Posts Tagged ‘Venture capital’

Algorithms are out … exponential technologies are in.

May 21, 2012

Punch line: Despite the hoo[la around Facebook’s IPO, social media is already passé in Silicon Valley.

America’s innovation engine is now focused on transportation, energy and manufacturing.

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A couple of snippets from an editorial in the WSJ : The Future Is More Than Facebook by Rich Karlgaard  of Forbes.

Only a certain kind of company is getting rich in the Obama economy.

These are outfits that make algorithms — bits of software code cleverly strung together to take the form of an iPhone operating system, a LinkedIn social network, or a proprietary trading scheme.

But America can do better than that, and it will. In fact, the seeds are being planted now.

In Silicon Valley, investing in social-media companies is already passé. America’s innovation engine, Silicon Valley, is again overheating.

There’s a growing interest among bright minds to apply “exponential technologies”  to solve problems much larger than whom to friend on Facebook: transportation (smart cars), manufacturing (3-printing), and energy (high-tech horizontal drilling).

Question: If America could have only one of the following — Facebook, Twitter or horizontal drilling — which would be the smarter choice?

Happily, we don’t have to make that choice. America remains the world’s innovator, a country without limits.

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Cutting to the chase on Solyndra (again) …

October 10, 2011

Punch line: The proper role for government is to support basic research, not commercial ventures

Excerpted from the WSJ: The Solyndra Economy

“Listening to the President, Solyndra was a necessary casualty in the greater campaign to steer the U.S. economy toward Mr. Obama’s noble goals.

Private competition that winnows out losers is so yesterday.

Brad Jones of Redpoint Ventures got to the heart of the Solyndra economy in a December 2009 email to then-National Economic Council director Larry Summers:

“The allocation of spending to clean energy is haphazard; the government is just not well equipped to decide which companies should get the money and how much . . . One of our solar companies with revenues of less than $100 million (and not yet profitable) received a government loan of $580 million; while that is good for us, I can’t imagine it’s a good way for the government to use taxpayer money.”

Which is precisely the point.

The proper role for government is to support basic research, not commercial ventures that become exercises in taxpayer risk but private reward.

When government takes $535 million and invests in a loser, it not only wastes taxpayer money but it also denies that capital to some other project in the private economy that might have succeeded.

The Solyndra emails show how ill-equipped government is to predict the industries of the present, much less the future.”

Why no Occupy Wall Street placards on this one ?

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