Facebook’s mental model starts with the product and they see solutions emerging from the underlying execution (which includes technology). In the end, the product is valuable not just because of superior technology but because of what it captures (e.g. the social graph). This is very subtle but it made more sense the more we saw.
3. In a Theoretical World Championship Bowl, Now, It’s Facebook with a #1 Ranking vs. Google with a #2 Ranking. Surprisingly people see the future (with good reason) as being Facebook. The knowledge of the user and his/her preferences (the social graph) is what is going to be the most valuable in the future. Having uncustomized searches will become more and more a commodity or at least of significantly less value. Customization comes from the social graph. Besides, people are spending more time with Facebook than Google these days. Where is Microsoft, you ask? Falling in the rankings and definitely less relevant. The interesting thing about Microsoft, however, is that they have a consistent flow of cash that will be around for a long time; Google on the other hand could see its cash flow move away much faster because the switching costs are much lower. IBM (note: I am a former IBM person from 20 years ago, when they dominated the industry so much that the Justice Department filed antitrust suits) seems to have either shut down its program or moved to Division III and will not be getting even consideration for the bowl game. This just shows how quickly things change in this industry. Apple, see below.
4. The Future Is Mobile, but Will It Be Android Dominated? Smartphone adoption is now outpacing PC adoption. The iPhone and iPad (despite its limitations) are seeing market adoptions rates that are unfathomable when viewed historically. That being said, the surging popularity of Android (funded by Google’s deep pockets) could overtake even the rapid rise of the iPhone. If Apple is not careful, what happened in the PC operating system market could repeat itself with the mobile world: Apple gets points and some devotees for being artistic and the pioneer but someone else runs off with the majority market share because their system is open and runs on multiple platforms. I know Apple has the huge market cap today, but trends are usually more important than absolute position. Oh by the way, isn’t it amazing how mobile innovation used to be most associated with Korea, Scandanvia, Japan and else where but now the center of gravity for innovation seems to have come back to the US.
5. Clean Energy Investing and Entrepreneurship is Much More Rational. The crazy “greentech”/”cleantech”/”enertech” movement has settled down now with a chastened and much wiser approach from investor and entrepreneurs. This was an obvious evolution of the market but a lot of the “save the world” emotion has been worked out and people realize that sustainable environmental solutions require sustainable business solutions. Sustainable businesses cannot be build on guilt relief or hype surfing, but require solid fundamentals and calculations verified in the market place.
6. Less Self-Absorption. Maybe this is a kind of variation of Heisenberg’s Principle whereby when you measure something, you change the outcome. But Silicon Valley seemed much less absorbed with itself this year—i.e., I saw more recognition that there was an important world beyond Silicon Valley. I may have altered the data we saw because I quickly express a disdain for this East Coast vs. West Coast rhetoric as soon as I think it is starting. Neither place has a monopoly on great entrepreneurs, entrepreneurship, or venture capital. I also think location is becoming less important as
