Can Amazon Make Startupping A Science?

Can Amazon Make Startupping A Science?

Written by Liz Gannes
Thursday, September 13, 2007 at 8:58 AM PT

Amazon (AMZN) is trying to turn the art of internet startups into a
science. At an open event at Stanford yesterday, a couple hundred or so
entrepreneurs, VCs, and developers talked about how Amazon Web Services
— cheap and elastic storage, computing, message queuing, and payments — could change, or is already changing, their businesses.

“We’re now at a point that business plans really don’t matter,” said
VC Randy Komisar of Kleiner Perkins Caufield & Byers. “It’s an
iterative process of quickly getting your ideas into the hands of
others.”

Komisar, who is writing a book on the topic, admitted that cheap and
testable company building makes his job a lot harder, and in some cases
irrelevant. “Before — there was a black art,” he said. “We don’t need
gurus, we have a market.”

Amazon Web Services — which kicked off with the release of Amazon S3
(Simple Storage Service) last March — now hosts over 265,000
developers, more than 5 billion objects, and up to 25,000 requests per
second, according to Andy Jassy, Amazon’s senior vice president of AWS.

Amazon representatives — including a surprise appearance by CEO Jeff
Bezos and Amazon backer John Doerr of KPCB — expressed awe at how much
traction the services have gotten in such a short time.

Case studies from AWS users — which include disparate startups like
virtual world Second Life, live-video service Mogulus, and peer-to-peer
expense tracking site Buxfer — drove the potential for the
“pseudo-scientific method,” as Komisar called it, home.

“This next wave is not about making it cheaper, it’s about making it
so you only pay when you have success,” said Jon Boutelle, CTO of
startup SlideShare, an AWS customer since inception. He suggested AWS should use the unlikely motto “failure is an option.”

Joyce Park, CTO of Renkoo,
discussed how her social events company was able to play around with
building an app for the new Facebook platform without draining too many
company resources. The app, Boozemail, turned out to be wildly
successful, with some 69 million virtual drinks exchanged by Facebook
members since June 29. Because of AWS, Boozemail never had a chance to
take down Renkoo’s servers and its main service.

But the money part is important too. SmugMug CEO Don MacAskill reiterated
he’s saved $692,000 using AWS for his photo-sharing startup. He said
that figure was as of April of this year and would be higher if he
recalculated.

The startups seemed to be willing to hand over to Amazon just about
every aspect of their backends, telling Amazon at the event they’d pay
for additional services, such as a content delivery network. Various
Amazon execs, including Bezos, dropped hints about things like
Amazon-Oracle integration and the introduction of a service-level
agreement (SLA) — which would make Amazon guarantee its services
formally and let its customers breathe easier.

Prior to the event, Amazon had announced it would be holding a promotional startup contest
over the next month, with the grand prize $50,000 in cash and $50,000
in AWS credits. Four second-prize winners will receive $5,000 in AWS
credits.

The contest didn’t seem to be generating much excitement among
attendees, with the prize money and the chance of winning perceived as
too small. However, Bezos did mention that his personal investment
manager might look at the participants, and Doerr heartily encouraged
startups to contact KPCB. So maybe the old ways will stick around for a
while longer.

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