

The Twilight of Venture Capital - toby
http://twilightofventurecapital.blogspot.com/2009/01/engine-of-venture-capital.html

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baguasquirrel
"Smaller new tools emerge around the fringe of the market every day."

Isn't that how all new tools emerge?

I'm not going to disagree with the main premise which is that real innovation
on the scale of the invention of the transistor are slowing significantly.
Judy Estrin's book details this trend painfully, and lays down good evidence
that it started around the 80s.

That said, I think it's useful us for to pin down what revolutionary "new
tools" are, and where they come from, yes? I feel that this is an important
nitpick because it is hard to say where "new tools" come from. They do
certainly seem to loosely and randomly come from academia (see
<http://en.wikipedia.org/wiki/Transistor>,
<http://en.wikipedia.org/wiki/History_of_molecular_biology>) and sometimes
from tinkering (<http://en.wikipedia.org/wiki/Automobile>). However, these
advances were always on the fringes.

What will the next jump be? Quantum computing maybe? It seems neglected and
pushed to the fringes now so it's quite possible that that will indeed be it.
After all, it seems that it's hard for people to seriously innovate in the
limelight.

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strlen
No new tools will emerge that make capital creation possible by small players?

That's a very hubris-tic thinking. I can already think of at least one that
emerged recently - unprecedented parallel computation power. "Recently" here
meaning after google IPO: virtualization, out of the box distributed
computing, out of the box data mining/data analysis tools, on-demand
datacenter capacity, cheap multi-core CPUs.

This "tool" just needs a "killer app" that would make this attractive to
consumers (all these technologies are already attractive to businesses and are
being adopted at enormous rate): I can already think of big players providing
desktop virtualization, one YC funded start-up providing a virtualization
based "Windows app store".

Here's another "tool" related to this theme: kernels and networking stacks are
able to handle increasingly higher and higher number of simultaneous
connections (here's a thought: read up on the epoll Linux system call and try
and see if Meebo would have been able to start without a significant up-front
hardware investment if such a facility was not available).

The only reason I mentioned those "tools" is that it's my specific interest:
distributed computing. I see no reason to think there aren't other such tools.
For the 2005-2008 "Web 2.0" boom, for example these tools were AJAX, Flash and
broadband connections -- allow web applications to not only feel and act like
desktop applications, but also do what only desktop applications once could,
e.g. edit and play video or edit/mark-up photos in full size and colour. Would
youtube or Flickr (both of which brought money to their investors) have taken
off if there wasn't wide-spread adoption of cable and DSL?

Also I fail to see how "cleantech" (as much as great deal of it is buzzwords)
can't create any new such tools: what about low power, low cost CPUs powering
smart-phones and netbooks? Now any one can build rich applications that have
almost persistent power and Internet connection (an Internet-connected
computer independent of the power or land-line phone/cable grid that's
hundreds of times faster than the computers provided computing power to entire
universities).

