These are interesting times in Silicon Valley.
On one hand, after the demise of the dotcom bubble both companies and VC are having to recalibrate their plans.
There's no way VC funds can manage the money they've raised. They were opportunistic and said: "Gee, I can get a 2.5% management fee on $1 billion, just like I did for $200 million, and that money ends up in my pocket even if I'm sitting on it. That's kind of sweet." And they figured out a way to rationalize it. But in the cold light of day, most of the funds, if they're honest, are saying they can't manage this money.
In addition to the fact that valuations are down significantly across the board, funds can't really invest more than $3 million to $4 million in the beginning of a company because they want to leave enough of its value in the hands of the entrepreneurs to make sure they stick around.
On the other hand, the valley's entrepreneurs and technologists are ticking along. Without the bubble's demand for instant success, people are working on new technologies rather than quick-money schemes. This very blogging phenomenon is already showing that it will have some effect on how people get their news, and, when coupled with wireless internet access, real-time blogging may revolutionize event information flow. Dave Winer says:
These are extraordinary times. Never before has the money of the technology business been so interested in new ideas. We have them. The trick is to use the technology to entice the investors, as users, to experience the excitement of the network, for what it's really good at, not tethered to the empty missions of the dotcom period. That's why having a conference in Silicon Valley, soon, interests me so much.
I think the valley is digging itself out of the rubble. The excitement level is low, but it's picking up steam.
12:37:23 AM 
|
|
