

The Fading Of Silicon Valley Innovation - mactitan
http://prudentbear.com/index.php/thebearslairview?art_id=10747

======
AnthonyMouse
I don't buy it. The internet isn't the steam engine. The internet is
electricity. And we haven't even seen the end of the _that_ revolution yet.

The key point is that the author is comparing decades in other industries to
years in this industry. Which we're apt to accept because we see things moving
so much faster now. But some things don't move that fast. The reason we see
such rapid innovation in this industry is that the low barriers to entry
facilitate massive parallelism: There are a million teams implementing a
million ideas all at once.

But parallelism doesn't resolve dependencies. You can't invent something until
its time has come, all the prerequisites have to be there first. And the big
things tend to have a lot of dependencies -- because otherwise they would have
been done twenty years ago. This party is just getting started.

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ChuckMcM
I guess that people who are living with change can't see it clearly. Whenever
someone tells me "we're not innovating any more" I suggest they try a simple
exercise;

Revert your life to the standard it had at the 'end' of the innovation period
(this guy would have to go back to 2000). Remove all of the things you
couldn't do then, today. Convert your utilities to the same that you had then
(for many that would mean going back to dial up Internet but I digress). Now
spend a week in that life, come back and tell me that innovation has stopped
since then.

Fundamentally, people seem to start 'seeing' innovation in their teens, which
seems to be coming out of everything, and then by the time they hit their 30's
they stop seeing it. My thesis is that it isn't because innovation and change
has stopped happening, it is because they have become accustomed to it. Hence
the exercise to 'see' what you couldn't see because you were in the middle of
it.

~~~
smacktoward
I don't know if that thought experiment really understands what "innovation"
means, though. An alternative thought experiment, proposed by economist Robert
Gordon (see [http://krugman.blogs.nytimes.com/2012/08/28/is-economic-
grow...](http://krugman.blogs.nytimes.com/2012/08/28/is-economic-growth-going-
down-the-drain/)), gets closer to the heart of the matter:

 _You are required to make a choice between option A and option B. With option
A you are allowed to keep 2002 electronic technology, including your Windows
98 laptop accessing Amazon, and you can keep running water and indoor toilets;
but you can’t use anything invented since 2002._

 _Option B is that you get everything invented in the past decade right up to
Facebook, Twitter, and the iPad, but you have to give up running water and
indoor toilets. You have to haul the water into your dwelling and carry out
the waste. Even at 3am on a rainy night, your only toilet option is a wet and
perhaps muddy walk to the outhouse. Which option do you choose?_

~~~
doktrin
Frankly, that's an absurd comparison. Has anyone ever asserted that the iPad
is on par with _sanitation_ , running water and indoor toilets? Why not throw
in the wheel for good measure?

~~~
wmf
Kevin Kelly mentioned a counterexample recently:
[http://www.kk.org/thetechnium/archives/2013/01/the_post-
prod...](http://www.kk.org/thetechnium/archives/2013/01/the_post-produc.php)

------
BobWarfield
Oh golly, a PermaBear blog. That's going to be upbeat now isn't it?

The trouble with Eeyore's and Chicken Little's is they are always right. That
is they become right if you wait long enough and then they are only right for
a short time. That brief window is when they perk up all happy and smiling and
point out, "Hey, you should've listened, I was right."

Never mind the opportunity cost of waiting for the right timing. It's a good
thing the stock market charges interest on a short position so that there is a
cost to not being right NOW.

With that aside, the Consumer Internet focus has resulted in tremendously less
innovation in recent years. I've worked for 6 VC funded startups including 3 I
founded. Not one of them could be funded today because they were all started
with a slide show and a team.

The VC's of today want a product, happy customers, and even momentum before
they put much in. It's literally harder to do much within that window. See my
post:

[http://smoothspan.wordpress.com/2012/09/13/you-cant-do-
crp-w...](http://smoothspan.wordpress.com/2012/09/13/you-cant-do-crp-
with-a-750k-seed-round-in-enterprise-saas-so-dont-even-try/)

OTOH, it is possible to bootstrap like never before. Maybe there's innovation
to be had there. And there is talk of the VC's going back to Enterprise. We'll
see if anything big gets built or if they focus on the consumerization of IT
(aka more Consumer Internet sold B2B).

