Tuesday, December 6, 2011

The Steam Engine of the 2010s?

I read a couple of technology-/startup-oriented articles recently. One was yesterday's Forbes article on developeronomics which describes the growing prominence of talented software developers and investment in them in stark terms. The thesis was that talented developers are the best investment in today's low-yield, low-growth environment for both corporations and individuals, regardless of industry, harkening back to the claim that "every company is a software company." The example was if you are a baker, you either have tech of your own or are at the mercy of Yelp. There are only three kinds of people: developers, those who invest in them, and everyone else. That point is connected to the main idea of the article, that developers are starting to understand their economic value so if one meets a developer who isn't tied down, one should invest early (as early as 14 according to the article), and invest heavily, more so for talented teams.

The other article was a TechCrunch one which called the "internet" the modern steam engine in terms of enabling a flurry of new startups to take sprout these last few years. The author did put some numbers to this drawn mainly from CrunchBase. From my anecdotal experience, it certainly seems that startups are sprouting left and right. From Y-Combinator's experience, it also seems that the number of ideas have multiplied tremendously. I am quite cautious about the average quality of ideas as everyone jumps onto the bandwagon. The problem of product fit still remains paramount. There may be a far larger audience now, but the real growth in Internet use lies overseas. With all the noise that comes with an incredible amount of startups, what is the best filter? The social web people believe that mining social is the way to go, but with lower cost comes more noise. I think the traditional metric of liquid market value still applies. It has just been watered down due to funding round inflation. When you boil it down, the steam engine of the 2010s is that stateless protocol HTTP. Curious, isn't it?

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