Silicon Valley Nation: The end of Silicon Valley?

I'm sure you feel the same way as David Sacks, CEO of Yammer: Silicon Valley is dead. It's the end of history. All new ideas are actually old and un-monetizable. This is the point in the movie where the grizzled old trainer totters up to the edge of the ring and throws in the towel as his boxer lies bloodied on the canvas. The crowd shuffles off into the darkness.

Or not.

If you missed it, Sacks made the commentary in a Facebook posting picked up by TechCrunch's Alexia Tsotsis. But her take on it and those of many commenters tells you that Sacks is, to say the least, off base.

No less than Marc Andreesen chimed in that creativity is boundless. Amen, Brother Mark.

Sacks raises an interesting point, for sure. But my gripe is that his Silicon Valley is a Silicon Valley of pizza-munching software coders fueling an industry whose startups are now deeply challenged (see Groupon, Facebook, Zynga). The other Silicon Valley--the electronics Silicon Valley and its spiritual cousins around the globe--is humming along, thank you very much. One has grown up; the other is growing up. 

What the Internet/software Silicon Valley is going through today is what the electronics Silicon Valley went through 10-15 years ago: A restructuring. You remember those days... days in which an engineering group inside an established company couldn't get corporate backing for a new idea so they went out on their own, got startup funding, built the widget and then, often, got acquired by their former company and made bank.

Investors cooled on that though because the time-to-bank was long, the capital need was great (based on the structure and expectations of the time). What's more, all that electronics innovation and Moore's Law had created an infrastructure for independent software ideas to thrive, and that struck the fancy of investors interested in greater and faster return on investment.

Today, more than a decade later, hardware startups are bubbling up across the country. They're low-overhead companies, often self-funded, and almost always low-key. They've figured out, through clever use of software tools and supply-chain relationships to nudge their innovations to market in a way that makes economic sense for a mature market. These are companies like Shockwave Impact, Treehouse Labs and Adapteva.

The software industry--at least the industry defined by Yammer, Groupon, Facebook and Zynga--is growing up. Sometime in the ensuing years it'll find a balance between the high-overhead Silicon Valley that Sacks sees dying and the low-overhead, innovation belching of the apps writers.

Make sense? Completely nuts? Or do you believe Silicon Valley in the broadest sense is dead?

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