In an effort to replicate that success story, SXSW producers are offering The Launch Package. Priced at $5,000, the package provides floor space at March’s Film and Interactive Trade Show, program advertisements and posts on the SXSW Facebook page and the event’s Twitter account.

This is also the second year at SXSW for the Microsoft BizSpark Accelerator, a competition in which 32 vetted startups vie for the attention of industry notables.

“SXSW is trying to foster [the launch climate] more and more,” De Lucia said. “I do think there is infrastructure being put in place over the last couple of years to make it a great launching pad.”

One aspect that makes SXSW alluring for cash-strapped startups is that the buzz a company can potentially generate isn’t necessarily proportional to its marketing budget.

“I think it’s fair to say that the people who spend lots of money with little thought don’t do well,” Jones-Dilworth said. “But if you have great thoughts and ideas and the money to execute them within reason, I think you do pretty well.”

While money is always a challenge for startups, at SXSW getting a company or product to stand out in the crowd is an even bigger task.

Jones-Dilworth, whose firm is helping seven companies launch during the Interactive festival, said he’s taking different approaches for his clients.

For Bandwith.com, which is launching a voice product for consumers and businesses, Jones-Dilworth will seek attention by placing six British-style telephone booths at the Austin Convention Center.

Meanwhile, Austin, Texas-based Classhive, a social learning network startup, is looking at SXSW as a place to more quietly introduce its product to a select group of top industry and media professionals. These industry experts can give the company valuable feedback before Classhive’s planned launch in April, Jones-Dilworth said.

William Hurley said his company, Chaotic Moon Studios, a maker of Web applications, is spending its dollars on a party at Kung-Fu Saloon for friends, colleagues and the media. Chaotic Moon will launch its products at the party.

“The party seems like the best approach. We are not heavy on marketing or pushing ourselves into booths,” Hurley said. “We are not about getting 5,000 people at the party. We are about getting the right five.”

Beyond getting the right people to take a look at a company’s technology, another challenge for SXSW launches is first impressions, said Bohn at Austin Technology Incubator.

“It is just like the first time you meet a customer. If you don’t make an adequate impression at the scale of South By, it could be troublesome,” Bohn said.

As a bootstrapped effort, Clemens is launching SwapYourShop at SXSW on a roughly $250 budget. That money has been spent on T-shirts and a few thousand promotional lanyards, which will be part of its grassroots marketing effort.

While making a good initial impression is critical, engaging in followup after the festival is also important, Clemens said.

“You can make a splash at South By or start to get noticed. But if you don’t follow up afterward, then what good was it?” Clemens said. “For us, it’s making sure the product does everything we say it does so that they have a good experience when they go to the website.”

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Sandra Zaragoza writes for the Austin Business Journal.