New Reality: Silicon Valley Wealth Machine - The Rebooting Meritocracy
The Wall Street Journal has a great perspective on how regulation is hurting entrepreneurship. Add the lack of research mentioned here (below) and the opinion is complete.
Businessweek had a post last week about Silicon Valley wealth machine. Silicon Valley is going through another downturn. It’s the second major downturn in less than 10yrs. I’ve been on the ground for all of those years. It’s down, but not completely ‘out’.
Silicon Valley is a special place for entrepreneurship, and it continues to be. The issue is not that there is a wrench in the machine, but that the machine is broken. It’s rebooting.
One thing I love about Silicon Valley is that there are no handouts. It’s the ultimate entrepreneurial meritocracy. Change happens and it happens both from the bottom up (entrepreneurs) and the top down (capital market). The question is which force is driving the change.
Redistribution of wealth is upon us. The entrepreneurs and investors that move on this current market opportunity will capture the proverbial “chips on the table”. As an entrepreneur, I love this market. Opportunities are everywhere. Unlike the dot com bust, this tech (entrepreneurial) market never really crashed. Everywhere I look I see discounts and new opportunities. Smart money will move around, but in select places. Is the market scary? If you’re an incumbent it sure is scary.
Silicon Valley Web 2.0 is hurting, but not for the obvious reasons. A bigger force is at play here - massive redistribution of wealth is taking place. Some are scared, and some are welcoming the opportunity of possibly acquiring the wealth “on the table”. I think that Facebook and Twitter are great examples of what might be possible. Facebook will become the next Google. The only thing holding them up is that the ‘new revenue’ model that is soon to arrive at the “station”. When that “train” arrives (and it will) Facebook will say Goodbye to all the naysayers.
Research & Development Void?
The bigger picture is more long term and that’s all about research and development. Judy Estrin recently came out to talk about something really important - the innovation gap. Let me translate her thesis - we are screwed if we don’t have steady research unencumbered by short term agendas. Think how important institutions like Stanford, MIT, and SRI have been to Silicon Valley and entrepreneurship. Without these deep research institutions we would not have many innovations that created wealth - hello Ethernet; hello Apple; hello Cisco; hello Google, ..etc.
The lack of institutional research leaves a void in the Silicon Valley ecosystem. John Markoff postulates in his book “What the Dormouse Said” that the culture and research of the 60s drove the PC revolution. The question now is what revolution are we developing and where is the research? Will we miss the next important energy, medical, or tech breakthrough? Where is our modern day moonshot mandate?
How will it play out? The future is unwritten.
Great post John… This is an interesting phase in the story of technology and our nation. The stakes are high, absolutely. We have the country in a recession, everyone tightening their belts, and despite the current price of fuel, energy is still a huge concern. I’m all for the serious domestic spending proposals, I think much good will come of them. I think however that the next technology boom will arrive in the form of entertainment, maybe something phone-based like the iphone, or games, or some other media. In the enterprise, companies that embrace technology now will be a step ahead and that’s where the movement and Silicon Valley will need to continue to press. There are definitely opportunities on the table. Facebook, Twitter, great examples. The question is who will drive these opportunities and put in the research, the time, the passion, the financial backing, The next Google is out there.
Comment by John Casaretto — December 23, 2008 @ 3:45 pm
[...] · No Comments John Furrier put together a great post today on the state of Silicon Valley @ BroadDev Worth a read on what’s really going on out there and hints at what is coming [...]
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