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Why SXSW doesn't need another Twitter moment

The tech industry will descend on Austin, Texas, starting March 13 for the annual music, film and interactive festival known as South by Southwest. Here's why its organizers now call Twitter -- a standout success at the event eight years ago -- an "albatross."

Tech's elite come to Austin, Texas, every year for the confab. Blake Robinson

If you're expecting the next big thing to come out of Texas during the South by Southwest festival this year, you might be disappointed.

Back in 2007, Twitter used the conference in Austin to catapult itself into the limelight. Attendees at the festival used the social-networking service to find out where their friends were having lunch, or what parties were most worthwhile. In 2009, they checked in to Austin haunts using Foursquare's location-based sharing tool.

But six years is a long time in tech, and since Twitter and Foursquare made their debuts, there hasn't been a formidable tech company to surface from the show, which brings together the technorati, filmmakers and musicians.

The festival's organizers are trying to get away from the perception that a company lives or dies based on its popularity during the show, which starts Friday and is known by its nickname SXSW .

"South by Southwest is about hitting a single or double, and then finding another way to advance your career," Hugh Forrest, director of South by Southwest Interactive -- the tech-centric portion of the festival -- said last week. "If you have success there, you have to build on it."

It's become a Silicon Valley tradition to pick a darling company or app from SXSW Interactive and hail it as the winner of the week. The gathering, which began in 1994 as an offshoot of the music festival, has become a massive stage for tech companies vying to make a name for themselves -- for better or worse. When the technology industry descends on Austin, many will be either looking for the next big thing, or find themselves disillusioned with Silicon Valley's version of a dog and pony show.

It's hard to say which it will be.

As conference success stories go, Twitter is a fairy tale. But Foursquare and short-term vacation rental company Airbnb have also benefited from SXSW hype. There have also been some flameouts, like location-based app Highlight, which offers you information about the people around you. It was the star of the 2012 show but fizzled soon after conference-goers left Texas.

For SXSW , Twitter's success has been a blessing and a curse. The social network's explosive growth since 2007 -- today it's a $30 billion public company -- established South by Southwest as a launching pad for apps to blast into the mainstream. But it also created lofty, if unrealistic, expectations for the conference.

"South by Southwest wouldn't be where we are now if Twitter hadn't happened in 2007. They are a huge, huge, huge part of our success," said Forrest. "But Twitter has also become a bit of an albatross."

While Twitter was a success at the show, it could easily have faded away after the conference ended. It wasn't until a year or two later that people realized what the juggernaut social platform could be. In the case of Highlight, the app still hasn't re-emerged. (Facebook, though, ended up buying Glancee, a Highlight competitor, in 2012, and turned it into a mobile feature called Nearby Friends.)

Silicon Valley venture capitalists are still paying attention to outliers at the conference, but they aren't banking on an initial burst of popularity. "Winning the weekend doesn't do anything in the long run," said Josh Elman, a partner at the venture firm Greylock Partners. "But people do try out new things more actively. It's a powerful place to start."

Greylock has invested in Facebook, Airbnb, cloud-based storage provider Dropbox and Tumblr, a social blogging network.

What will be big at this year's conference? Forrest thinks some of the standouts will be in hardware, with 3D printing and virtual reality headsets at the top of his list.

Still, with more than 30,000 people expected to attend SXSW and roam downtown Austin, there's always a chance a smartphone app will make its mark. Elman demurred, saying it's impossible to predict this kind of thing (though most VCs will tell you that's exactly what they try to do when they make an investment). But he said one app that could stand out is Meerkat, which lets you tweet out a live video stream from your smartphone. The free app has already generated buzz with the tech press. At SXSW, the app could help you decide whether to attend a party, by seeing a live feed of the action.

But we'll have to wait and see.

CNET's Richard Nieva (@richardjnieva) and Dara Kerr (@darakerr) will be in Austin covering all things tech, geek culture and maybe even barbecue. Check in next week for news from SXSW .