I keep thinking back on the launch of Bug Labs, which was about the best product launch I’ve seen in recent memory, at least from a startup you’ve never heard of. They ended up going on to win one of CNET’s best of show at the Consumer Electronics Show last year and have done very well since.

You might not have seen that launch, but that’s because they did something OTHER than launch at a big conference.

What did they do?

1. They got intimate. Had dinner with four people. (Seesmic, by the way, launched when the CEO brought a bottle of wine over my house and he forgot to tell me that it was off the record).
2. They told a story. “Why is gadget design so hard?”
3. They involved and listened. “What would you like to build if you had a widget that snapped together like a Lego kit?”
4. They shipped a product that was interesting and useful and reflected market feedback. (Many of the ideas we gave them are now shipping modules).

But contrast that with all the companies you’ll hear about over the next day or two thanks to the Demo conference.

Quick, can you name a single company from last year’s Demo? I can’t. Here’s the list. Are you using any? I looked through the list and can’t think of one except for Evri and Symantec, both companies that didn’t launch specifically at Demo.

So, what is the difference between a story and a launch?

Well, look at how Jeremy Toeman’s company, Stage Two Consulting, helped Bug Labs launch.

Did they throw a big press conference? No.

Did they send out a stupid press release? No. (Jeremy never sends out press releases that I can remember).

Did they pay $18,000 to the Demo conference to get on stage (every company you’ll hear about this week did that)? No.

Did they bug Mike Arrington until he’d write about their company in Techcrunch? No.

He invited a handful of people he liked, trusted, and knew would be interested in a new kind of gadget, and had dinner with us.

At the dinner did we see the product? No. The CEO, Peter Semmelhack, talked to us and showed us a few blocks of wood and told us a story. “What if you could build different electronics by snapping together pieces like legos?” I remember him asking.

I remember Dave Winer and Ryan Block being at that dinner. Then he asked the group of us “what would you like to do with such a widget?”

It was a product launch I hadn’t seen before or since.

What did that do?

1. It was intimate so we got to know Peter, the CEO, in such a way now that if I see him walking in SF I always stop and say hi. If he called me to tell me that a new version is coming out I’d take his call and his number is already programmed on my cell phone.
2. It let us know a story about how the product was developed. One that I am using years later here. Free PR. It all starts with stories.
3. It made us feel emotionally connected with the product in a way I don’t feel for many other products.

So why doesn’t that happen anymore? Well, look at the launch of Democrasoft which will happen tomorrow. The Demo folks told them not to talk with press until Sunday night and threatened that they would be kicked off the stage if word leaked. Luckily a friend was helping them with PR and got me in touch early enough so I could get a video done (I sat down with the CEO on Friday afternoon and I had to drive four hours to go and see them.

But do I have video of any of the other Demo companies? Nope. Do I care about any of the others? Will I try their products? Will you? Will you be watching at work tomorrow to pitch after pitch? I doubt it and even if you will you won’t get much beyond the pitch.

Look at the video I filmed with Democrasoft’s CEO. It is 17 minutes long. They didn’t pay me a thing to film it. They are paying $18,000 to give a six-minute pitch at Demo tomorrow. You really going to learn anything useful in six minutes? I don’t. I have spent hours with BugLabs’ CEO and company employees and even I know only a very small fraction of how to use their product that I should know.

So, how did the startup event business kill a great demo?

1. They tell PR people that they better not leak or suffer real consequences. It’s not only Demo that does this, by the way. So does Techcrunch and other events. That keeps them from talking.
2. Because of the “no leaks” policy you won’t be able to pre-tell bloggers and Twitterers and journalists anything real about your company.
3. Because of the “no leaks” policy you won’t be able to let same photograph or video your product.

What does that do?

