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Just What is Silicon Valley Up To These Days? July 9, 2014

Posted by Peter Varhol in Software platforms, Technology and Culture.
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I think a lot of us, both in and out of that geographical location and state of mind, wonder just the same thing. When we see fledging companies getting a million dollars or more to develop an app that lets you grab a parking space, or pay for an already-made restaurant reservation, something is clearly wrong.

The question is where is the innovation? The press seems to congregate around those startups that exploit an imaginative though trivial niche. And, to be fair, so do the venture capitalists.

Slate (I still don’t know why we pay any attention to these folks) claims that innovation is being done by established companies these days, rather than by the startups.

I seriously question large companies trying to encourage and fund true innovation. Google does moon shots; Intel throws billions of dollars at a next generation set of chips that may or may not succeed, true. But that’s what established companies do.

But there is little room for true, market-breaking innovation in Google, Intel, HP (especially!), and the rest. Established companies simply have too much invested in their existing products to enable an innovation that threatens a billion-dollar business. These companies did their innovation, and now they are just trying to hang on.

But the Slate article is completely wrong on several accounts. For example:

>> true startup companies like Apple and Microsoft, which lacked those ties to academia and government, innovated only in the consumer sector.

Um, no. That’s not how Apple and Microsoft succeeded. Both desperately pursued the business market, Apple with the LaserPrinter, and Microsoft with Office. Microsoft ultimately succeeded more, but at the expense of longer-term viability.

Academia has been irrelevant as an innovator for a long time. Those that see Xerox PARC as a part of academia are seriously mistaken; it was very much industry, without a way to commercialize. Same with AT&T (not the same AT&T today, you should be aware) Bell Labs.

I do believe that innovation occurs in waves. The fact that we see so many “me too” social interaction companies today says that we are in a period of consolidation, not innovation. Still, innovation will happen again, but the companies of today, even the leaders (are you listening, Facebook?) will not be the true innovators ten years from now.

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