Sometimes my best thinking takes place in my garden where in the mindless routines of yard work I am free to meander through any range of topics and ideas. Last Saturday was just such a day.
I wrote recently about VC loss of attraction in Web 2.0 and the thing that was frightening about that thought was the inability to answer the basic question “what’s next?”. The Valley thrives on the new new thing (possibly one of the most poignantly titled books ever) and with every turn of a generation there is an awkward moment where we’re just figuring out where we’ve been but have yet to see where we are going… right now is that moment.
Despite the recriminations about the term “web 2.0″ the fact is that it has come to symbolize a set of characteristics and expectations about service-based computing. It’s also come to refer to the blurring of the line between consumer and business applications, with much of the energy around new business apps being driven by a consumer, or maybe better said “individual”, path to adoption. But these attributes are now part of the ordinary fabric that all companies attempt to embrace.
Bryan Stolle, Agile Software founder currently with Mohr Davidow, says software investing is the new black and solving business problems is where it’s at. Somewhat confusingly, he then goes on to list trends that have little to do with business processes, like SaaS as an appliance and new development environments in the cloud. He broke no new ground and even though I have a lot of respect for Bryan, his op-ed did nothing to convince me that enterprise software investing is on the verge of a renaissance. Enterprise software suffers from a self-inflicted wound as a consequence of an inherently unscalable sales model if you aren’t one of the big bracket companies.
As I survey the landscape of consumer and business focused software and service providers I am struck by how much incrementalism there is at the moment. Something like Twitter is ground breaking in terms of break out adoption, but what about the other 10,000 startups? There are few bold “ah-hah” ideas, lot’s of social this or that, and mostly a bunch of companies hoping to draft on the perceived success of a few gorillas. Will we suffer through yet another “year of the mobile web” or “the semantic web”?
The above is not a criticism, just an observation. There is a lot of capital sloshing around and venture capital will no doubt continue to flow to these companies in the hopes that a few will rise to the top and get acquired. With the melt down in non-VC private equity I am sure that institutional investors will surge back into VC with abandon and this will prop up the Valley for the foreseeable future, but I’m still left with the uncomfortable question of what’s next? When Facebook doesn’t deliver world peace, and FriendFeed fails to be better than sliced bread, what will we do?