Are Today's App Companies Amusing Us to Death or Building the Future?

Cutting through the hype of Internet Week to find out: Is there a real idea here?



The national conversation of late has revolved around a trio of Washington scandals, a weather disaster, and the seesaw views in financial markets about whether crisis looms. Yet for all their prominence, none are as tied to trends that will shape our collective future as the myriad of events that took place this week in New York City under the banner of "Internet Week."

Now in its sixth year, Internet Week is a loosely coordinated series of gatherings ranging from daylong symposiums to open houses of tech companies large and small to the Webby Awards, which is the online version of the Oscars. Topics cover the gamut from healthcare in the digital age to marketing your startup to crowd funding. The attendees are young and at times terminally hip. The whole thing is, quite frankly, fun.

The events are filled with strivers and startups. Some may be bought in a few short years, at massive multiples, as Tumblr just was by Yahoo; some may soar higher and become the next Yahoo or Facebook; many will fail. But the collective outcome points resoundingly toward creativity, innovation and continually morphing modes of commerce and connectivity. Half of it may be frivolous, but what matters more is that half of it is serious about changing the world.

The 133 companies that open their doors to visitors during the week - known as OpenCo - make the point. OpenCo describes itself "as a mix between a business conference and artist's open studio with the vibe of a music festival." The idea was hatched in part by John Battelle, who helped launch Wired and The Industry Standard in the 1990s and Federated Media in the 2000s. The companies that participated in New York's first OpenCo ranged from hot companies like eyeglass purveyor WarbyParker and high-end retailer Gilt to powerhouses such as TED and Ideo to nonprofits like tech-in-schools Some names might be familiar, but most, given the bias towards startups, are not. They are the germoplasm of New York's social media and tech ecosystem of Silicon Alley, a rough geography stretching amorphously from Chelsea to Tribeca.

Many have only minimal revenue; listening to various chief executives of these admittedly green ventures, revenue does not even come high on the list of priorities. In fact, for ventures that are so unequivocally commercial, given how many of them connect users to products and companies to customers, revenue and profit take a backseat to vision and community. Some of this is a familiar tech-industry conceit: We're not here to make money, we're here to make the world a better place -- though if someone wants to value us at $1 billion, all the better.

Part of the reluctance to focus on revenue is pragmatic. These companies didn't exist a decade ago. Much of the current focus is on mobile applications, for smart-phones and tablets, which couldn't have been used the way these companies imagine until about five years ago. The tech world is strewn with companies that only later found ways to "monetize" their user base. Google, Yahoo and Facebook all began as quirky ideas, created by twenty-somethings with a vision for connecting people. Then they found a way to generate massive income.

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Zachary Karabell is Head of Global Strategy at Envestnet, a financial services firm, and author of The Leading Indicators: A Short History of the Numbers that Rule Our World. More

At River Twice Research, Karabell analyzes economic and political trends. He is also a senior advisor for Business for Social Responsibility. Previously, he was executive vice president, head of marketing and chief economist at Fred Alger Management, a New York-based investment firm, and president of Fred Alger and Company, as well as portfolio manager of the China-U.S. Growth Fund, which won a five-star designation from Morningstar. He was also executive vice president of Alger's Spectra Funds, which launched the $30 million Spectra Green Fund based on the idea that profit and sustainability are linked. Educated at Columbia, Oxford, and Harvard, where he received his Ph.D., he is the author of several books, including Superfusion: How China and America Became One Economy and Why the World's Prosperity Depends on It (2009), The Last Campaign: How Harry Truman Won the 1948 Election, which won the Chicago Tribune Heartland Award, and Peace Be Upon You: The Story of Muslim, Christian, and Jewish Coexistence (2007), which examined the forgotten legacy of peace among the three faiths. In 2003, the World Economic Forum designated Karabell a "Global Leader for Tomorrow." He sits on the board of the World Policy Institute and the New America Foundation and is a member of the Council on Foreign Relations. He is a regular commentator on national news programs, such as CNBC and CNN, and has written for The Wall Street Journal, Newsweek, Time, The Washington Post, The New Republic, The Los Angeles Times, The New York Times, and Foreign Affairs.

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