Why SXSW’s party in Austin matters

The Internet, like soylent green, is made of people. And startups can never get enough.

That’s the insight I’ve gathered from years of attending South By Southwest Interactive, the annual conference/festival/five-day rave held every year in Austin in conjunction with the more established SXSW film and music festivals. (You can show your veteran status, or fake it, by calling it “South By.”) The streets of Texas’s capital city are swarming with San Franciscans; I knew a half-dozen people on my JetBlue flight.

So why do so many people pick up and hang out in Texas for a week? Because they have jobs to fill, and the people they need are all here.

I’ve called SXSW a “pointless party” and ridiculed it as “spring break for Web developers.” But there’s something to be said for getting out and meeting people in a new place, unmoored from your usual routines. Sure, there are panels, but it’s really about the hobnobbing in the Austin Convention Center’s long, long hallways and the parties that roll into the night. People are trying to connect on a deeper level around shared passions — here, mostly consumer Web startups and the possibilities that unfold when you connect social experiences with the Internet.

It’s not about the products that launch at SXSW. I have sympathy, even admiration for startups brave enough to run the SXSW gauntlet of skeptical, demanding geeks in the hopes of getting dubbed the next Twitter or Foursquare, to name two startups that won buzz here. But really, if you can find one great developer at a party, consider it a win.

Yesterday, right before I grabbed my bags and headed to the airport, I moderated a panel at the Unleashed Talent conference in San Francisco on the topic of recruiting. One of the panelists, Ethan Bloch, the founder of Flowtown, a startup that aims to turn your most passionate customers into a virtual sales force for your product, struck me as singularly obsessed with recruiting.

Bloch told the audience he spends 90 percent of his time recruiting, doing everything from writing scripts that monitor GitHub, a collaborative source-code repository favored by Ruby on Rails programmers, for the most productive users to scanning Dribbble, a design-sharing site, for creative user-experience types.

In a similar vein, Peter Kazanjy, the CEO of professional-reviews site Honestly.com, mentioned during the panel that he’d built SocialLink, a FireFox Web browser add-on that helps users find a LinkedIn connection on Facebook or Twitter. (Among other things, this helps you evade a charge LinkedIn imposes to send messages to users that aren’t in your professional network.)

Other panelists, like BranchOut founder Rick Marini and Top Prospect’s Rotem Perelmuter, emphasized the importance of constantly recruiting by mining social graphs, the mapped-out connections between people on social networks like Facebook. (Not surprisingly, their startups help you do just that: BranchOut is a professional network, not unlike LinkedIn, but one that lives within Facebook as an app, while Top Prospect helps companies extend the referral rewards usually given to employees for a successful new hire to their wider circle of friends and acquaintances.)

Jobvite CEO Dan Finnigan pointed out that this approach is singularly effective: Referrals that come through employees’ social networks are 12 times more likely to result in a hire than over-the-transom applications. And they’re cheaper, too — the cost of a referral hire might be in the range of $3,000 to $5,000, while a professional recruiter could easily start at $20,000 to $25,000 per completed hire. (At the panel, venture capitalist Jeremy Liew of Lightspeed Venture Partners sarcastically quizzed Bloch on his recruiting productivity, finally getting Bloch to admit that for all the time he’d spent since January scouring websites for “world-class” candidates, he’d only made one hire so far. But at those rates, I’d say Bloch’s doing okay.)

Against that backdrop, a conference pass, a plane ticket to Austin, and a few nights in a hotel seem cheap. So party on, South By geeks. If you can make just one whip-smart, talented new friend whom you bring back home to headquarters, you’ve paid your own way.

(Oh, and by the way, VentureBeat is hiring.)