Profile Of Betaworks

Jenna Wortham, In New York, a Tech Incubator Becomes a Hub of Collaboration

The company was founded by John Borthwick and Andrew Weissman, who worked at AOL in the ’90s.

“I was there when AOL bought CompuServe and Netscape and did the first content deal with Amazon,” said Mr. Weissman, chief operating officer. “You could start to see these new ways pieces of the Internet were coming together.”

He said he watched as one AOL project, MapQuest, gradually lost market share. Google Maps grew faster because it allowed other companies to add information to a map or use the service in other tools. “You could just see that model was going to be big,” “We said, ‘We think this is it, and we want to invest in these kinds of companies.’ ”

A little over three years ago, the two decided they wanted to create their own company aimed at that very idea. Thanks to tools like Amazon Web Services, Twitter and Google Apps, developers could more easily build and scale Web tools.

“We knew there was a big fundamental change happening on the Internet,” said Mr. Borthwick, Betaworks’ chief executive. “And we knew it was going to be social.”

They spent nine months deliberating over how to structure their company before settling on a hybrid of an investment firm and an incubator.

“The venture capital structure is banking on finding that one super-duper winner, and there’s nothing wrong with that,” said Mr. Borthwick. “But our goal is to create a network of companies with lots of connections between them that increases the likelihood of success between all of them.”

It’s not hard to see that spirit at work. The two dozen companies under Betaworks’ umbrella make a point of using one another’s creations and often incorporate them into their own services. At a recent meeting at Betaworks, about three dozen employees of Betaworks and its portfolio of companies crowded into a room, trading feedback, updates and the occasional good-natured zinger about their various products.

Betaworks has developed some Web tools from scratch, like Bit.ly, a URL shortener, and Chartbeat, a real-time Web analytics service. But the company is looking for entrepreneurs who have more than a vision.

“Anyone who shows up with an idea on a napkin, we’re going to tell them, ‘Thanks, but go build a prototype,’ ” Mr. Weissman said.

I find Betaworks to be impressively unorthodox, and more experimental in its outlook that conventional VCs, even the very smart VCs.

I hope that I will be able to twist John’s arm to join me in the fall as a guest of the planned Stowe Boyd Show, once I screw down details (and line up some sponsors).

[disclosure: I am an advisor to Bit.ly, and have a stake in it’s financial success.]