Silicon Valley has been the hub of technological innovation for decades now. Everything important to do with technology happens there. Apple, Facebook, Microsoft, eBay, Dell, LinkedIn and other major companies are all based there.
It’s also the location of hundreds of start-ups: Companies hoping to make a dent in the industry with their ideas and become the next multi-billion dollar company. After all, Facebook started that way. Plenty of other companies have managed to get millions in funding with nothing more than some talent and an idea.
But apparently it’s gone on just a little too long. Apparently, Silicon Valley may be at an end.
At least, that’s according to Yammer founder David Sacks. He just sold his company to Microsoft for more than $US1.2 billion, and is sitting pretty after a nice acquisition.
But in a conversation thread on Facebook, Sacks says he fears the age of Silicon Valley may be at an end – and he actually has a point.
“In order to create a successful new company, you have to find an idea that (1) has escaped the attention of the major Internet companies, which are better run than ever before; (2) is capable of being launched and proven out for ~$5M, the typical seed plus series A investment; and (3) is protectable from the onslaught of those big companies once they figure out what you’re onto.”
“How many ideas like that are left?”
It’s a fascinating question, and plenty of other investors thought so too. Sacks’ Facebook comment started a thread among prominent investors including Marc Andreessen, who put forward their own arguments about where Silicon Valley is right now.
In answer to the question, “how many ideas like that are left”, Andreessen replied, “an infinite number”.
“Human creativity is limitless – which doesn’t make it easy, but does mean the opportunity is unending,” he said, noting that larger companies simply run out of steam to innovate.
Friendster founder Jonathan Abrams added his own comment, suggesting Twitter and Facebook may just be “as big and old as Yahoo and AOL are today”.
It’s a fascinating thread, the entirety of which is available to read here. But equally interesting are the responses. There’s a response here on TechCrunch worth reading, while The New York Times reported on the issue as well.
But the best response arguably comes from tech columnist Sarah Lacy, who wrote on her own website that contrary to Sacks’ opinion all the ideas are gone, this doesn’t necessarily work in reality because the Valley “doesn’t function on rationality”.
“Witness some of Yammer’s competitors in the burgeoning enterprise world. At Box, CEO Aaron Levie has turned down at least half a Yammer from Citrix, and Asana’s Dustin Moskovitz and Justin Rosenstein have itntimated that to leave Facebook, work for years on a company, and sell for “a mere” $1 billion would be a disappointment.
“Are they silly kids with no experience in enterprise who have no idea what lies in wait for them? Yep. And that’s why they may just pull it off.”
Lacy hits on a critical point – the most frequent success stories come from people who “don’t get all the reasons they’ll probably fail”.
It’s a contentious issue and certainly a controversial one considering Silicon Valley has been at the top of tech for decades. But tech companies know as well as any other that being on top can be a temporary status – could the same thing happen to the area that incubated these companies in the first place?
Earlier this month Wired reporter Mat Honan published a story about how he lost virtually all of the data in his computers and in the cloud due to a hacking attack.
It was a shocking story, especially due to the fact the hacker didn’t actually use any sort of digital method to find Honan’s password, but was able to use the phone support system at Apple to change the password and gain access to other devices.
From there, Honan’s MacBook, iPad and iPhone were all erased. His Twitter account was hacked and his Google profile gone.
As it turns out, not everything was lost. In this new story on Wired, despite the cloud being his downfall, Honan said he was able to get most of his data back over the course of several days.
Firstly, Honan was able to get back into his Google account using a series of security questions, including questions on how many people he emails and the type of folders he has in his account.
But the interesting story starts when Honan takes his MacBook to a recovery centre with the aim of retrieving the data – including pictures of his newborn daughter.
In a nutshell, here’s what happens when you take your machine to DriveSavers (and we’ll have a full rundown on this later). First, they remove your drive from the machine and put it in a custom adapter.
“From there they use a proprietary method to image your system and copy that data to a secure ‘slicked’ disk so there’s no chance of data contamination. This is done extremely rapidly so that the original drive doesn’t have to be powered up for very long.”
After a nerve-wracking wait, the company was able to recover 75% of his data.
“I am an over-sharer. But the things most intimate in life, I tend to keep private. And so although I have posted picture after picture to Flickr, Facebook and Instagram, the stuff that was really important — the stuff that maybe even was most important — has always been mine alone. It lived nowhere but on my hard drive.”
But not anymore. Now, Honan says thanks to this rather expensive $1,690 bill for data recovery, he backs up data locally, with a second off-site backup alongside two other methods. Four in total.
“Overkill?” he asks. “Probably. But I’m once bitten.”
The entire saga is a gripping read on how someone who fell victim to an attack actually managed to recover – and the lessons he learned about backing up data in the process.
YouTube is such a huge part of daily life now it’s hard to imagine a time before 2006 when it hit the mainstream.
Over that time it’s transformed from humble video uploading site into a powerhouse for viral content, into a money-making machine for the lucky few who are able to create their own original programming and leverage success into a payroll.
But as this story on Wired shows, it’s continuing to change in very big and dramatic ways – it’s coming into the living room.
The company just launched a new app for the PS3 video game console. Which, as Wired says, isn’t necessarily big in and of itself, but a symptom of what’s happening to YouTube as a whole.
“YouTube doesn’t want you to watch videos anymore – not in the singular sense, at least. It wants you to stick around and see what comes next. It wants you to start watching on your phone as you head home from work, pick up again on your TV as you relax in the evening, and then nod off to its content while you’re lying in bed, as it streams from your tablet.”
The biggest way it plans to do this? Channels.
As YouTube’s vice president of product management, Shishir Mehrotra, tells the publication, the old style of watching pay TV has changed as users are able to get content whenever and wherever they want.
“Cable has run out of space. If you’re going to broadcast content to everybody whether or not they watch it, you can only afford to broadcast a few hundred channels. But if you move to a world where you can broadcast on demand to only whoever wants it, now you can support millions of channels.”
These channels aren’t just content made by users, though. The company is spending $300 million to create and promote new channels run by celebrities and professional content companies. Entertainment companies are now producing huge swaths of original content for their own channels – the only difference between this and television is that you can watch this at any time, whenever you want.
“Want your MTV? I mean old-school, music videos broadcast all the time? They’re on YouTube, powered by the Vevo channel.”
“Want the best big wave surfing channel on TV? It’s also on YouTube. Or how about the new drama series from Jon Avnet of Black Swan fame? It’s called WIGS, stars A-list actresses like Jennifer Garner and Dakota Fanning, and is only on YouTube.”
It has some huge problems ahead – including how to get people watching these channels above other content. But to be sure, cable television is changing – and YouTube is leading the way.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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