Today's San Jose Mercury News had an interesting discussion on the softening economy and its impact on venture capital. This is a question which gets asked periodically and time and again the Valley comes up with yet another winning streak. First it was semiconductors, then the Internet, now in its second incarnation as Web 2.0, and maybe clean technology to come ? So, why the question now ? The Mercury News draws attention to the first quarter 2008 VC funding results and points out that poor returns are forcing a shakeout in the VC industry and money is flowing to the biggest firms. This, of course, is the essence of capitalism :-) Winner takes all.
What is most interesting is the chart they refer to while identifying the trend. They point to the dip in funding in Q1 '08. The chart, short as it is, from 2005 to 2008, has several dips in it already. I dare say that if the chart stretched back to 2000, there would quite severe dips from 2000 to 2003. :-) But, the Valley seems to come back with a bang. So, I would not count Silicon Valley out yet.
However, it is interesting to look at historical trends and see where the money seems to be flowing to. I really like the Money Tree reports. They let you slice and dice the data many different ways. Here you can see that Silicon Valley's lead is not going to be overtaken in the near term :-) The historical trend also does not show any recent sharp drop off, though, of course its not easy to match 1999-2000. :-) Where are the VCs who used to fund interesting projects like WebVan :-) ? It is rather interesing to watch the historical trends for VC funding for various sectors, like semiconductors , or software, or energy, or medical devices and equipment. Its easy to see what's hot and what's not over some period of time.
Naturally, the VCs seem to follow the money where the sectors are concerned :-) But, the regional dominance of Silicon Valley seems tough to beat in the near term. It does not hurt that the dominant VCs to whom the money is flowing, happen to be here either. However, it is true that globalization has had an impact. Many of the Silicon Valley VCs do have extensive operations and investments all over the world. In a sense, they go where the opportunity exists at any point of time, whether it is India, Israel, China, Korea or Vietnam. But, the Silicon Valley influence remains strong.
Madan
Showing posts with label Silicon Valley. Show all posts
Showing posts with label Silicon Valley. Show all posts
Sunday, May 11, 2008
Tuesday, April 15, 2008
California Clean Tech Open 2008 Launch
The California Clean Tech Open (CCTO) 2008 competition was launched at the San Jose City Hall Rotunda last Wednesday, April 9th afternoon led by San Jose Mayor Chuck Reed and David Rodgers from the US DOE. What was significant about the event was that this was the first time since its inception that the event was held in San Jose.
Maybe San Jose wants to show that the center of gravity for clean technology is in Silicon Valley. The venue was appropriate. It was the steel and glass rotunda of the gleaming new San Jose City Hall. This was my first visit to the new building and I must say it is quite stunning. You can check out pictures of the new City Hall here. There was a glittering reception with the usual Silicon Valley crowd of entrepreneurs, VCs, investment banker, attorneys and the like.
Mayor Reed issued a challenge to solar installers to enable zero upfront cost solar installations for homeowners within 60 days. Seemed like a tall order to me. But, SolarCity seems to have responded to the challenge with a proposal today which eliminates all up front payment for new installations in San Jose. But, unfortunately, the program only lasts for slightly more than 60 days, till the end of July :-) Solar City is funded by Draper, Fisher, Jurvetson and Steve Jurvetson was one of the speakers at the event. Its always interesting to listen to Jurvetson speak. His rapid fire delivery has a high content density and you can lose a lot in a minute if you are not listening. :-) In any case, he believes that the future is clean tech from a VC perspective.
Marc Gottschalk gave an overview of the 2008 competition. Eric Cummings of Cool Earth Solar talked about his company's success and his team's experience during the 2006 CCTO competition. Cool Earth Solar was the first runner-up in the Renewable energy category in the 2006 CCTO competition. They just raised $21M in Series A funding in February 2008. Gunther Portfolio has an even more detailed writeup on them from February. Hopefully, GP will be back in action with more interesting posts soon.
I had a chance to talk with Eric Cummings at the CCTO event. He remembered our meeting during one of the CCTO events in 2006. They have come a long way since then and the competition has helped them build a successful company. There was a poster at the Cool Earth Solar booth which implied that current renewable energy technology was inefficient and would lead to losses by the utility companies who invested in them. Eric seemed to imply that Dr. Borenstein's comments along these lines, a few months back were valid and more efficient alternatives were a few years out.
