Can Amazon Make Startupping A Science?

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.

There’s another version of the AWS in San Francisco this afternoon; you might still be able to get in.

Additional Stories on Amazon Web Services from our archives:

1. Bezos’ Dilemma

2. Amazon.com, harbinger of Web 2.0 trends.

3. Making Facebook Platform applications scale on the cheap

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