1. It keeps a really good story from getting out. Why? Because I need a few days to do a “pro” video. Note that the one I’m including here is NOT a “pro” video. Compare the quality of it to the ones we do over on building43 with two cameras, pro microphones, tripods, and editing where we overlay demo video on top of the interview. For instance, look at this video with Clicker, an online TV guide.
2. It keeps us from comparing notes. This afternoon I called both Mike Arrington, founder of Techcrunch, and Louis Gray, guy who got me into FriendFeed and well-known tech blogger, just to see if anything coming out this week was on their radar screen. Neither was pre-briefed on companies coming out so we weren’t able to compare notes. That means a really great company won’t receive the hype it deserves and might even be ignored. Why? Because if you give an exclusive to another site I might decide that you already got enough coverage and since you don’t think I’m that important I’ll think you aren’t that important. It isn’t fair, but Techcrunch actually has institutionalized this policy and won’t cover companies if they aren’t given a fair shot at “first look” coverage. I agree with their stance.
3. It keeps you from letting us talk to customers or potential customers about you. Think about it. If you give us a week or two we’ll call up your potential customers and learn a lot more about how they like or dislike you. That makes for better blogs. In fact, some companies even are prepared inside the demo format to get around this. CitySourced, during its TC50 demo, brought a customer up on stage as part of its demo. I thought that was genius and it almost helped them win the entire contest.

Anyway, why don’t we have interesting product launches anymore? Blame the demo conferences. Good luck with that $18,000 spend. Oh, and if you want to launch your company you can do what Democrasoft did: call me. +1-425-205-1921 or see you at the YCombinator Launch Event on Tuesday.

Oh, and to the PR person who told Democrasoft that I couldn’t keep my mouth shut until the embargo ended at 9:01 p.m. tonight, here’s the proof you are wrong. Congrats Democrasoft and I’m looking forward to using your audience-feedback-and-collaboration tool on this blog in the future.

UPDATE: sure enough as of 9:22 p.m., 21 minutes after the embargo ended, only VentureBeat covered the companies (VentureBeat runs the Demo Conference). Techcrunch and Mashable (both more important blogs for startups) didn’t cover the companies.

UPDATE2: does this matter? Well, the Google Buzz team didn’t show their service to anyone outside of Google. That turned what should have been a good launch into a disaster. We could have warned them about some of the issues they faced in first week. But they didn’t ask. The PR advice they got was wrong and actually hurt them.

There’s a ton of chatter on Techmeme today regarding iPad and Flash and HTML 5. Again. In particular don’t miss posts from ReadWriteWeb regarding Flash vs. HTML 5 speed and PC World’s comparison of HP’s new Slate vs. the iPad and how the focus will be on Flash.

Yesterday I sat down with top execs from Adobe’s Flash team. I filmed two videos:

1. A video demo of a variety of things Adobe announced at the Mobile World Congress, including a new Flash player for Android and Palm Pre (I played with it yesterday, very nice).
2. A response to Apple about Flash’s appropriateness for including on iPhone and iPad.

Why won’t the iPad have Adobe Flash technology? Anup Murarka director of technology strategy and partner development for the Adobe Flash platform and Aaron Filner, group product manager of Flash platform, focusing on AIR, answer some of the reasons why Steve Jobs doesn’t put Adobe Flash onto the iPad in one of the videos I filmed yesterday when I visited Adobe’s offices in San Francisco. Things like:

1. It will chew up battery.
2. It will crash or be buggy.
3. It doesn’t work with touch interfaces.
4. It won’t perform well enough.

They take on each of these complaints about Adobe Flash and explain what has changed with the Flash 10.1 player.

My thoughts? I’m buying an iPad anyway (we’re even having a party at the Palo Alto store all night on the evening of April 2nd) and I have iPhones. My life would be better if Flash shipped on iPad, but it doesn’t look like that will happen. So, developers are going to be forced to build two versions of their web pages if they care about reaching me as a customer and one of those versions will need to have no Flash or Silverlight (Apple is also resisting including Microsoft’s Silverlight platform).