Overall it was a fun event to kickoff an exciting 2008 competition. Maybe this year's competition will breed more companies along the lines of Cool Earth Solar. The stakes are huge, if the latest award by PG&E to Brightsource is an indicator. The award is for 900 MW of electricity from five solar thermal plants to be built in the Mojave desert. If several of the other clean tech startups in the Valley start delivering on their promise, Silicon Valley will drive yet another global industry after semiconductors and the internet.
Madan
Maybe San Jose wants to show that the center of gravity for clean technology is in Silicon Valley. The venue was appropriate. It was the steel and glass rotunda of the gleaming new San Jose City Hall. This was my first visit to the new building and I must say it is quite stunning. You can check out pictures of the new City Hall here. There was a glittering reception with the usual Silicon Valley crowd of entrepreneurs, VCs, investment banker, attorneys and the like.
Mayor Reed issued a challenge to solar installers to enable zero upfront cost solar installations for homeowners within 60 days. Seemed like a tall order to me. But, SolarCity seems to have responded to the challenge with a proposal today which eliminates all up front payment for new installations in San Jose. But, unfortunately, the program only lasts for slightly more than 60 days, till the end of July :-) Solar City is funded by Draper, Fisher, Jurvetson and Steve Jurvetson was one of the speakers at the event. Its always interesting to listen to Jurvetson speak. His rapid fire delivery has a high content density and you can lose a lot in a minute if you are not listening. :-) In any case, he believes that the future is clean tech from a VC perspective.
Marc Gottschalk gave an overview of the 2008 competition. Eric Cummings of Cool Earth Solar talked about his company's success and his team's experience during the 2006 CCTO competition. Cool Earth Solar was the first runner-up in the Renewable energy category in the 2006 CCTO competition. They just raised $21M in Series A funding in February 2008. Gunther Portfolio has an even more detailed writeup on them from February. Hopefully, GP will be back in action with more interesting posts soon.
I had a chance to talk with Eric Cummings at the CCTO event. He remembered our meeting during one of the CCTO events in 2006. They have come a long way since then and the competition has helped them build a successful company. There was a poster at the Cool Earth Solar booth which implied that current renewable energy technology was inefficient and would lead to losses by the utility companies who invested in them. Eric seemed to imply that Dr. Borenstein's comments along these lines, a few months back were valid and more efficient alternatives were a few years out.
Overall it was a fun event to kickoff an exciting 2008 competition. Maybe this year's competition will breed more companies along the lines of Cool Earth Solar. The stakes are huge, if the latest award by PG&E to Brightsource is an indicator. The award is for 900 MW of electricity from five solar thermal plants to be built in the Mojave desert. If several of the other clean tech startups in the Valley start delivering on their promise, Silicon Valley will drive yet another global industry after semiconductors and the internet.
Madan
Thursday, March 13, 2008
A Parallel World
Today, Reuter's had an interesting article on Craig Mundie's vision of a parallel world. Craig Mundie is Microsoft's Chief Research and Strategy Officer and has inherited the mantle of Microsoft visionary from Bill Gates himself.
The article caught my eye for multiple reasons. I had the good fortune to work for Craig Mundie's company, Alliant Computer Systems (mentioned in the article) quite a few years back, doing what he suggests only a handful of people know how to do, mapping serial applications to parallel computers. It was an interesting experience. These were massive applications running into tens or hundreds of thousand lines of code which had to scale on multiprocessor systems to deliver performance and compete against supercomputers like Cray. The performance delivered could make or break the sale of multimillion dollar systems.
Yes, Craig is a visionary and always has been. To be picked as Bill Gates' successor in this role is acknowledgement enough. But, as he himself points out, having a vision is one thing, predicting when it will happen is another :-) I am sure those of us in the '80s and '90s who thought parallel computing was ready to take off can attest to that.
The current shift to parallel computing is born out of necessity, with single processors reaching capacity limits in terms of heat, power consumption and semiconductor process technology. Craig predicts the arrival of a new "killer app" to take advantage of the coming powerful parallel computing platforms and even a new programming language. He defines his challenge as taking Microsoft past its traditional strengths into new technology areas. This will be interesting to watch, because he has been an advocate of Microsoft's early participation in web based television and other leading edge areas, much before they were fashionable or profitable. It will be like Microsoft taking on some Silicon Valley attributes :-)
This would explain the rate of Microsoft's Silicon Valley acquisitions over the last decade. Dean Takahashi has an interesting take on Microsoft's recent bid for another Valley icon. Speaking of Dean, he has succumbed to the Valley's entrepreneurial lure and has ceased to write for the Mercury News. I am sorry to see him leave because he is one of the best technology columnists I have read and he captures the beat of the Valley so well. But, as always, endings mean new beginnings. I wish him well in his new venture.
