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Golden Age of Silicon Valley Is Over With Facebook IPO
Hugh Pickens writes "Steve Blank, a professor at Berkeley and Stanford and serial entrepreneur from Silicon Valley, says that the the Facebook IPO is the beginning of the end for Silicon Valley as we know it. "Silicon Valley historically would invest in science, and technology, and, you know, actual silicon," says Blank. "If you were a good venture capitalist you could make $100 million." But there's a new pattern emerging created by two big ideas that will lead to the demise of Silicon Valley as we know it. The first is putting computer devices, mobile and tablet especially, in the hands of billions of people and the second is that we are moving all the social needs that we used to do face-to-face onto the computer and this trend has just begun. "If you think Facebook is the end, ask MySpace. Art, entertainment, everything you can imagine in life is moving to computers. Companies like Facebook for the first time can get total markets approaching the entire population." That's great for Facebook but it means Silicon Valley is screwed as a place for investing in advanced science. "If I have a choice of investing in a blockbuster cancer drug that will pay me nothing for ten years, at best, whereas social media will go big in two years, what do you think I'm going to pick?" concludes Blank. "The headline for me here is that Facebook's success has the unintended consequence of leading to the demise of Silicon Valley as a place where investors take big risks on advanced science and tech that helps the world. The golden age of Silicon valley is over and we're dancing on its grave.""
The headline for me here is that Facebook's success has the unintended consequence of leading to the demise of Silicon Valley as a place where investors take big risks on advanced science and tech that helps the world. The golden age of Silicon valley is over and we're dancing on its grave
Eh, just because Facebook is also used by millions of ordinary people doesn't mean it's not computer technology company and, even more so, doesn't help the world. In fact I think that Facebook has done immersive amount of good for the world. What have you done, exactly? This is extremely obvious to anyone who is older than 15 years old and especially for those of us who live overseas and have friends, family and people all over the world and helps to keep in touch with people easily (and no, I'm not going to bother them all by emailing them on little things).
They are usually incorrect unless it's a living thing. The PC has been dead more times than I can count. So has the web. Move along, nothing to see here folks.
For no effort? Excuse me, but venture capital is integral part of current day innovation and companies. Without that capital there would be tons of products and ideas that would never see the day. It's also one of the reasons why U.S. has climbed on top of tech industry.
Also, it's not like they can loan money to every new comer. It takes time and work to evaluate potential ideas. There are risks involved. Yet, venture capital is one of the actual things that greatly increases innovation. But don't let that get into the way of your rant.
The conditions under which Facebook would be really worth $100 billion are that somebody with $100 billion in cash was prepared to offer that much for it, and it was accepted. The IPO is, in effect, designed to prevent us finding out the true market value of the company. All we know is that people who almost all already had shares were prepared to exchange them for Facebook shares. Those people might have thought that their shares were about to tank, or that they might make short term profits. We don't know.
The historical analogy, although the exact terms of the deal were very different, is the Time Warner/AOL merger. The merger valued the entire group at around $350 billion. It turned out that the analysts and the investors were comprehensively wrong.
Don't get me wrong; in the Wall Street casino, people may get rich dealing in Facebook shares. But, as set up at the moment, the actual value of the company cannot be inferred from the share price, and all the predictions of a change in world culture are as reliable as the same predictions that were made about the AOL merger.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
From TFWU: "If I have a choice of investing in a blockbuster cancer drug that will pay me nothing for ten years, at best, whereas social media will go big in two years, what do you think I'm going to pick?"
How did the economy get so skewed that something that is a real product which can serve a social good is ignored for sheer speculation?
And don't give me: "Rapid communications makes the economy more efficient" The economy was OK, even better, before Facebook. The economy even was OK before the internet, it just took a little longer to get things done( which may not be a bad thing). Also, efficient for who? Efficiency depends on where you are standing and how you measure it, e.g. immediate expenditure vs long term expenditure and immediate gain versus long term gain.
Basically people are speculating on a toy.
putting the 'B' in LGBTQ+
The problem with research is that it is open ended. You don't know what will happen. You have to explore many blind alleys before you you get something to work. But if you didn't explore them you'd never learn anything.
If you know what the result will be, how long it will take, and how much it will cost it is not research.
putting the 'B' in LGBTQ+
If I have a choice of investing in a blockbuster cancer drug that will pay me nothing for ten years, at best, whereas social media will go big in two years, what do you think I'm going to pick?
Remember the spectacularly huge Netscape IPO in 1995. Then this quote would've been:
If I have a choice of investing in a blockbuster cancer drug that will pay me nothing for ten years, at best, whereas web browsers will go big in two years, what do you think I'm going to pick?
Observe spectacular failure of VCs who failed to think for themselves, and just followed the herd long after the peak had passed.
Same story, different year. The smart money is still investing in biotech, which actually has a real impact on our lives. Nothing to see here...move along...
This guy sounds like another tech hipster to me.
No one will invest in a company making a super cancer vaccine? One would only make $100M from it? The author clearly knows nothing about the biotech field. People *are* investing in biotechs right now. The idea that people won't invest in other areas because one company made money is simply not in line with real world behavior going on right now.
In terms of Facebook, we'll see how that whole thing pans out for the people who are making Mr Zuckerberg rich right now. I suspect that the Facebook IPO will fall into the category of "moving money from the unwise to the unscrupulous" (much like most of the earlier dotcom IPOs). The Facebook insiders are making money. The underwriters are making money. I don't think the people buying Facebook are going to make money.