South by Southwest Interactive 2010 was a place for new ideas, new connections and a whole lot of packed parties. Attendees may be overcoming their SXSW hangover that comes after days of networking, attending 9:30am panels and taking advantage of the multiple nightly happy hours. After the fog cleared and the ideas slowed enough to focus on a few I realized there were a few key takeaways for conference attendees.

Focus on Community
Every panel and convention hall conversation was incomplete without mentioning the community. The current market favors service companies that bring people together. YouTube, Facebook and Twitter are useless without the thousands of users who use and promote their service. The future of web business is providing a platform to bring users together to share content. These platforms are setup so that the sum is greater than the parts. However, the big watch out for collective social media businesses is customer service.

As Gary Vaynerchuk advised, anyone in business is by default “in the customer service business.” The core of the social web is people; if you don’t serve these customers then you’re out of business. Bad care is further amplified by broadcast through channels like Twitter where a customer complaint can go viral. Potentially poisoning your company’s brand and reputation overnight.

I was struck, immediately upon entering the Austin Conference Center for SXSWi, that I was way behind the curve when it comes to technology. See, I’ve always considered myself somewhat tech-savvy. Although I was continually knocking passers-by about with my bulky Swiss Army laptop backpack on sudden (apparently unnervingly aggressive) pedestrian turns when a perpendicularly flashy icon would attract my flighty attention-span, I still figured I was switched on enough to intellectually navigate the figurative intricacies of the tech mob.

I’ve replaced video cards and power supplies on my desktops. I’ve upgraded motherboards. I’ve figured out driver problems all on my lonesome with no training or previous experience. Operating system reinstallations are a breeze. The brief flash of pride I undergo when I accomplish such lofty digital heights spur me on to explore new dimensions of physical intimacy within the mysteries of technology.

SXSWi taught me I actually knew nothing. It was simultaneously depressing and swarming with elation; the level of technology on display both shamed and inspired me.

Bruce Sterling, the closing keynote speaker of the SXSWi 2010 Conference, is a very interesting man. A renown Hugo Award-winning science-fiction author, leader in the “cyberpunk” literary revolution, speaker, futurist and design instructor, he was born in Austin, Texas, but currently lives in Turin, Italy.

His first novel, Involution Ocean, was published in 1977 when he was but a pup of 23. Since then he has published over a dozen fiction and non-fiction books, been the instigator of three influential projects; The Dead Media Project, The Viridian Design Movement, and Embrace the Decay. He was appointed Professor at the European Graduate School in 2003, and “visionary in residence” at the Art Center College of Design in Pasadena, California in 2005.

After briefly describing his life in Italy, he explained his belief that the current tech generation’s children are possibly the best behaved in the history of the generational concept (primarily thanks to the prevalence of social media):

“Depression, two land wars, zero in the way of predictable future and they’re still confident, and cheerful, and kindly. By the standards of the 20th century we shouldn‘t be surprised if they were setting fire to the core of every city on the planet.”

He described his love of Brazil. Brazil has a disproportionately large internet footprint when one considers their low average tech level.

Tuesday’s Microsoft BizSpark Accelerator Finals sponsored by Elance brought together a very talented and differentiated group of businesses. After thirty-two finalists went through the two minute-pitch round on Monday only twelve moved onto the finals. The presentation format jumped to five-minutes per presentation with ten minutes of question and answer. The categories and semi-finalists were:

Innovative Web Technologies: Skimble, RecycleMatch and Siri
Entertainment Technology: PocketTales, BandCentral and ShopSavvy
Business Social Media: MobileRoadie, SpredFast and GuruStorm
Personal Social Media: Bump Technologies, FoodSpotting, NutshellMail

The judges in the finals took the liberty to dig deeper into issues like scalability, competition and revenue. I had the opportunity to talk to one of the guest judges after the panel. When asked, “what makes a successful business pitch?” Famed author, social media guru and marketing expert Guy Kawasaki said, “Businesses need to address revenues.” Online social companies need to have one of two things, “either boatloads of users or a strong revenue model.”

Another word to potential pitch-contestants next year, if you have a really cool demo of your product, show it in at the beginning. Siri, the interactive personal assistant company made a 2-minute pitch before showing a real example of what their application provides. After the “oohs” and “aahhhs” of the crowd quieted down, a panelist asked the obvious question “why didn’t you start with that?” If you’re going to pitch a room full of tech-savvy entrepreneurs, demo eye-candy never hurts.

Anyone remember the dot.com crash? When the speculative bubble of the late nineties (inflated largely due to the advent of the internet) popped with a cataclysmic bang that shook the financial world like a terrier does a rat? In the days after March 10, 2000, when the “oh no” factor became biblical, economists scrambled to figure how just what the heck went wrong.

Confidence in technology was high. So high, that investors would hurl money at any startup business prefixed with an “e” or suffixed by a “.com”, gambling that the rate of exponential technological growth would buoy their invested premiums. Traditional business models and established concepts such as the P/E ratio (price-to-earnings ratio) were thrown out with the bathwater.

Like a rowdy classroom of teenagers been told to “settle down” by a stern schoolmaster, real businessmen advocating sound, practiced business models began to apply themselves to the realm of internet commerce. One of the chief words they would bandy is “monetization”, which describes the adaptation of assets that are not producing revenue into ones that do. This is particularly applicable to the current status of growth in apps for smartphones and websites looking to gain a foothold in today’s crowded marketplaces.

You’ll notice that many apps have a free version to be downloaded as a taster. The problem most developers battle is balancing the line between what features are free, and what aren’t. Too many resources and features offered for free negates the purpose of the paid upgrade. Too little, and the consumer doesn’t acquire enough information about the product to generate a confident purchase.