But Adobe is doing a pretty good job of keeping Flash developers’ skills relevant. You can build apps for iPhones or iPads in Flash and compile them using some new tools that Adobe has been showing off and will ship before July. Even Adobe’s own Photoshop app on the iPhone was built in Flash and compiled using these new tools. That’s a compelling story.

I have to admit, though, that I will be checking out other competitive devices from Google and others. I already have a Droid, which will use the new Flash 10.1 player just fine and I expect I’ll check out the new HP tablet and, especially, ones that will come with the Google Chrome OS later this year. Those, I expect, will support Flash and that could be a big deal in future device decisions.

How about you? Will you decide not to buy Apple products just because they won’t run Flash in Web pages?

Marc Benioff, CEO of Salesforce, has been using the bully pulpit over at Techcrunch to tell everyone that how we work together is about to radically change to be more like how we are able to share photos and fun things with each other over on Facebook. He’s right, but I’m not sure yet Salesforce is really going to be the one to lead us into this new world. He recently told me what Salesforce is trying to do with its entry into this space, Chatter, and I got a separate demo of Chatter’s newly shipped beta on video. You should watch both of those to get up to speed on what Salesforce is trying to do.

Other companies like Yammer, SocialText, Jive, SocialCast, and others have actually been doing the harder foundational work here of trying to convince us all to bring socially collaborative services into our workplaces. Yesterday I sat down with Yammer’s CEO, David Sacks, and talked about the industry and what Yammer is doing (Yammer was first to bring microblogging streams inside corporate firewalls and won TechCrunch 50 two years ago because of that).

I’ve been going around this enterprise world trying to understand it. I recently visited SocialCast and talked with CEO Tim Young about how he sees this revolution taking shape (and how he views Salesforce’s entry into it). In the interview you’ll hear Tim tout his advantages: that SocialCast is runable both on its servers, but can also be run on your own servers inside your firewall, or on your own infrastructure. Enterprises in healthcare, pharmaceuticals, and banking will want to do this and won’t go with the Google or Salesforce model of “run it on our servers, they are safe, promise.”

I also talked last week with SocialText’s founder, Ross Mayfield. SocialText was the first company into this new “Enterprise 2.0” space and they just shipped a new version that has a much broader range of applications than SocialCast or Salesforce has (spreadsheets and wikis, to name two) that are integrated deeply into its socially collaborative streams. Companies that want a complete set of applications should look at SocialText.

But, now, don’t miss what Google did last night (it turned on the Google Apps Marketplace). It’s big. But even more exciting and potentially revolutionary was the Gmail integrated contextual apps extensions. These let developers integrate all sorts of enterprise data right into Gmail. You can see where Google will go next, right? An enterprise version of Buzz with these widgets integrated into Buzz messages. Salesforce is actually ahead in integrating its partners’ data right into its feeds with Chatter, but it’s clear that window will close pretty quickly as Google keeps building its Enterprise Reef (my term for all the various projects that Google is stitching together). If you are interested in the enterprise space, I’d definitely watch the video presentations from last night. Salesforce has a few million users, Google has 25 million users, so you can see the relative strength of Google’s moves. Salesforce must articulate a strategy of how it will both partner with, and differentiate from, Google’s reef.

After the presentations last night I talked with executives from Zoho, Atlassian, and other companies. They agree with Benioff that a revolution at work is underway. They are seeing sizeable sales and adoption into enterprises as we all change how we work from a file-based and email-based system of working to a socially-collaborative feed way of working.

This is also why the most important panel at SXSW will be the Activity Streams panel. All of these companies need to adopt standards-based stream formats so that they can easily interoperate with each other and all the data sources that will need to shove data and reports into our work streams of the future. I’ll be there and will report more on Saturday as I understand more about the state of the art.

Are you feeling this revolution yet? Are you changing how you work with others? Or are you still only using email and Microsoft Sharepoint to collaborate with your coworkers? If you are, beware, your work life is about to change big time.

If you work at a company like Jive, SocialCast, SocialText, or Salesforce, what do you think? Are Marc Benioff’s moves important?