Internet World: The Start-Up Woodstock

If you missed last week’s Internet World in Los Angeles (like I did), shame on you. And if you think Penton Media Inc. was hosed when it bought the show from Alan Meckler 18 months ago (as I did), shame on you, too.

Rodney Joffe of Whitehat.com, who did exhibit there, called from the show floor Friday and described it as huge for start-up companies.

Penton made it easier for exhibitors to know whom they were talking to this year by putting titles on badges. That information would come through once you collected business cards, but now the knowledge was plain to the casual observer.

“In the past, we saw information technology managers and computer experts running networks and other systems,” Joffe says. “This year there seems to be an enormous number of CEOs and Presidents with traditional mainline companies walking through with bags.”

The CEO bagmen were also using my favorite strategy. They were swarming among the start-ups rather than schmoozing in the main hall. Owners of main hall booths were complaining about lack of traffic, yet “in these outlying areas you can’t find space to walk.”

Needless to say, start-ups were thrilled, and were all planning on coming back. This has created a real problem for Penton, a problem as old as the Christmas story. There’s no room at the inn.

“You get priorities for next year based on the size of the booth you buy this year,” Joffe explains. “We had number 490, and there were 900 priority numbers. By the time we went there, the main halls were booked.”

“Companies have so much money they buy the biggest booth they can get. Where you used to have eight 10×10 booths, it’s now one 20×40. Halfway through yesterday, only one-fourth of the space was left. So some people who exhibited this year won’t get in next year. Start-ups will never get in next year.”

This was a problem that also bedeviled Comdex in its glory days. If people are coming to see companies that can’t get into the show, will they keep coming?

The usual answer is to get a bigger hall. (Comdex founder Sheldon Adelson finally built the Sands Expo and Convention Center to handle the overflow.) But the Los Angeles Convention Center’s 680,000 square feet are now filled like a sardine tin, with at least one parking deck already functioning as an extra exhibit hall, Joffe says.

Joffe also got a little bit of personal vindication at the show. It seems that among the eight start-ups he’s launched in his career was an outfit called Genuity, sold to GTE in 1998.

Joffe says the first thing GTE did upon buying the company was wipe out the name. But they concluded “the telco mentality was infiltrating the call centers,” and people were getting angry.

So at this show GTE announced the whole web hosting business was being spun-off, with a new name Genuity.

The change didn’t make Joffe any money, but it did get him a VIP ticket to GTE’s bash celebrating the event. That meant front-row seats to a concert by Carlos Santana at the Palladium, plus back-stage passes.

The executives who accompanied Joffe to see Mr. Santana also cut the musician a check for his favorite charity. It’s fun, Joffe says, to see a legend thrilled.

Yes, but what about the product trends? Joffe says he found two. First was a bunch of young go-getters, wearing the white shirts and slacks of Mormon missionaries, passing themselves off as venture capitalists with cards Joffe thinks were printed at the airport on the way in. The waters are deep, in other words, but they’re also shark-infested.

The other trend was video. “All the ISPs, or ASPs, are trying to develop methods for distributing video,” he says. “They think the big trends are coming from cable companies.”

So there you have it. Start-ups are getting the traffic, there’s no room at the inn, big names are being made happy-happy, people are serious about making the Internet video-friendly, and (of course) there are sharks everywhere.

Sorry I missed it.