Madan
The article caught my eye for multiple reasons. I had the good fortune to work for Craig Mundie's company, Alliant Computer Systems (mentioned in the article) quite a few years back, doing what he suggests only a handful of people know how to do, mapping serial applications to parallel computers. It was an interesting experience. These were massive applications running into tens or hundreds of thousand lines of code which had to scale on multiprocessor systems to deliver performance and compete against supercomputers like Cray. The performance delivered could make or break the sale of multimillion dollar systems.
Yes, Craig is a visionary and always has been. To be picked as Bill Gates' successor in this role is acknowledgement enough. But, as he himself points out, having a vision is one thing, predicting when it will happen is another :-) I am sure those of us in the '80s and '90s who thought parallel computing was ready to take off can attest to that.
The current shift to parallel computing is born out of necessity, with single processors reaching capacity limits in terms of heat, power consumption and semiconductor process technology. Craig predicts the arrival of a new "killer app" to take advantage of the coming powerful parallel computing platforms and even a new programming language. He defines his challenge as taking Microsoft past its traditional strengths into new technology areas. This will be interesting to watch, because he has been an advocate of Microsoft's early participation in web based television and other leading edge areas, much before they were fashionable or profitable. It will be like Microsoft taking on some Silicon Valley attributes :-)
This would explain the rate of Microsoft's Silicon Valley acquisitions over the last decade. Dean Takahashi has an interesting take on Microsoft's recent bid for another Valley icon. Speaking of Dean, he has succumbed to the Valley's entrepreneurial lure and has ceased to write for the Mercury News. I am sorry to see him leave because he is one of the best technology columnists I have read and he captures the beat of the Valley so well. But, as always, endings mean new beginnings. I wish him well in his new venture.
Madan
Saturday, January 19, 2008
The changing face of Silicon Valley
Intel announced closing of their last Silicon Valley fab this year. It is as fitting a marker as any for Silicon Valley's transformation, from a focus on silicon to a focus on all emerging technologies. This has been in the making since the late nineties, actually, when the Valley focus shifted from hardware to the Internet and its applications.
Perhaps, the birth of Internet giants like Yahoo, Google, Ebay, Amazon and others, in Silicon Valley gave us an indication of things to come. The Valley has kept up a hectic pace of technology advances in the last fifty years, and though the early days were clearly silicon chip dominated, it has never really been about silicon only. Where other areas like Michigan focused on automobiles and stayed with that focus, the Valley is relentless in its pursuit of change. Intel spokesman, Chuck Mulloy, is right - Silicon Valley is less about silicon and more about technology development.
The latest indication of yet more change headed our way is in the rise of clean tech investments by Silicon Valley VCs to over a $1B/year. Silicon Valley had $1.05B in 43 clean tech investments in 2007 compared to a total of $1.79B for all of California and $3.95B for all of North America. In this case, though the VCs reside here and many of the firms are based in Silicon Valley, not all the money stays in the Valley. But, the numbers clearly show that this is the place where much of the action originates. Though some of the investors worry about a bubble, they are resigned to the fact that they cannot do much to stop it. All they can do is to make sure they make the right bets and come out ahead.
The Valley does not just embrace change, it pursues change, and that is probably the biggest difference between Silicon Valley and the rest of the world.
Madan
Perhaps, the birth of Internet giants like Yahoo, Google, Ebay, Amazon and others, in Silicon Valley gave us an indication of things to come. The Valley has kept up a hectic pace of technology advances in the last fifty years, and though the early days were clearly silicon chip dominated, it has never really been about silicon only. Where other areas like Michigan focused on automobiles and stayed with that focus, the Valley is relentless in its pursuit of change. Intel spokesman, Chuck Mulloy, is right - Silicon Valley is less about silicon and more about technology development.
The latest indication of yet more change headed our way is in the rise of clean tech investments by Silicon Valley VCs to over a $1B/year. Silicon Valley had $1.05B in 43 clean tech investments in 2007 compared to a total of $1.79B for all of California and $3.95B for all of North America. In this case, though the VCs reside here and many of the firms are based in Silicon Valley, not all the money stays in the Valley. But, the numbers clearly show that this is the place where much of the action originates. Though some of the investors worry about a bubble, they are resigned to the fact that they cannot do much to stop it. All they can do is to make sure they make the right bets and come out ahead.
