5 Cool Start-Ups to Keep an Eye On

Every company starts small. Facebook began as a Harvard networking site, Starbucks as a small Seattle coffee shop and Microsoft was famously started in a garage by a college dropout.

It's easy to explain in retrospect what made these companies succeed. But looking in real time at a cluttered landscape of fiercely competing small businesses, it's difficult to pinpoint potential winners. ABCNews.com asked savvy venture capitalists for their predictions for the big companies of the future. Here are five of their top choices.


VIDEO: Tory Johnson talks to the companys founder about the sites contest.

What It Is: "Zoom does for retail what ATMs did for banking," says Gower Smith, founder and CEO of ZoomSystems. The company's Zoom Shops are automated shopping kiosks that sell customers everything from iPods at airports to acne cream at Macy's. The San Francisco based company is planning to expand into apparel next.

Why We Need It: Zoom Shops combine the efficiency and information wealth of online shopping with the instant gratification of regular shopping. It allows companies to set up shops in confined areas – airports, casinos, college campuses -- where they might not otherwise have access.

Bare Facts: The first Zoom Shop launched in 2005, and the company, with 125 employees, now has 1,000 kiosks scattered around the world. Macy's has outsourced its entire electronics department to Zoom Shops.


What It Is: A website where consumers can buy discount coupons for services in their neighborhood. For $39, for example, you can buy a month-long membership to your local gym that would ordinarily cost $135.

Why We Need It: People like to save money. "Groupon is a very simple but very valuable service," says Roger Lee, general partner at Battery Ventures, which funded the Chicago-based start-up. He points out that Americans spend 80 percent of their income within 10 miles of their home, and they are apt to jump on an opportunity that gives them a targeted chance to save.

Bare Facts: Groupon was founded in 2008 and now has 300 employees and thousands of members in the U.S., Canada and Europe.


What It Is: "Wowd is the only company that has the potential to upset Google's business model," says Steve Jurvetson, venture capitalist at Draper Fisher Jurvetson and one of the original investors in Hotmail. Wowd is a search engine that doesn't rely on servers or crawlers and instead generates results by indexing the websites that users actually visit.

Why We Need It: If it works, Wowd could be a better way to search since it generates results based on what's popular, not based on what's been optimized best for detection by crawlers.

Bare Facts: Founded in 2007, Wowd has 30 employees around the world, and offices in Palo Alto, Portland Oregon and Belgrade. Almost 200,000 clients have installed its software, allowing their website visits to be tracked by the search engine.

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