Microsoft’s Xbox 360 console is now officially the best selling game console worldwide in 2011, selling a total of 14.9 million units last year compared to PS3′s 14.1 million and Wii’s 10.33 million. Read more…

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Dave McClure has very quickly become a major force in Silicon Valley, by making investments in more than 250 companies since launching his 500 Startups fund. In Mountain View, Calif. Wednesday, 32 companies from the third class of the 500 Startups Accelerator program showed off what they’ve been working on to investors and press. And I sat through all the demos so you didn’t have to.

Based on what I saw, here are my favorite startups from the demos, in no particular order:

Fitocracy

Out of all the personal fitness apps out there, Fitocracy could be the one that makes the most impact in actually getting its users in shape. The application, which so far gas only been available in a private beta, already has 230,000 registered users. And those users are pretty engaged, with about 79 percent checking in every day and spending an average of 9 minutes per session with Fitocracy. It’s done that by adding gamification to the fitness process — getting users to level up, complete quests and unlock achievements as part of what founder Brian Wang calls a real-life RPG. But the amazing part about those stats are that they’re from Fitocracy’s web-based app; an iPhone app is in the works but has yet to be released. One it is, I expect a lot more users to catch on and start using Fitocracy to track and improve their fitness.

Contactually

“CRMs are an $ 11 billion industry,” Contactually’s founder told the crowd at 500 Startups’ demo day. “But all CRMs suck.” You have to fill in information in forms and once they’re there, the information is difficult to extract and doesn’t actually help users manage their relationships. Contactually has a better way: it uses email — which is the common touch point for more or less all contact between human beings nowadays — and automatically helps determine which contacts are most important to manage. More importantly, it actually prompts users to do something with that info, urging them to follow up to important emails and contacts. But just because it gives a better way to manage contacts doesn’t mean it’s going to completely replace your CRM — it’ll also integrate with that CRM.

PayByGroup

Have you ever tried to book a trip with your friends, only to have a few of them lame out at the last minute, sticking you with the tab? Then PayByGroup is for you. The idea is to add a button to sites like Airbnb, Stubhub and the like that allows users to click a button to reserve an expensive hotel suite, a group of concert tickets, or a beach house and then invite other friends in a group to pay for their own share of that trip, vacation or event.

Switchcam

I’ve actually written about Switchcam before, back in a previous life when it was called Veokami. The startup is still focused on aggregating multiple user-submitted videos from the same event on public sites like YouTube and Vimeo and reconstruct that event with a timeline that allows users to switch from multiple angles. With a design refresh and a new brand, Switchcam has made a huge step forward. The startup hopes to make money by providing a white-label platform for performers and agents to provide user-created events on their own sites. Until now, Switchcam events have mostly been centered around music and concerts, but it sees an opportunity for sports and news, and even personal events like weddings and graduations.

Hapyrus

Hapyrus is looking to cash in on the big data craze by making it easier for enterprises to process and analyze that data more efficiently. According to co-founder Kentaro Suzuki, much of the inefficiency comes between engineers and data analysts who are tasked with making sense of big data. Because analysts are beholden to engineers to structure that data, engineers end up doing a disproportionate amount of the work. Hapyrus seeks to simplify things by enabling engineers to configure the software, freeing up analysts to run analysis whenever they want and quickly change parameters and needed.

And some honorable mentions:

Love With Food – I have a soft spot for subscription services like Birchbox, and Love with Food is a subscription service that delivers curated food samples to users and then allows them to purchase full-sized samples from its site. There’s a side benefit in that for each box delivered, the startup also donates a meal to No Kid Hungry.

MoPix – Honestly I might just like it because Mopix told attendees to use the hashtag #DVDisDead. But the startup is helping to enable independent studios and video publishers to reach audiences through digital distribution on new devices like the iPad. And that’s a really cool thing.

Brandboards – Brandboards is trying to make it easier for sports teams and stadium owners to simplify advertising across all the screens that are available throughout sports arenas. Teams like the Dallas Cowboys have thousands of displays throughout their stadiums and a captive audience, but inefficiencies in the sales process means about 30 percent of that inventory goes unsold. This startup is looking to change that.

Tiny Review – Like the bastard love child of Yelp and Instagram and Twitter, Tiny Review encourages users to mix photos along with three lines of text. And like Twitter, the inherent limitations cause users to be more creative with those reviews. As a consumer-facing startup, it’s a little bit of an outlier compared to the rest of the companies introduced, but that could be what makes it interesting.

72lux – 72lux aims to improve online advertising on sites by enabling e-commerce in publisher webpages. Instead of offering advertising alongside photo spreads that sends readers to outside sites, its technology allows publishers to make content shoppable right there. The startup is already pretty successful, with $ 9 million in its sales pipeline, and it’s working with top brands and fashion mags.

There were plenty of other cool startups introduced today, and these are merely a sampling of those I think are interesting.

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Comedian Louis C.K. recently self-released a video of his stand-up special, “Live at the Beacon Theater,” for $ 5 online. He personally paid for the production costs up front in an experiment to see if this was a cheaper, more efficient, and less restrictive method of getting his content to his fans. In doing so, he cut out paying the middlemen — including the marketing team — and avoided the red tape of working with studio executives.

