DEMOfall: The good, bad, ugly

A look back at the good, the bad and the ugly from the premier launchpad event

I’m just back from DEMOfall, the semi-annual conference that gives startup companies a chance to unveil new technology before an audience of venture capitalists and executives from the venture arm of some of the biggest high tech firms in the world. There are always lots of good and innovative new technologies to write about, but this year, two demonstrations blew me away.

One was not just good but flat out great. The other was one of those examples where you see what can happen when technology goes bad, (or, depending on your perspective, over to the dark side). The ugly part is that there were far too many companies that reminded me of those scary days leading up to the bursting of the high tech bubble.

First the good. No, great.

In a panel discussion entitled, The future through the eyes of young innovators, Michael Callahan, a twenty something innovator and founder of Ambient and a recent grad from the University of Illinois at Champaign-Urbana, demonstrated a communications technology that captures neurological information from the brain and translates it into speech using a device called Audeo.

The demonstration was truly amazing. Callahan stood before the audience and while keeping completely silent — his lips never moved — the computer said, “as you may notice, I am not visibly speaking.” These words may someday become as memorable as Alexander Graham Bell’s famous first words on his telephone, “Mr. Watson, come here. I want to see you.”

Callahan’s words were not prerecorded. They were the words he wanted to say but those words never passed through his lips.

The technology captures the process taking place in the brain as it sets up the vocal aperture (voice box) before the air from the lungs come up.

“It is not necessarily straight thought. It is a step above thinking but a step below speaking,” said Callahan.

The audio technology, consisting of both hardware and software, captures that control signal from the brain and “does a bunch of sophisticated signal processing and turns that into speech,” Callahan explained.

On the hardware side, Callahan said that the vocal signal from the brain to the voice box that the device needs to pick up is “about this big” (he placed two fingers about an inch apart).

Meanwhile, the noise from the body such as the heart beat, “is about this big,” Callahan demonstrated again, holding his hands a few feet apart.

Comparing it to a needle in the haystack, Callahan explained that on the software side of things, what is needed is signal recognition from a number of different angles.

First applications will be for people with disabilities who are unable to talk.

However, as Ambient Corp., Callahan also will be looking for more mainstream markets. Two he mentioned are gaming and mobile communications.

All in all, it was a sight to behold. Watch the video.

Unfortunately, now I must go on to the bad.

The technology here is also amazing but I just hate the way it will be used. It comes from a startup called Pudding Media.

What Pudding’s technology can do is monitor VoIP calls, IM chats and the like, listen in on the conversation and, by picking up key words, place advertisements in real time on screen as you communicate.

The technology is, predictably, opt in. So, if you are willing to expose part of your life, you get something for free — in this case, the service being offered by a mobile carrier, a VoIP provider, or even a Web publisher, according to the company press release.

Say, for instance, you’re talking about going to the movies with a friend. The technology will start displaying movies playing in the area on your screen.

Yes, it is pretty darn amazing but my bet is the first VC to invest in this technology will be a firm that calls itself In-Q-Tel, none other than the investment arm of the CIA.

Have fun.

And now we get to what was ugly about DEMO. Specifically, it was the echo of the old days when companies insisted that profits were unimportant and market share was everything, and so offered whatever service or product they had for free.

There were way too many companies jumping on the collaboration and social networking bandwagon, all of them promising users a free version of their service.

For investors, most of the presenters promised that users would be willing to pay for added services once they were hooked on the (typically) Web 2.0 collaboration, a la FaceBook or MySpace service.

I wrote a blog post on this and named a few names.