Re: Silicon Valley discovers that the deal has been altered.

Further to Moe’s diary on this subject….

I’ve been dealing (heavily and directly) with “Silicon Valley” for nearly two decades now – that allowed me to see the tail-end of the salad days of the place…. followed by a long slide into (grossly over-priced) enfeeblement and irrelevance that events like this are now making more visibly-apparent.

There was a time when Silicon Valley was solid and sober – they had a wonderful operating model in which ideas, opportunities, finance, and expertise all came together in a crucible that created incredible amounts of innovation and economic value, for what were minor amounts of resources.

Unfortunately, the ethos of Silicon Valley was destroyed (sadly, it appears, for good) by the dot-com bubble.

Tangibly, this transformed Silicon Valley from a realm of sober business-building into a flamboyant “get rich quick” scheme. This should have been undone by the collapse of the “tech bubble” (dot-com bubble) back in 2000; however, the psychological damage had been done. Instead of returning to its roots, the reaction to this implosion was not that the dot-com bubble had been a fluke – but that instead it represented the new reality – and thus the same “get rich quick” dot-com game would be back again…. soon…. some day…. really….

Strangely, this has transformed Silicon Valley into a cargo cult. If anyone isn’t familiar with that term and its origins, I leave it as an exercise to search around and see why I say that.

I long ago figured out that Silicon Valley is overloaded with effete screw-ups who still think very highly of themselves. There are plenty of fools in the Valley, and they’ve been played for that by politicians before.

Back in 1992, Bill Clinton was supposedly young and hip (vs. that old low-tech geezer GHWB) and conned them into pushing him – simply on the notion that by being young and hip, he’d “get” tech industry issues (vs. “old economy” emphasis) and would push “the new” forward. Somewhat strangely, President Clinton did break with much of the traditional anti-business fixations of his own party – and when that was combined with a divided government, a benign Congress, and no major troubles on the world stage, the environment for the Valley wasn’t that bad.

However, some early supporters quickly realized that they had been “played” by the Clinton/Gore team – “played” for Valley support so as to appear to be representative of a turnover of generations in leadership to those conversant with what was then called “the new economy.” Larry Ellison wised up quickly and backed away; asked after the 2000 election what he thought of Al Gore, all he said was, “Thank God for the butterfly ballot.”

The same fools got conned again this time in the same way. I believe that Mr. Malone published that piece somewhere else (at least in part) a few weeks back, and I think that what I say here will at least indirectly flow from that earlier piece. The Obama team played Silicon Valley in the same way, and conned them into believing that they (Team O) would be hip to the new tech world – unlike the oilmen who supposedly ran Washington in an old-economy way for the prior eight years. Team Obama would usher in a new era of focus on nanotechnology, and biotechnology, and bandwidth, and “science,” and all manner of nouveau things; instead, Team Obama has been putting all its interests into old, decrepit, and often heavily-unionized sectors of the economy – most notably the automotive industry, but also the eastern (and often western-hostile) money-center financial institutions.

However, one caveat needs to be mentioned here. In recent years, Silicon Valley has bought lock, stock, and barrel into this meaningless, mindless “green” nonsense (which I’ll discuss more fully in my ICCC Part III post, which should appear a little later this afternoon). The legendary John Doerr is acting like he’s been getting estrogen shots; when such a previously successful and accomplished man starts to act like he could get a second job as a wet nurse, it’s probably time for him to hang it up – or to at least take a long vacation (perhaps even at a remote monastery) to get his bearings back. But in the meantime, he has even brought in Al Gore as a full partner in Kleiner, Perkins. Hmm. Why?

The bottom line now in Silicon Valley is that a lot of the big-time money players have sunk boatloads of cash into “green” investments – and without government mandates and subsidies those are going to effectively be worthless. (WITH mandates and subsidies, they might pay off quite well.)

Tragically, Silicon Valley is now a very pale and decrepit shadow of what it once was – it is no longer about innovation, creating new winning businesses (and industries), and using scarce resources to enormous effect.

This is why I keep banging-on about the dearth (and death) of innovation – and the consequences that will (and are) flowing from that. We need to recreate “Silicon Valley” with new people – and likely even a new location.