The following is part of mail i sent to Joi Ito after attended the Digital Garage New Context Conference (it’s a Venture Capital conference, i went because i don’t get out much…). I don’t think it introduces any new or radical ideas; i’m posting it because it seems obvious, reasonable, and rational approach to allocating funds… wonder if it’s happening?
As far as i can tell there have been several ‘waves of innovation’ that the Silicon Valley VCs have funded:
- personal computing, Intel, Apple, AMD, nVidia, etc
- networking infrastructure Cicso, Juniper, ISPs, etc
- distribution channels – Ebay, Amazon, price engines, etc
- media production and distribution – Napster, YouTube, etc
Each of these waves appears to be motivated by the same basic desire: to challenge centralised players in the space, and decentralise / distribute. Mainframe / data centre to PC; circuits to packet switched, fixed supply channels to dynamic networks of suppliers; broadcast TV / newspapers to on-demand, user created content, and so on.
These shifts have been attenuated by the incumbents (and in the case of Japan aided and abetted by the bureaucracy), but the changes that they bring seem to be inevitable as they are forcing competition into, or creating new, markets.
Applying the same logic to Kleiner’s move into ‘eco / green investing’, it appears that they are challenging the energy companies centralised model, and trying to distribute the production of power more widely in the system.
As the VCs have done so well with the ‘decentralise / distribute’ model this makes perfect sense to me. And, if i had to pick a next big thing, this trend would probably be it. Yes, there will be new players / angles in the current fields, but the ‘seeding’ has already happened.
If i was investing in Japan it’d be in companies that could bring small scale geothermal, solar, wind and wave power generation to off-grid applications. Powering data-centres, factories, rural areas, etc. The incumbents will fight the change bitterly, but given the state of Japan’s energy supply, and failing attempts to meet international treaty commitments on emissions, the bureaucracy might be willing to look away for long enough to let it happen!
Discounting the idea that any of this might actually make a difference on a timescale that matters, it does seem roughly correct.