In twelve days, Louis C.K. earned more than $ 1 million from people downloading the special — far more than the $ 170,000 it cost to produce the video. Louis C.K. gave his thoughts in a post on his site:

“I would have been paid [less than $ 200,000] by a large company to simply perform the show and let them sell it to you, but they would have charged you about $ 20 for the video … This way, you only paid $ 5, you can use the video any way you want.”

Coming from the online marketing world of The Search Agency, I was particularly interested in how he was able to reap a significant ROI without using any of the traditional or online marketing efforts usually made on behalf of comedians and entertainers. Google “Jerry Seinfeld” or “Jay Leno” and you’ll see the paid AdWords links.

Instead, Louis C.K. announced the release of the special on his website and followed up with a personal plea from his Twitter account: “Please don’t torrent this video. I paid for the whole thing with my own stupid money.” He also participated in a Reddit Q&A session with his fans and he discussed his video on “Fresh Air” on NPR. He didn’t appear on Letterman or Leno, he didn’t do an interview with the New York Times. He didn’t do any of the more traditional publicity executed by the PR and marketing teams in the lead-up to a big media product release.

He let his fans do all of the PR.

An alternative comedian, Louis C.K. does not have a PR team or community manager to manage social media assets. He claims to have little knowledge of social media. He told Conan O’Brien that he “hates Twitter.”  There is no official Louis C.K. Facebook page, and he personally manages and occasionally engages his 897,707 Twitter followers. At the end of the day, Louis C.K. followed the most basic best practices of social media and promotions outreach and reaped all the benefits of a best-case scenario.

Let me reiterate something — Louis C.K. is not terribly famous.  He doesn’t have a built-in fan base that will buy anything he tweets.  He has been a successful writer behind the scenes, but has not had enough onscreen time to earn mainstream fame.  His TV show “Louie” on FX was very quietly nominated for two Emmys in 2011, but the show’s highest viewership in history was recorded at 1.57 million viewers.  This is just a fraction of reigning comedy The Big Bang Theory’s lowest rating of 7.34 million viewers. Even reruns of The Big Bang Theory on cable syndication regularly defeat Louie — just last week 4.3 million viewers turned in to TBS to watch a rerun.

Without the luxury of stardom, Louis C.K. sold $ 1 million of video downloads by trusting his audience. He showed this by selling DRM-free videos, then gently asking them to purchase, not pirate. This openness built a relationship of mutual trust and respect with his fans.  Companies looking to create successful online marketing campaigns should try to build similarly long-term relationships with customers based on trust and direct communication.

All this success happened in the middle of the Stop Online Piracy Act (SOPA) bill controversy. Louis C.K. promoted his own video and demonstrated innovative entrepreneurship without losing significant revenue to Internet piracy. And he did this without any legislative digital protection, proving that making original content available, convenient, and reasonably priced can be enough to quell illegal downloads. Louis C.K. said on his website that “if anybody stole it, it wasn’t many of you. Pretty much everybody bought it.” Perhaps the burden should fall on companies to create products that appeal to willing buyers instead of asking legislators for protection.

Here is my list of lessons from the success of Louis C.K.’s self-released video:

1. Build relationships with customers using an approach that is engaging, personal, and honest.
2. Work toward long-term relationships with your customers so that they will trust your brand as long as you deliver high quality content and products.
3. Create a reasonable price. When the price point is attainable, both fans and people on the fence are willing to pay for the product rather than hunt for a pirated version.
4. Read up on the Stop Online Piracy Act. Stay informed when the bill returns to the House of Representatives this year. Check out Sergey Brin’s Google+ post and I Work for the Internet.

The thing is — Louis C.K.’s online marketing campaign wasn’t really a campaign. It was a public agreement that he made with his audience. He promised to create and release an honest product, and the audience promised to continue supporting his future projects. The consumers didn’t just buy a DRM-free download of Louis C.K.’s standup special — they bought into a trusted relationship with the comedian.

Jessica Lee is a SEO specialist with The Search Agency, an established search marketing firm with expertise in search, display and social media. 

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Walter Isaacson’s biography of Apple co-founder and former CEO Steve Jobs has risen to the top of Amazon’s  list of best-selling books for 2011 (via MacRumors), not even two months after its initial release in late October. The Jobs biography had already reached the No. 2 spot by November.

Steve Jobs sold 383,000 copies in the U.S. during its first week of sales, and it is also one of the fastest-selling nonfiction titles ever in the UK. The title broke records in many international markets, too, including Taiwan, where preorders were higher for it than for any previous book, and in Brazil, where it became the best-selling e-book ever in the country just two weeks after its initial release. Production plans for a movie are already reported as under way, after Sony Pictures acquired the rights.

I would wager there are a few records left for the Steve Jobs biography to break yet, since a lot of the holiday shopping season still remains, and interest in the book will likely spike when the paperback version is introduced. Subsequent major Apple product launches could also help renew interest in the company’s original driving creative force, so expect sales to remain strong throughout the new year.

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