
Silicon Valley Just Ain’t What It Used To Be—And That’s a Good Thing - ssclafani
http://techcrunch.com/2010/09/26/silicon-valley/
======
iamwil
Again and again, the things that fundamentally change our lives and our
culture looked like toys when they first started. That doesn't mean every toy
is worthy of our attention, but people in tech should know better than anyone
that you simply can't tell which toys will be important.

When the radio transmission was in wide use, radio as we know it today (as a
music box) didn't exist. When it was proposed, a potential investor asked of
the inventor:

"The wireless music box has no imaginable commercial value. Who would pay for
a message sent to nobody in particular?"

Fast forward a couple years later, the inventor of the radio music box said of
the television:

"While theoretically and technically television may be feasible, commercially
and financially I consider it an impossibility, a development of which we need
waste little time dreaming."

So it is with software and hardware, and now social. If you're interested,
I've written about it before: [http://iamwil.posterous.com/who-would-pay-for-
a-message-sent...](http://iamwil.posterous.com/who-would-pay-for-a-message-
sent-to-nobody-in)

~~~
krschultz
There are plenty of examples of the opposite though.

The creator said the Segway would change the world and it certainly hasn't.

I think people pull up these tales too often, those stories are famous because
they are the _exception_ , not the rule.

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david927
Everyone is so defensive that no one is really listening to what the author is
saying. He's saying that SV used to be about driving innovation, not making
money. Facebook, Twitter, and Zynga are all silly companies that won't be
around in 10 years, and none make changes in improving our productivity. We
don't do more with less because of these companies. The opposite, they provide
us with entertainment. That's great, but it's not the core value that SV was
founded on and it's not what's going to last.

~~~
dillydally
You're wrong and I'm happy to bet against you.

Proof points: 1\. Tencent QQ is a Chinese social network for games. It's
essentially Facebook+Zynga combined. Many of the top games on Facebook are
ports of popular Chinese games, e.g., the farming genre. Tencent has been
around for 12 years and did over $1Bn in revenue in 2009, representing a 61%
increase in profits.

2\. Over 500MM people use Facebook every month. That demand doesn't just
disappear. The only way Facebook is going to lose is if someone comes along
and gives people something better to do with their time.

3\. Facebook has their pick of engineering talent in Silicon Valley. If you're
an engineer looking ad a mid-sized startup, Facebook is the best place to
work, hands down. Look at their open source projects (e.g., Cassandra.). How
about their PHP compiler? Or their numerous patches to memcache? It's clearly
an engineering-driven company.

4\. Just because you think something is frivolous doesn't mean it isn't
valuable. Was Atari frivolous? Electronic Arts? EA, obviously, is still around
and immensely profitable. Moreover, the same VC that backed those companies
also backed Apple, Oracle, and NVIDIA.

There are plenty of startups working on problems lower on the stack. One can
innovate at any level -- why is Minecraft any less valuable than a video game
that pushes the limits of modern 3D algorithms?

Was Facebook less innovative than PayPal? Oracle?

Personally, I think the attitude you show in your response is a defense
mechanism. You feel like you're somehow "above" Facebook and therefore their
success isn't valid.

~~~
prodigal_erik
At 1400 employees and four international headquarters, is Facebook really
considered a mid-sized startup? To me that phrase evokes a few dozen people
who took a sublet last year....

------
krschultz
"Twitter is building a realtime communications platform that is exponentially
more complex than, say, the telephone system (which is a one-to-one system, as
opposed to many-to-many)"

Talk about not having a clue.

So writing a software program is "exponentially" harder than developing a
working telephone, running a system of wires, inventing a way to switch calls
automatically, the entire touch tone system, running cables under the ocean
etc etc etc. Not to mention the telephone industry came up with some of the
best inventions in computing - they weren't doing that for their own fun, it
was useful because telephones were HARD.

Is Twitter hard? Yea, it has some good tech behind making it scale, but the
_basic_ functionality is pretty simple.

------
RealGeek
Most of the companies like Zynga and Foursquare are get rich quick schemes
powered by snake oil.

They talk about changing life and solving world's problems.. yada.. yada.. BS!

When was the last time any of such silly companies helped you with your real
life, I am not talking about a virtual fantasy farm.

Cloud Computing and iPhone are among the few useful innovations from Silicon
Valley in recent times. Even products like Basecamp, Zoho suite and Google
Apps are great.

*Hint hint, A bubble is in the making.

~~~
rblion
ICEBERG STRAIGHT AHEAD!

I hope people start to see the bigger picture when their virtual farms fail
and their check-in mania subsides...

The 21st century is primetime for humans to step up and finally solve problems
that have plagued our progress for centuries and here we have the masses
switching from coach potatoes to facebook zombies...

------
ttunguz
The problem with this article is the focus on the most visible companies that
generate the most revenue or grow the most quickly. There are significant
innovations pioneered by silicon valley companies that demonstrate remarkable
long term value. I'm also going to use Silicon Valley broadly to mean internet
startups because the valley is now more of a culture and group of people than
a region. Additionally, I'm choosing technically challenging problems instead
of difficult execution challenges or marketing challenges (SMB SaaS companies,
local advertising aggregators).

1\. Media delivery shift: Netflix, OnLive, Pandora are now distributing
previously physical media in ways that will disrupt their respective
industries. Blockbuster is now bankrupt.

2\. Communication: Skype is now the largest long distance carrier in the
world. It's Scandinavian, yes, but give me some leeway!

3\. Information processing: Palantir manipulates huge data sets for financial
institutions and the government.

4\. Financial markets: SecondMarket and TheReceivables Exchange are creating
markets in previously illiquid markets.

5\. Medical innovation: there are tens of companies working on EMR systems and
building business intelligence applications for hospitals to increase quality
of care while reducing costs

6\. Big Data: Hadoop and other NOSQL databases have been built in the past 10
years to enable massive computation on commodity hardware. Not to mention the
three storage companies that just sold for $1B+ each in the past 2 months.

7\. Energy: Solar panels, fuel generating algae, carbon sequestration:
Innovation is happening here in the valley using the techniques and science
developed for semi-conductor fabrication and novel ways of processing.

The most recognizable startups may not be innovative in the sense the author
is describing, but it's clear to me from an investment point of view that
there is more innovation across more industries occurring today than ever
before. And this innovation has just as much potential to dramatically impact
lives as did the semiconductor.

@ttunguz

