10 Comments

Summary:

With all the mash-ups, scraping, and remixing, sometimes I wonder if pure technology matter? Seldom do I read reports on infrastructure, the chips and optical components. The analysis of this blog’s traffic patterns also shows that people are more obsessed with Google than with say JDSU. […]

With all the mash-ups, scraping, and remixing, sometimes I wonder if pure technology matter? Seldom do I read reports on infrastructure, the chips and optical components. The analysis of this blog’s traffic patterns also shows that people are more obsessed with Google than with say JDSU. Mike Hirshland, a partner with Polaris Ventures, perhaps channeling legendary investor Peter Lynch, thinks most people like what they can use, and thus focus on it.


Folks over at Roeder-Johnson, a SV public relations firm decided to survey some of the key Silicon Valley players — venture capitalists, entrepreneurs, journalists and analysts — and found that nearly 91% of those surveyed agreed that “unique technology is crucial to the success of start-up companies today?” Interesting, given the mash-up times of today, though I have too many different opinions on this subject.

One respondent, a venture capitalist, wrote: “Relatively speaking, unique technology is less important now than five years ago. Today, companies appear to be valued on their market success (as evidenced by customers and revenue) rather than purely on ‘game changing’ technology.” Another, a repeat entrepreneur, volunteered: “The value of unique technology is based on what the company is trying to do. It’s all about fulfilling the customer need which can be done with technology, service, packaging, or existing technology…. All are valid ideas for company creation….Dell is quite successful without unique technology and there are many others.”

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  1. “Does Tech Matter?” It depends on the goal. If you want the startup to get to a working prototype fast so it can be sold to a bigger company, then yes tech matters. In the semiconductor world, this type of technology-only play is seen more in the standards space (wireless etc.). Here you are not explicitly trying to solve any unique problem all by yourselves; you are just making sure your prototype is standards compliant and competitive. But if you are a startup that identified an interesting end-consumer problem big enough and financially worthy enough of a solution, then it is the consumer ‘s experience that matters more than the tech. That Dell is a good example, Apple is a better one. More often I’ve seen that if the customer is from the value-chain (not the end consumer) then tech matters to your customer a lot. If the customer is the end-consumer, like you and me, tech does not matter. But, alas how many of us remember that, sigh.

    P.S. Among the four groups of “Silicon Valley players” referred above in the survey, it’d be interesting to see the feedback from entrepreneurs alone and how it compares with the rest of the bunch. Just a thought.

    RK

  2. C. Enrique Ortiz Tuesday, January 24, 2006

    It is about the product, not the platform or the technology… That is what the customer buy. When getting acquired though, it is about the product, the customer base, and yes, the technology.

    C. Enrique Ortiz
    (Who learned this lesson the hard way…)

  3. I think it is easy to ignore the technology, often because it isn’t a revolution but an evolution of existing systems. Particularly with new internet startups they aren’t really selling a technology at all. They are selling a combination of exisiting technologies with some refinements. Most of the web startup’s aren’t about creating new technology but putting existing technologies together in different ways or to different uses. Which is not unexpected in a mature industry.

    I personally would like to know more about groundbreaking technologies. It is fascinating to think about how these new technologies can be put to use and disrupt the status quo of established industries. A good example is personal fabrication technologies. I can see these technologies disrupting the manufacturing industries immensely.

    Is Silicon Valley really still a the fore front of developing radically new technologies? I’m not sure that it is. It is certainly developing new ways to use existing technologies but developing new ones?

  4. Andrew Schmitt Tuesday, January 24, 2006

    When the technology takes precedent over the application need you have the seed of a bubble, aka Gilder and the Optical Bubble and the bogus doubling of Internet traffic every 9 months.

    The thing I find most interesting (and I’ve written about) is ‘The Industrial Accident’. New technology usually leads to applications never anticipated by their inventors.

    The direct answer to your question is ‘Lots of people care’ they just don’t blog about it as much as the Web 2.0 crowd does, and it doesn’t have the broad audience of Google. Everyone can go to google.com, not many people have a tunable SFF laser in their basement.

  5. If this is a “where’s the killer ap?” post, then my view is the killer ap deficit argument is way overplayed. It applies to desktop PCs, with the exception of some niche applications, but that’s about it.

    Ask yourself whether you would play with a game console if the machine got so hot it burned your lap, and you have your answer to whether chip technology matters. If the core tech guys didn’t figure out how to increase processor speed without melting the machine, we’d all still be playing Pong. And the XBox and PSP chips are a joint effort of Microsoft and Sony and their chip partners.

    Another example, do you think we could have 3G phones without DSPs and the like cramming more functions on silicon with every passing quarter? Not likely.

    Without Flash memory doubling density every year, faster than “Moore’s Law”, where would all the content on your portable device go?

    With respect to a new hardware venture, some of that, like the Flash, can come right off the shelf, but the ASICs, DSPs and the like, are tied pretty tightly to the company (again, with the exception of PCs, especially desktops). If your cell phone is going to be first to market with cell-fi capability, you’re going to have to make those chips in house (sorry, design them in house, or with a JV partner)

    Hang out at the EETimes website, and you’ll see what’s going on.

  6. Om,

    The venture market is rife with Consumer Internet and SaaS ventures at the moment. By the sheer loudness of that activity, the rest appears subdued. However, longer term, still, technology-driven defensibility is a desirable thing, even in Consumer plays … while MySpace leapfrogged the market by being early, it will be more difficult to do so as we go along.

    And I agree, hang out at EETimes to see the supporting chip infrastructure … remember SiP?

    Sramana

  7. Om, one of your biggest fans, Dave Burstein at DSL Prime, is covering tech full time. The only other subject besides tech on DSL Prime is politics.

  8. alex,

    i have to admit, i fall prey to the whole issue of web 2.0 at times and take eye of the ball. it is good to remind myself that i need to get back to the basics. i think it was more a reminder to myself. go geek old man!

  9. it is like fashion, goes in waves. enterprise software infrastructure was hot in early 90s, led to consumer-facing “sites” were the rage in the late 90s, gave way to deep infrastructure technologies (everything from Akamai to juniper to cerent and JDSU). postbubble, now it’s dot-coms again, fueled in part by the open source and XML stuff that was developed during the boom. as web 2.0 matures, there is going to be a new kinds of need for scaleability, security, and performance, just wait for the 2.0 wave to cool a bit…

  10. Jackson West’s Obsessive Compulsion » links for 2006-01-26 Thursday, January 26, 2006

    [...] Om Malik on Broadband : » Does Tech Matter? [...]

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