Silicon Valley is not really about tech anymore

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Silicon Valley is not really about tech anymore

There is NO silicon left in Silicon Valley. Most of the smart folks left long time ago. Now it should be referred to as Wall Street West. Only Banksters remain in silicon valley (i mean wall street west). Much of what gets called tech is communications, media, publishing and marketing, simply because digital communication is replacing print and Main Street. Most “tech startups” tend to be businesses that intelligently apply existing, off-the-shelf technology platforms to do a dramatically better job addressing a common issue faced by a targeted customer set.

See: http://www.firstworldproblems.biz/

In America, people think building websites, designing apps and moving money electronically is high-tech, and they think Google, Snapchat and PayPal are the pinnacle advanced technology. Meanwhile, they think oil/gas extraction is a “low-tech” business. VCs usually don’t really care about a founders vision (at least not more than whether or not it’s a good enough idea to be profitable) all they care about is getting paid. That’s just how the venture capital business works. The venture partner is working for his limited partners, and they think much like traditional private equity investors or just commercial bankers. Limited partners only want their venture partners to make financial investments in measurable financial assets. The limited partners would greatly prefer there to be audited financial statements, but in a pinch they will let their venture partners settle for a surrogate measure, ‘traction’, from, say, Comscore or some such. It’s a bittersweet relationship, and I personally would rather not go down that road.

For a startup based on software, computing, and the Internet, the path to the coveted ‘traction’ is just one or a few guys living cheaply and typing quickly. Then, with such low ‘burn rate’, once you get the traction, and especially if that traction is growing very rapidly, you stand to profit quite nicely. Thus no longer in great need of equity investment with the usual term sheet that subordinate yourself to a Board controlled by venture partners.

Silicon Valley

Silicon Valley is so expensive that you need institutional capital to live there... so implicitly any solution would not come from SV since VCs have short time horizons and need billion-dollar wins: two things impossible with targeting SMB. It's a real issue, but no more real that lots of other good things that don't get funded. Ephemeral dick pics, however, can become billion-dollar businesses, so that's where the money goes.

The problem facing many startups is the need to scale; selling to local businesses takes too much work. You’re much better off selling 1,000 licenses of your SaaS product to a larger company than trying to sell those licenses two seats at a time to 500 different companies. Whether you’re selling to consumers or businesses, it’s much easier to convince customers when you’re offering an incremental, iterative improvement to an existing state of affairs rather than trying to create an entirely new behavior. For consumer companies like Lyft, Shyp, Luxe and many others, taking an established transaction and improving the experience is the way to go.

Washing dishes in my mom’s restaurant as a kid, I realized that when you run your own business you’re always worried about 50 different things at any given time. As a result, the way to support local businesses is not by cutting a few costs. Rather, it comes from creating an entirely new business line and growing their sales, all without adding a 51st hassle for the business-owner to worry about.

I agree

I noticed that also. Ever since the first tech bubble bust in early 2000s, they just make apps or redo the same programs/routine over and over again. The only objective seems to be to make something that can be an IPO and dumped off onto the retail stock market.

Google or Apple could do all kinds of things in new technologies, but what do we get? Better ways to show more ads, or they make the phone a little bigger/smaller; and hoard all kinds of cash 'because they need it', even though they have one of the largest piles of cash in the history of the planet and using it to display ads or make the phone a different size.

That is right on the money.

That is right on the money. Whenever I visit a startup incubator or conference, I discover that 99% of the apps are of the mindless "it's popular because it's popular" type.

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