~~~
mactitan
Well, they were warning of the dot com and the mortgage bubbles before they
happened. Now they are warning of the gov bond bubble (seems like a good
chance). 3 of 3 wont be bad avg. But I do say if capital isn't funneled to the
valley (VC's) there will be less startups. (Do we need reckless money printing
to get new ideas/companies?....maybe so

------
dragonbonheur
There's an obvious cause for that: blogger hipsters using only closed down
iDevices , thus unable to see beyond the Apple walled garden and hipster geeks
using only closed down iDevices only to get the rug swept from under their
feet by Apple when they innovate too much.

As if nobody ever saw the numerous "Apple kicked me out of their store" sob
stories on HN.

Switch to PC and Android, there's much to do.

------
dasil003
Contrary to most comments here I think it's a pretty interesting article, much
better than the usual VC/blogger whining pieces we've been lately. There are
some real parallels there.

I think where these analogies break down is the fact that computing has much
wider applications even than something as fundamental as transportation. Well,
necessarily so because computing can be applied to transportation and
everything else. What "Silicon Valley" does is applicable everywhere for the
foreseeable future. I mean software is certainly not a solved problem and it
really won't be until the singularity is achieved.

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pedalpete
I think this article is looking at markets from the wrong perspective.

First of all the author discusses Silicon Valley innovation vs. the steam
engine and the automobile. Assuming 'Silicon Valley' is being used to equal
'technology', the author is comparing a market to a product.

Now, if the author had compared innovation in transportation (automobile) to
innovation in energy (steam power), to innovation in technology, they'd be on
to something.

Except that the thesis falls down when making this comparison. Sure the
automobile was a massive shift in transportation technology, but that was
followed up by the airplane, high-speed trains, massive public rail systems,
etc. etc.

There is still constant innovation in all of these fields, but could you
imagine what the world would be like if we had a new form of transportation
created every 10 years? I don't think the world would be able to keep up.

------
tumanian
The author seems to be mixing two concerns into one - the innovation in
infrastructure and the innovation in products. While a breakthrough in
infrastructure seems less likely( the hardware and the infrastructure of the
information systems have stabilized at this point) there are more products and
niches where addition of information processing capacity will lead to
innovative results. In that sense the comparison of silicon valley to auto
industry does not seem to be justified. Auto industry is producing a well
defined product, while modern SV allows application of a commodity across all
industries, just like electricity. Current generation of electric cars are as
innovative as steam engines during industrial revolution.

------
krschultz
Wait, between 1869 and 1950 there was no innovation in steam? Between 1960 and
today there has been no innovation in automobiles? What?

~~~
leoc
Yes, the _kaizen_ and just-in-time revolutions were centred in the post-'60s
automobile industry, were they not?

------
api
The Valley today strikes me as more of a Hollywood North, a media and
marketing center, rather than an innovation center. Most new Valley ventures I
see (Pinterest anyone?) strike me more as "web media productions" than tech
ventures. There's no new technology there.

Google seems to be the last tech innovator in the valley with the Goggles,
self-driving cars, etc. I really see Google as the last actual _technology_
company to come out of the tech boom of the 1990s. There hasn't been much
since, at least not in the Valley.

Further South you have Tesla and SpaceX, and you have some ventures elsewhere.

