Silicon Valley, The Financial Crisis and the Call to Innovate!

Posted on October 14, 2008 
Filed Under Innovation

Here is a radio show really worth listening to.  NPR’s Michale Krasny interviewed a panel of Silicon Valley people last week to discuss the impact of the credit crisis on Silicon Valley.  His guests on the panel were:

I highly recommend listening to the talk show ==> Click here

For those too busy, here are some of the more insightful comments below.  As someone who is part of the Silicon Valley ecosystem, and someone whose job is to drive Silicon Valley style innovation in a large 100 year old company, I do wholeheartedly agree with the panelist.  That those of us who are practitioners of Innovation should heed the calling… that it’s up to us to LEAD and help our companies INNOVATE OUT of this downturn.

Sarah:
- Downturn will hit VC and Public Companies hard
- Some say 80% of emerging business will go under, Sarah thinks, U of Maryland study which says 45% is closer to reality
- Biggest hit will be the public companies.. layoffs, etc., but smaller companies will feel it too
- Innovation always comes back in the Valley. Typical Valley cycle is 2 years

Carl:
- this is not a innovation or creativity crisis, we will weather this storm
- $2.6B in last year in Green and Clean tech.  40% of that went to Silicon Valley.
- Silicon Valley has culture of Green.
- Silicon Valley culture is unique in the world - motivated by Big Problems… Financial Crisis… Climate Change, etc….
- Tougher time for M&A… problem to finance and close deals
- Large tech companies have large cash reserve, but their customers do not
- Hopefully the Government plans work
- Dot.bomb: 212K jobs evaporated
- Call to VC: put money where our mouth is, keep investing…

Ion:
- Bullish, and broader than Green Tech
- Financial Crisis will almost certainly get under control
- Concern is more about the recession and the length of it
- Valley would certain feel the impact
- The Valley should feel the responsibility to power America out of trouble but innovating solutions for climate control, reliance on foreign oil, etc.
- Create more Green Jobs

Other interesting comments:

- Optimistic in the long run.  In the meanwhile, some babies would get thrown out with the bath water.
- Segment will be particularly hard hit:

1. Enterprise Software, including SAAS (especially those with Financials as customers)
2. Advertising (not as much Google, Yahoo as compared to others)
- Extraordinary opportunities for small agile startups that do not require tons of cash. i.e. Young startups with only a couple of millions, tens of employees, and have ideas and revenue models which can disrupt the industry.

- Barrier of entry for software business has gone WAY WAY down because of open source, and cloud computing platform like Amazon EC2.

- Companies with high cash burns and low revenue will be in trouble.

- Companies that invest in these downturns will be the strong ones coming out.

- More VCs will become angels.

- Great companies with great bus models will get funded.

- Bio-tech will be difficult because of capital intensive and long term

- Wallstreet is quarterly focus, as will Public Companies.  The Ventures and Private Capital will step in and keep driving innovation and big changes in the future.

Comments

One Response to “Silicon Valley, The Financial Crisis and the Call to Innovate!”

  1. learn to play chess online on January 8th, 2009 11:08 pm

    At the time of financial crises we need to come together united and try to resove the prroblems which are responsible to such a hazard. We need to overcome it. IT is meant to bring calm to the population and markets and display government strength and stability.

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