Welcome back to Baby Breakerdom! This week's quest to uncover budding Rule Breakers finds venture capitalists buzzing about buzz and more green in green.
First up today is BuzzLogic; as former PR guy, it's a journey into the past for me. BuzzLogic uses technology to find the most influential posters in the blogosphere and in social networks such as MySpace.
It's a compelling concept. PR has been such an esoteric business, for so long, that measuring what, exactly, equals PR success has been a subject of debate for decades. BuzzLogic could change that situation by tagging posts and tracking reactions.
Plus, the business reminds me of columnist Malcom Gladwell, author of The Tipping Point. That book's genius stems from how it clarifies influence and the creation of buzz. BuzzLogic doesn't appear to take anything specific from Gladwell's work, but by zeroing in on what creates influence in the digital realm, the company could help PR firms find the tipping point for their own clients.
If there's a dark side to this technology, it's the Orwellian nature of tracking those who don't really want to be tracked. Could BuzzLogic create a backlash? Maybe. Or maybe the firm can exploit the egotism of blogging. After all, who doesn't want to be an influencer? Isn't that why we put up with Donald Trump and his artificial hair?
Venture capitalists are betting on ego. On Tuesday, BuzzLogic announced $9.6 million in first-round funding from Adams Capital Management, Ackerley Partners, and Transcosmos Investments & Business Development.
I agree that there's a compelling story here. A recent digital throwdown between a blogger dubbed Spocko and a San Francisco radio station owned by Disney (NYSE: DIS ) , which ultimately led to some advertisers pulling their business, illustrates that influence comes in many forms on the Web.
Understanding and harnessing that influence in a measurable way, as BuzzLogic proposes, is likely to be an ongoing need for monolithic marketing conglomerates such as Interpublic (NYSE: IPG ) and Omnicom (NYSE: OMC ) . Add this one to the IPO watch list.
Next up is green technology, which the Rule Breakers team has been following in earnest. David Gardner's growth portfolio is seeking 10-bagger returns in coal recycling via Headwaters (NYSE: HW ) , and in solar energy through Suntech Power (NYSE: STP ) .
Now, if research is to be believed, a new crop of candidates could be on the way. Cleantech Venture Network says that VC investment in green power reached $2.9 billion in 2006, up 78% from the year prior and an all-time high.
I've spoken about the dangers of a private-equity bubble, so you'd think that a rush to clean technology would have me worried about junk energy stocks flooding the IPO market. Well, I'm not. Renewable-energy technology is still in its earliest stages, and like biotech, it needs investment dollars to fund mass-market breakthroughs.
If anything, the funding reassures me. Sure, some awful businesses will foist themselves upon the public. But I'm also certain that we're on the verge of finding the renewable-energy equivalent of Vertex Pharmaceuticals (Nasdaq: VRTX ) , which has been a multibagger for Rule Breakers subscribers.
How can you, the Foolish investor, tell the difference between the Fakers and the Breakers? Look for first movers that have achieved a patented edge, run by managers who have experience in renewable technology, and who, through their stock holdings, are deeply committed to success. Those are the firms best poised to deliver the outsized returns growth investors crave.
That's all for now. See you back here next week, when we continue our quest to find the greatest growth.
For more Rule Breaking Foolishness:
- Check in with our last litter of infants.
- Growth is dead! Long live growth!
- Get the latest list of top growth stocks.
High-tech. Biotech. Nanotech. Any tech. David Gardner and his Foolish band of analysts cover it all for Motley Fool Rule Breakers, and they've unearthed six multibagger stocks in two years as a result. Want to find out who they are? Try the service free for 30 days.
Fool contributor Tim Beyers, ranked 1,216 out of more than 20,300 participants in Motley Fool CAPS, owns shares of Interpublic. Get the skinny on all the stocks he owns by checking Tim's Fool profile. Headwaters, Suntech, and Vertex are Rule Breakers picks. Disney is a Stock Advisor recommendation. The Motley Fool's disclosure policy is a rebel on Wall Street.