On Wednesday afternoon, Betabeat arrived at the arty brick headquarters where AOL’s startup alter egos, QLabs and AOL Ventures, take up an entire floor at Broadway and Great Jones in Soho. We were greeted by QLabs founder and hacker Chris Danzig, QLabs hacker Eric Skiff, and hacker-biz developer Michael E. Gruen. Everyone’s title is “hacker,” we were told. “We’re extremely flat,” Mr. Danzig said.
The hackers were having trouble controlling the temperature on what was a very humid day. The QLabs space is like the underbelly of the Titanic, with myriad chambers divided by arches and doors. “We have the AC, the heat on, and the windows open,” Mr. Danzig apologized, as we settled into a small conference room around a table made of reclaimed wood.
QLabs is an experimental think tank for the rapid prototyping of ideas on the web, one or more of which will hopefully become the next big AOL property. There are only seven hackers on the QLabs team, with about three more in support staff—but the corporation rented the entire floor with the foresight that it may one day be filled with thriving companies spun out of QLabs projects.
It’s a page from The Innovator’s Dilemma: AOL, once a disruptive force on the Internet, is in grave danger of being supplanted by younger, lither companies. In order to remain relevant, the giant dialup-content-media conglomerate has hired a group of technohipsters and given them free rein to make whatever they want. (The other arm of this effort, AOL Ventures, scouts for and invests in innovative companies outside AOL’s doors.) The QLabs hackers report quarterly back to the mothership, Mr. Danzig said, but even though QLabs has yet to produce a hit, it’s had 14 months without executive interference.
The unofficial expectation is that QLabs will come out with a hit within two years, he said. (Unspoken: Yikes. Ten months to go.) QLabs has built seven products and already scrapped three. The effort is part incubator, part agency, and part startup. First, the team collectively decides on an idea—”kind of by Socratic method”—based on whether the hackers think it will hit, how long it will take to build, and whether there is a chance for monetization down the road. They do some market research, then slam on a prototype for six to eight weeks. When they have a minimum viable product, they set it live and cross their fingers. If the product fails to take off, QLabs shuts it down. By then, the hackers have already moved on.
The three month mark comes from an informal survey of companies that Mr. Danzig and AOL Ventures’s Mike Brown had worked with, as well as public data about recent startups. They found that if users aren’t reacting in three months, the idea is probably a bust. “It’s very possible it could be a successful business with a few tweaks,” Mr. Danzig said. “But I’d much rather throw away something that has potential than burn away time on something that’s not working.”
If a project were to take off, QLabs would spin it out into an independent startup, hire employees, and get funding, which might be as simple as a dedicated budget from AOL, which owns everything QLabs builds.
The Lab has had some traction on various projects. Brom.ly, an events recommendation service that wasn’t very popular with consumers but turned out to be a useful data service, now powering event recommendations for the Huffington Post (see that synergy?). Framey, a tool that lets readers or users leave a video comment from a website, was used for public awareness campaigns by the Sierra Club and Housing Works. For better or worse, the Huffington Post is also interested in its potential to enable readers to leave video comments.
Slain projects include NumSay, a system that lets people leave anonymous comments or reviews for a person, a la Rate My Ex, or business, a la Yelp. The reviews are anonymous and tied to the subject’s phone number, so you can type in the digits you just got at the bar and find out if that beautiful stranger is a secret sociopath. NumWay was put in cold storage because it was too evil, the hackers said. “The anonymous side of it is just too dangerous,” Mr. Skiff said. The team has also produced Bread Alert, an email that recommends what to eat for lunch; Mixnomer, a site that helps come up with startup names; and BLEEOO.com, Mr. Skiff’s one-off side project that lets users upload videos of themselves imitating the sound of a dial-up modem via Framey. “Oh, I haven’t seen the cat one. Do you guys mind if we take a little detour?” Mr. Danzig asked, interrupting the demo for a video of a guy holding his cat up to the camera while making vigorous bleeping noises.
Okay, that’s adorable, we said. But how is AOL letting you guys get away with making memes? “I think we’ll see more significant traction in the next few cycles,” Mr. Danzig said. QLabs is getting better at the speed startup game, he said. For one thing, they’ve decided to spend more resources promoting each project, instead of putting things out into the wild and hoping they get noticed.
QLabs has high hopes for two projects right now: Huntsy, an organizational tool for job seekers, and When, a social network for families that launches next week. “I’d put our product team against any product team in New York,” Mr. Danzig said. “We can build things very well and we can build things very fast.”
As for the lab’s notorious press-shyness to date, Mr. Danzig said he just didn’t want to promote QLabs until it had something to show. “I didn’t want to pull a Color and go screaming from the mountaintops,” he said, referring to the overhyped Sequoia Capital investment that raised $40 million before flopping its way into irrelevance.