~~~
pg
You're falling victim to a common mistake people make when they rely on
anecdotal evidence to answer this question. Consumer apps by their nature are
more popular, and you're thus more likely to have heard of them.

~~~
mgummelt
Any debate about "technology" will devolve into definitions, but here's a
(possibly incomplete) list of top private IT for anyone that wants to draw
their own conclusions: <http://www.businessinsider.com/2012-digital-100?op=1>

Since most of these are e-commerce, social networks, media, and advertising
companies, I'm not convinced we're doing a good job making new technology.

------
michaelochurch
He's conflating an industry with a geographic location. In the 1960s, "Silicon
Valley" was dominated by big companies. Now it's overrun with dipshit social
media concerns that won't last 10 years. It was a different thing altogether
in 1975 and in 1999. In 2030, two questions are:

* What will be the geographic center of innovation?

* What industry will the innovation be in?

These are orthogonal. I can't answer either of these. I honestly have no clue.
I'll make one solid prediction, though:

I don't know what the Big Thing of 2030 will be, but it _will_ involve
computation. It'll be far outside of traditional IT (the use of computers to
implement 20th-century business ideas) and social media (same, but for 21st-
century cultural experiments) but whatever is Big during 2030 will require a
lot of skill when it comes to computation.

Of course, I have no idea whether this will happen in Northern California or
some other corner of the world.

What I think is clear is that _VC-istan_ innovation is over. The problem is
that the VCs talk to each other and collectively decide who's hot and who's
not. So, instead of getting true risk-taking, you have selection by committee
in the funding process. That is starting to fail.

~~~
noname123
Regarding computation, I respectfully disagree. I believe the shift from be
from software back to hardware again.

Failures in Computation: 1) general artificial intelligence, this has been
touted that it's just around the corner since 1970's; so far most practical AI
has been just variants of expert systems. 2) Bioinformatics, this was touted
in the early 2000's and by the Kurzeweil-crowd as the singularity moment that
will bring advances to biotech; unfortunately, all of the mountains of data
has not yielded any concrete results because it's too complex for simple
statistical methods. 3) Quantitative finance: from the failure of stat arb
funds in 2007 to the blind trust in BSM in derivatives risk management
software, mathematical models have beautiful assumptions that the world is
smooth whereas the real world is not.

Emergence of Hardware: Fab labs, 3D printers will enable delivery of real
consumer products via CAD schema. Alternative energy research, medical
robotics for remote surgical operations. Just look at the real trailblazers of
Silicon Valley, SpaceX, Tesla and Google Driver-less cars. All hardward
projects. Personally, I'd like to bone up EE, molecular biology lab protocols,
CAD, MechE skills instead of RoR or Facebook APIz.

~~~
michaelochurch
I think AI has achieved quite a lot. Consider Google and Amazon, much less
Watson. AI is like "magic". Whenever we figure out how to do something, it's
no longer AI. It's statistical learning or computer vision. However, the
problem of general AI turned out to be a lot harder than we thought it would
be. Moravec's Paradox deserves mention here.

Hardware and software will interact more in the 2010s to '30s. What will
people design all this awesome hardware with? Software. Taking the other
direction, I do agree that the hardware world is becoming more interesting to
people who might, a generation ago, have thought of themselves as "pure
software" people. In 1985, you could "do AI" and never go outside of a
garbage-collected language (Lisp). In 2013, it's hard to do high-performance
machine learning without having some knowledge of all the neat things people
can do with hardware (e.g. GPU programming). Also, the existence of continuing
education options like Coursera is making people more Y-shaped than T- or
I-shaped.

I agree with you that a lot of the "hot" work in the social media world
(learning a bunch of damn APIs) isn't very hard, deep, or interesting.
However, don't rule out software entirely.

~~~
SatvikBeri
I understand T-shaped, but what are Y-shaped and I-shaped?

~~~
michaelochurch
I-shaped: depth with no breadth (highly specialized, no cross-disciplinary
knowledge).

Y-shaped: some breadth at intermediate levels. More depth in one's non-
specialty areas than T-shaped. (The top of the T becomes a triangular funnel
instead of a bar.)

~~~
SatvikBeri
Thanks!

