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JANUARY 2013
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HEMISPHERESMAGAZINE.COM
Three decades on, this sort of epic
ambition is in increasingly short supply in
Silicon Valley. Where the early days of the
digital revolution were marked by larger-
than-life figures touting equally outsize
ideas, the Valley today is riddled with
niche startups nibbling at the extremities
of Apple, Facebook, Google and the other
big players. Innovation has become incre-
mental, a ma er of accessorizing rather
than breaking new ground.
Ifyoudon’tbelieveme,gotoTechCrunch
Disrupt or any other event claiming to
showcase the digital world’s best and
brightest. These gatherings are full of
zippy demonstrations revealing the
stunning impact a particular widget
will have on cloud computing, or the
potentialities of Big Data in the mobile-
social-networking-gaming sphere. And,
of course, everything is
destined
to go
viral—somuch so that there aremoments
when you feel you’re a ending the annual
meeting of the CDC.
For all the gee-whiz, revolutionary lan-
guage used at these events, though, they’re
really li le more than trade shows aimed
at catching the a ention of deep-pocketed
suitors. And in this regard they’re a roar-
ing success. Venture capitalists plowed $12
billion into Silicon Valley in 2011, up from
$1.8 billion in 1995. Plus, more than half of
this funding—$6.7 billion—went to so -
ware developers, up 38 percent from the
previous year, which can only mean that
thosewho pitched their tent in the field of
hardware development are losing ground.
This trend has coincided with another significant shi in the
economics of the industry. The old way to get rich in the Valley was
to build a company, have a blockbuster IPO andwait for the billions
to stack up. But this option has become less appealing, particularly
since Facebook’s flop last year, which followed a smaller-scale fizzle
by social games developer Zynga. The real action these days is in
acquisition: developing a smaller-bore product and waiting for one
of the big fish to snap it up.
While making a lot of people very wealthy, this approach can’t
possibly be sustainable. Sooner or later we’ll have more add-ons
than things that need to be added on to, andmore solutions to small
problems than there are small problems.
Take the world of car services. One of the hottest startups in
Silicon Valley right now is a company called Uber, which has an
app that lets you—wait
for it—request a livery
car. And while there
are other perfectly fine
ways to get a ride, like
calling one, the digital
taxi-hailing space is
already starting to look
cluttered, with outfits
like Hailo and Cabulous
clamoring to share
the spoils.
To be sure, the spoils
a r e c o n s i d e r a b l e .
Venture capitalists
have invested in this
particular arena to the
tune of $110 million–plus (Uber alone has raised $40 million). This
may sound like a major amount of money to throw at a minor
convenience, but that’s the way the game is played now. Instead
of making fewer, larger wagers, VCs toss small rounds of funding
at lots of companies. The understanding seems to be that while
many of these startups will fail, it takes only one big hit to cover
your losses.
There’s something a li le dispiriting about all this. HP, remember,
emerged from a garage full of oscilloscopes to become the world’s
biggest computer-maker. Google went froma grad school project to
the largest repository of information ever created. Apple morphed
from a lark for hobbyists into the most valuable company on the
planet. The people who built these enterprises had purpose and
passion, not just a desire to make a quick billion.
Romantic notions aside, the likes of Steve Jobs and Larry Page
allowed America to not only dominate the post-industrial age (and
to reapmuch of the economic benefit this entails), but also define it.
They really did find ways to change the world. Which is something
you can’t say about Angry Birds.
MARKMCCLUSKY,
special projects editor for
Wired
magazine, will have
you know that he is totally over his Angry Birds obsession.
JANUARY CROSSWORD ANSWERS
BRIGHT IDEAS
||
TECH
Where the early
days of the digital
revolution were
marked by outsize
ideas, innovation
today is more
about accessories
than breaking
new ground.
