Magazine article Management Today

E-Mail from the Valley

Magazine article Management Today

E-Mail from the Valley

Article excerpt

Ever since the personal computer boom, innovation has rolled in as regularly as the surf on the Pacific. There has always been something new -- PCs, enterprise computing or computer networking -- the swells all coming in at convenient intervals. Indeed, the venture capitalists and entrepreneurs even likened their skill to that of a surfer: catch the wave too early or too late and you would end up dunked; find the perfect wave, time it just right, and the returns make up for all the risk.

Until now. Same Silicon Valley veterans are starting to wonder whether their time is up, whether there are any more waves. And a growing number of the 1990s generation are heading off into sabbaticals, or more normal working hours at blue-chip companies.

Linked to the Nasdaq decline, the dry-up of funding and simple exhaustion after half a decade of 80-hour weeks, this scare is the most threatening of all those to hit Silicon Valley's self-image. But if the surf season has ended, we can see why by looking at current buzzwords.

B2B. Business-to-business services offering a marketplace for steelmakers suffered as badly as consumer internet companies in Nasdaq's spring stock meltdown. Part of the sector -- ventures providing software solutions to big businesses -- has recovered, along with the share price of market leaders such as Ariba. But these are companies that look suspiciously like the enterprise resource planning software giants that are anything but new. The B2B exchanges, which got all the business school graduates excited with their new models, are generally in trouble.

Infrastructure. The emblem of this sector is Loudcloud, a glorified web hosting company set up by Marc Andreessen, the founder of Netscape. His own trajectory tracks the change in Silicon Valley -- from software that defined the internet to server computer maintenance. Is infrastructure the new thing? Hardly. Infrastructure is Silicon Valley's safe haven -- always has been -- and that is why the sector is reassuring to newly risk-averse venture capitalists.

Optical networking. A subset of infrastructure, the part that can claim novelty, this is extremely lucrative. However, there is a growing sense that it is the last unpopped bubble of the tech boom. And, even if valuations are justified, the excitement is lost on most venture capitalists and entrepreneurs: the technology is too arcane to understand.

Wireless. When moreover.com, the company I helped found, went out on a $21 million investment round in April, I received a piece of advice: 'Include a slide on the wireless opportunity,' I was told. …

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