One thing I've noticed is that many of the most successful people are multi-
specialists, i.e., they have two (or more) "specialties" that combine in a
rare and valuable way. Examples include the rise of the "growth hacker" or
"data scientist", who are typically programmers applying their craft towards
marketing or statistics respectively.

There's both a perception component and a real value component. If you're the
best Marketer, other Marketers will frequently deny it, get jealous, or
sabotage you. But if you're "the Marketer who also writes code", nobody feels
threatened. You're competing in a different area, so people can support you
and ask you for favors when they need help.

In terms of real value, a junior programmer with strong business skills in a
company with no other programmers can contribute millions of dollars of value
through basic automation-I've actually done this. The same programmer will
have a much lower dollar value when surrounded by better programmers, at least
initially, because all the low-hanging fruit has been taken.

~~~
michaelochurch
Excellent observation. This relates to my observation that it's better to be
an "X Who Programs" than a "J.A.P." (Just A Programmer) in most cases.
Unfortunately, corporate HR systems are built on the idea that people need to
be reduced to a single, specific role.

Dimensionality is the rule, here. We suffer from it in hiring, where it's
literally impossible to meet perfectly the requirement lists many companies
put out (demanding 5 years of experience in a 3-year-old NoSQL database). This
seems to be a part of why hiring is so hard on both sides.

Yet, once people are working together, if people aren't careful, they forget
dimensionality altogether and attempt to form a total order, and it's this
process that leads to the insecurity and sabotage.

------
bsaunder
I think we are seeing the beginning of innovation from Silicon Valley. We are
just starting to apply computers to everyday life. We've largely tackled
communications. The next things seem to be more interactions between the real
and digital worlds (which self-driving cars seem to be an early example of).
3D printing (and the things it enables) and more widespread robotics seem like
obvious next innovations.

------
kstenerud
This article could just as easily have been written in the late 1990s, and
would have been just as accurate.

Technology becomes commoditized. It happened to steam engines, it happened to
cars, it happened to PCs and it's happening to phones and tablets today. But
it's a huge leap of faith to take that process and boldly state "Silicon
Valley innovation will fade like the steam engine."

~~~
mactitan
Innovation will continue but what? How about biotech having the most
potential? Where? in the valley or asia (where there's a growing mass of
scientists)

As things commoditize it seems design would shift to less costly areas.

~~~
eli_gottlieb
Biotech's big area is Boston.

------
bicknergseng
Just because people are continuing to commercialize mobile and internet
doesn't mean that groundbreaking innovation has stopped in other places... it
just means that the internet and mobile will not be the location of an
unexpected groundbreaking innovation. We were't printing DNA or 3D models in
our homes 10 years ago. Expect something from those in the next 10.

------
spiritplumber
Hey, I live in San Rafael and I invent stuff :P see my robots, they're
everywhere. there's still some hardware being designed over there, in addition
to us there's Inertia Labs and Calbay only in a 10 mile radius from my place.
Although that's the north bay I guess... maybe you have a point.

------
tlogan
Interesting article.

Or related topic, are there any SV startups working on quantum computers (or
just something which that has some of the quantum mechanical properties needed
for quantum computing)?

~~~
eoinmurray92
Groups like Toshiba at cambridge and EPN at Tyndall are doing a lot into
quantum key distribution and generating suitable photons for quantum based
logic ([https://www.toshiba-
europe.com/research/crl/qig/quantumkeyse...](https://www.toshiba-
europe.com/research/crl/qig/quantumkeyserver.html),
<http://www.tyndall.ie/content/research-4>), but commercial quantum computing
is still a way of, currently the most promising methods for doing quantum
logic are still at the optical lab bench stage, that being said a lot is known
about the problems ahead and how to solve them, I don't know much about non-
photonic approaches like Isaac Chaungs group at MIT which seem to have a lot
of merit (<http://web.mit.edu/~cua/www/quanta/>).

