Yammer CEO David Sacks Predicts End Of Silicon Valley(techcrunch.com)
techcrunch.com
Yammer CEO David Sacks Predicts End Of Silicon Valley
http://techcrunch.com/2012/08/19/sad-sacks/
7 comments
Throughout history, there seems to be a number of personalities willing to claim that there are, "not that many ideas left."
I can't find it within myself to ever agree with them. There are so many things left to do that no one has done before.
I can't find it within myself to ever agree with them. There are so many things left to do that no one has done before.
I agree with with philmv on the point that the rate at which "immensely large companies" are being created has slowed down, but I also think that's just a natural filling up of the silicon valley pyramid. However, considering the rate at which startups are still being created, the middle and lower end of the sv pyramid still leaves plenty of room before we reach saturation. In fact, I'm more inclined to agree with Andresseen on that human creativity is an infinite resource.
I am friends with the wrong people on Facebook.
This reminds me of that old quip that music critics were predicting the end of bands that played guitars right about the time that the Beatles arrived on the scene. I think the lesson here is that as soon as you think it's all been done something unexpected will arise.
In other words, everything has already been invented...
The guy is onto something big. If you think about it, all tech ideas can be grouped into one of three categories:
1. Someone is doing exactly this.
Response: "How is this different from (someone already doing it)? Even if it's better, what keeps the biggest guys from doing the same thing?"
2.a. Nobody has done this.
Response: "There are a lot of very smart engineers out there. Wouldn't one of them be doing this if it worked? Even if you get it to work, what keeps them from just executing on the same thing, better."
2.b. People have tried and failed.
"A lot of people have tried this. They failed. What makes you think you will succeed?"
--
Now let's work through some concrete examples. First, take Google. When it launched as a search engine in Stanford, there were loads of other search engines. This puts it firmly in category "1". There was nothing Google could do that another company couldn't.
Next let's take eBay. When it launched as "a perfect market" based on auctions, nobody had done that. Firmly 2.a. category.
Finally let's take Dropbox. A lot of people had this idea. They failed. Firmly 2.b. category.
Basically, there is not an idea that I could name that doesn't fall into one of these three categories. You can dismiss everything.
I am personally working on a massive project that involves fundamental innovation and falls firmly in 2.a. It is really hard. Progress is very slow. As a break I've started a bit of a side project. This one falls firmly in 2.b. In the nineties and even before, this second project got loads of attention, huge amounts of research (I can find publications up the wazoo) and never took off. People tried to do it and failed.
What separates me from the opinion just expressed by David Sacks is: Fuck you, David Sacks. That's what.
1. Someone is doing exactly this.
Response: "How is this different from (someone already doing it)? Even if it's better, what keeps the biggest guys from doing the same thing?"
2.a. Nobody has done this.
Response: "There are a lot of very smart engineers out there. Wouldn't one of them be doing this if it worked? Even if you get it to work, what keeps them from just executing on the same thing, better."
2.b. People have tried and failed.
"A lot of people have tried this. They failed. What makes you think you will succeed?"
--
Now let's work through some concrete examples. First, take Google. When it launched as a search engine in Stanford, there were loads of other search engines. This puts it firmly in category "1". There was nothing Google could do that another company couldn't.
Next let's take eBay. When it launched as "a perfect market" based on auctions, nobody had done that. Firmly 2.a. category.
Finally let's take Dropbox. A lot of people had this idea. They failed. Firmly 2.b. category.
Basically, there is not an idea that I could name that doesn't fall into one of these three categories. You can dismiss everything.
I am personally working on a massive project that involves fundamental innovation and falls firmly in 2.a. It is really hard. Progress is very slow. As a break I've started a bit of a side project. This one falls firmly in 2.b. In the nineties and even before, this second project got loads of attention, huge amounts of research (I can find publications up the wazoo) and never took off. People tried to do it and failed.
What separates me from the opinion just expressed by David Sacks is: Fuck you, David Sacks. That's what.
David is arguing that the rate of creation of immensely large tech companies has slowed down. Ten years ago every other companies was becoming a billion dollar behemoth but these days you get acquired for immense outlays.
Marc is saying that we'll keep on having companies successfully getting bought out for years to come.
I think they're both right. It sounds like David is arguing a bit about The Great Stagnation at work [0] combined with how much easier it is to get $5 mil than $15+ mil. There might be a lot of $15 mil left, but we might be exhausting this generation's $5 mil ideas.
In terms of the overheated climate we're living in as a whole, I think the party will keep going on as long as interest rates and inflation keep being so low.
All of these companies have piled up immense reverses because the penalty from keeping it liquid is so minimal. In turn there's a lot of space to keep paying people these million dollar bonuses while generating the occasional cool new innovative feature.
This last bit is speculation on my part ofc.
[0] http://www.economist.com/blogs/freeexchange/2011/01/growth_2