VC, your time is going to come (again)

I’m all for calling things as they are. ¬†For example, it’s obvious Led Zeppelin’s first album is basically just a cover album [6 of 9 songs = cover album]. And I agree with Alexander Haslip Facebook is basically just an ad machine. At least our ‘best and brightest’ aren’t becoming quants on Wall Street. So what is the root of the lack of ‘good’ things coming out of Silicon Valley? Venture Capital. What I mean is a lot of people like to go bowling but nobody is throwing money at them to eat pizza for 3 years and dedicate themselves to bowling like is happening with the ‘soft’ tech companies Haslip decries. All of these ‘soft’ tech companies are getting funded by venture capitalists. VCs have a herd mentality so when one thing makes money, they fund everything else that’s similar — we saw it 12 years ago in the dot bomb era, we saw it 8 years ago in 10GBASE-T PHYs [Teranetics, Plato Networks, Solarflare], and now we’re seeing it in social networking. And they don’t care if Silicon Valley “can do better”. The hope is to make some money. The second factor for the lack of groundbreaking companies being formed is the fundamental technology has already been developed. And often, it’s been open sourced. Firewalls, routers, website hosting softare, databases…Things that 11 years ago would require heavy development work and could get concomitant venture funding can now be deployed with a few GUI strokes. So now, rather than taking that and making better IT for medicine, it’s easier to remake VRBO into a hipper version, complete with meth pipes for added hipster cred. It’s interesting how some of the most successful communications IC companies (QUALCOMM and Broadcom) were founded by UC system professors without VC involvement. Maybe that’s the solution? Develop a fundamental technology at the right time w/o VC funding?

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