

The Two Types of Companies in Silicon Valley - iProject
http://www.forbes.com/sites/michaelkanellos/2012/07/27/the-two-types-of-companies-in-silicon-valley/

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ChuckMcM
Sigh, generally I don't click through to Forbes articles, I should know
better. This one did not disappoint, I stopped reading right here:

 _"Look at Facebook. The company didn’t invent anything. Instead, it just
picked a better demographic—18 to 35-than LinkedIn or MySpace."_

Now look at a comparison of the market performance of FB and LNKD [1].

[1]
[http://www.google.com/finance?chdnp=1&chdd=1&chds=1&...](http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=1&chfdeh=0&chdet=1343423819927&chddm=19159&chls=IntervalBasedLine&cmpto=NYSE:LNKD&cmptdms=0&q=NASDAQ:FB&ntsp=0)

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msrpotus
Besides which, Zynga has been innovative and has come up with new ways of
spreading games. They might not have much of a technical edge, but it's not
like Zynga has never done anything new.

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rhizome
Scrabulous was two years before Farmville.

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dlitwak
Surprised that there are no comments here in favor of his premise: I for one
am getting sick of constantly hearing about the next "social local mobile app
that helps you rate the experiences of friend's of friend's cousins" getting
funded.

I know I am not the only one: the Founder's Fund's tagline goes something like
"We asked for flying cars, we got 140 characters."

Yes there is value in Facebook and Youtube etc., but he makes a good point
that most of these companies got the formula just a bit more right than many
other competitors with similar ideas. It is often just as easy for them to get
the next iteration wrong and lose the consumer. Instagram was the perfect
example.

There isn't anything necessarily wrong with this, I take a somewhat agnostic
view of it all, if you can make money doing it it is obviously valuable to
someone. And perhaps it's easier. But the companies who are doing something
more concrete and valuable should be getting more attention in my opinion, and
the investors should be focusing on them more.

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trekkin
The author is too extreme in his framing of business models and is missing the
middle ground that can be argued to be the place where a lot of true and real
businesses are.

For example, Apple did not invent the personal computer or the smartphone,
they just made these products actually useful for the masses. Microsoft's OSes
were not that good for the first twenty years, and Microsoft Office was in no
way a technological breakthrough, but MSDos/MSWindows + MSOffice did bring a
PC revolution and a PC on (almost) every desk.

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taroth
To summarize: a company is genetically either an innovating
"Breakthrough"(Intel, Texas Instruments, Google) or a sexy and shallow "Best-
Of-Show" (Zynga, Facebook, YouTube).

As others have pointed out, false dichotomy is false on several levels.

1) Even Breakthrough companies go through cycles of stagnation and innovation,
especially in the tech industry. Best-Of-Show Apple in the 90s compared to
Breakthrough Apple in the 21st century. Breakthrough HP in the middle of the
20th century versus Best-of-Show HP today. The list goes on and on.

2) Best-Of-Show companies often are innovating within their own domain.
Facebook today is simply in a different ballpark than 2003 Myspace with
sharing, groups, pages, etc.

3) Best-Of-Show companies can cause massive disruption in adjacent verticles.
Try finding a news station (online or offline) that will not reference
discussions on Facebook/Twitter.

The author repeatedly claims he is not making "a moral judgment", but that is
exactly what he is doing. His opinion is that innovation in
hardware/algorithms is more important than innovation in social/games. I am
not sure why he is afraid of speaking directly, but hiding arguments in false
dichotomies isn't helping anyone.

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jfb
I've worked at plenty of places that were better analogised as "Participant"
than "Breakthough" or "Best-Of-Show".

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dasil003
Nope, sorry, there is no such line to be drawn. The level of innovation of a
company is a continuum. The height of the barrier to entry that they create is
an orthogonal continuum.

