhone is central to their growth and revenue funnel. At Picnik, the question of whether and when we should do an iPhone app comes up often, but as a rich Internet application (vs. a service), Picnik has a greater set of barriers to surmount before the iPhone becomes viable (namely that iPhone doesn’t yet support Flash and the myriad of photo effects required for a photo editing app). So again, the budding entrepeneur must filter for whose answer is more fitting to her startup idea.

Another common challenge for presenters is trying to figure out when another panelist is polarizing for the sake of provocation, vs. a substantive belief in their position. Of particular note was a discussion thread initially started months ago between Glenn Kelman and Mike Arrington around whether Seattle is just as good a place to do startups as the Valley. This question is a great example of where 7 or 8 smart folks can simply argue for days with no conclusive answer! Of course both places are great.

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Panelist Mike Arrington of TechCrunch squares off with Fred Wilson of Union Square Partners on which region produces better startups: Silicon Valley or Seattle?

Panelist Mike Arrington of TechCrunch squares off with Fred Wilson of Union Square Partners on which region produces better startups: Silicon Valley or Seattle?

I tried to end cap the discussion with a humorous and anecdotal observation about the typical Google vs. Microsoft employee. With the Google employee in Mountain View, there is a constant expectation/certainty that she will move on to do a startup. Management expects you to leave and in fact routinely discusses the role of Google in preparing their young to someday “leave the nest.” Contrast that with Microsoft where typically, the employee who is considering doing a startup will talk about leaving, and talk some more, with the default set to staying on the mothership. Both cultures are highly smart, but default behaviors are set differently.

There were many similarly interesting questions from the audience. A huge thanks to Glenn Kelman for the generous invite to the event as I thoroughly enjoyed the interaction with both the crowd and panelists.

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