Letter from Betaworks CEO: ‘Data is the New Plastic’

And more from the state of Betaworks, as per a leaked letter to shareholders.

Mr. Borthwick. (betaworks.com)

Our apologies to evangelists of gamification and QR codes, but 2012 is all about data—at least according to New York startup non-incubator Betaworks. “We know the importance of understanding big data,” Betaworks CEO John Borthwick wrote in a confidential letter leaked to PandoDaily on Saturday. “Data is the new plastic. The network is both the frame and the metaphor we are building towards and on. This network-centric model is core to betaworks, and a key competitive advantage.”

Three of Betaworks’ most successful companies—Bitly, Chartbeat and SocialFlow—capitalize on the ever-elusive ROI of social media, attempting to quantify the impact of the “social web” in which they believe so mightily.

Data does seem to be a rapidly developing theme in 2012, as Betabeat deftly pointed out in our 2012 Tech Predictions piece. Numberfire, a data science app for fantasy sports, raised $650k in seed funding earlier this month, while Visual Revenue scored $1.7M for technology that doesn’t just report web traffic data, but predicts it.

Mr. Borthwick’s letter also outlines four key learnings from 2011 that will motivate which ideas and companies betaworks decides to groom in 2012. Aspiring NYC tech entrepreneurs—this one’s for you:

– Proliferation of devices that are connected to networks is accelerating the rate of innovation: Companies focusing on the networks created by people on mobile devices will take center stage in 2012, as mobile adoption continues its rise.
– Connected devices are enabling real-time services and real-time networks: As mobile usage rates increase, methods of real-time group interaction become progressively important and valuable.
– Networks of people, participation and ideas matter more than networks of devices: The Social Graph takes precedence over the actual network infrastructure of the Internet.
– Great design has become increasingly vital as computing gets less expensive: The cheaper hardware construction becomes, the more time and resources you have to focus on the minutia of design.

Apparently trend prediction is Betaworks’ forte, as its focus on data and the real-time social web led the company to a slew of successful exits in 2011, yielding full investor returns while “still retaining capital on the balance sheet.” This is good news for New York startups looking for a place to help scale their ideas, and for the Silicon Alley scene in general, which apparently needs to prove to Valley-ites that “New York is really a tech ecosystem that is here to stay.”

Exactly how central big data will become to 2012 companies remains to be seen, but one thing’s for sure: the New York tech scene continues to blossom. “New York as a technology hub has taken on a life of its own,” wrote Mr. Borthwick. “It is no coincidence that [Betaworks] is based in one of the most vibrant and creative cities in the world.”

Betaworks Shareholder Letter Letter from Betaworks CEO: ‘Data is the New Plastic’