The Valley does not just embrace change, it pursues change, and that is probably the biggest difference between Silicon Valley and the rest of the world.
Madan
Tuesday, January 1, 2008
Looking forward to 2008
Its that time of the year again, a time for new beginnings and the promise of excitement to be. There are plenty of people willing to make predictions about the year to come. In Silicon Valley it always helps when the VCs see good in the year ahead and that seems to be what the Mercury News says. Speaking of the Mercury News, Dean Takahashi quotes Mark Anderson for these predictions for 2008. Then there are Dean's own predictions for Tech Trends for 2008. The Inquirer, of course, has a spicier set of predictions, and as they pithily put it, some of them may even come true. :-)
In any case, I'll go out on a limb and make some of my own predictions :-)
1) 2008 will see Silicon Valley driving clean tech to new heights. Now, this is not so difficult to predict, because there is plenty written about it already, like this recent article. There may even be some more Clean Tech IPOs from the valley. One which would be particularly exciting would be NanoSolar, if it happens. This in turn will drive more VC activity in the space.
2) In the mobile world, we'll see more GPS applications in the cell phone, maybe even in the next gen iPhone. This has been a while in the making and maybe 2008 is the year.
3) Facebook and LinkedIn will both have a big "exit" in VC terms with either a big acquisition or IPO.
I'll limit my predictions to these three for now and measure my accuracy at the end of the year. :-) There will be plenty of other exciting happenings in technology in Silicon Valley and the rest of the world. Yes, there is indeed much to look forward to.
Happy New Year !
Madan
In any case, I'll go out on a limb and make some of my own predictions :-)
1) 2008 will see Silicon Valley driving clean tech to new heights. Now, this is not so difficult to predict, because there is plenty written about it already, like this recent article. There may even be some more Clean Tech IPOs from the valley. One which would be particularly exciting would be NanoSolar, if it happens. This in turn will drive more VC activity in the space.
2) In the mobile world, we'll see more GPS applications in the cell phone, maybe even in the next gen iPhone. This has been a while in the making and maybe 2008 is the year.
3) Facebook and LinkedIn will both have a big "exit" in VC terms with either a big acquisition or IPO.
I'll limit my predictions to these three for now and measure my accuracy at the end of the year. :-) There will be plenty of other exciting happenings in technology in Silicon Valley and the rest of the world. Yes, there is indeed much to look forward to.
Happy New Year !
Madan
Sunday, November 25, 2007
Silicon Valley and Globalization
Today's Mercury News has front page coverage on Silicon Valley's gains from globalization. The article discusses the gains for Cisco, HP and other major multinationals based in Silicon Valley from global growth. The article also discusses the return of VC money flow to the Valley and points out that the valley is at the crossroads of venture capital with money flowing into the valley from all over the world and being invested worldwide.
There are some interesting statistics on the flow of venture capital to and from the rest of the world in the print edition. The charts don't show up in the link above for some reason. Perhaps, this is the most striking change from the '90s, when money flowed into the valley and stayed here. This led to the tech boom and the bust, of course. The Valley has recovered somewhat, but its far from the affluence of 2000. Perhaps, the return to glory for the valley will be in the form of the clean tech boom.
The Valley however, is still very attractive to the rest of the world. One other trend the Mercury News discusses is the ramping of the Valley presence of big tech companies like Nokia and Microsoft who seek to be closer to ideas, partners, investors and customers. As the column says, it appears the world is flat and Silicon Valley is at the center of it and the next wave appears to be clean technology. I will root for that.
Madan
There are some interesting statistics on the flow of venture capital to and from the rest of the world in the print edition. The charts don't show up in the link above for some reason. Perhaps, this is the most striking change from the '90s, when money flowed into the valley and stayed here. This led to the tech boom and the bust, of course. The Valley has recovered somewhat, but its far from the affluence of 2000. Perhaps, the return to glory for the valley will be in the form of the clean tech boom.
The Valley however, is still very attractive to the rest of the world. One other trend the Mercury News discusses is the ramping of the Valley presence of big tech companies like Nokia and Microsoft who seek to be closer to ideas, partners, investors and customers. As the column says, it appears the world is flat and Silicon Valley is at the center of it and the next wave appears to be clean technology. I will root for that.
Madan
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