Zuckerberg and the unreality of valley thinking

Bill Gates laid into Mark Zuckerberg's vision of internet access being the most important thing in solving the world's ills and another article at The Register compared Silicon Valley to 'Sheldonville' which I really agree with.  At the heart of lots of these 'visions' is an insular view of technology within Silicon Valley.

How insular?  Lets say Blue Ridge Mountains style insular.  The normal vision is that valley thinking will change the world if only people would just use that technology.  We saw it in the .com bust with companies that preached a huge vision on how they would replace the normal bricks and mortar and how everything would be changed and replaced....

And guess what?  It takes a hell of a lot longer to change culture than a VC/IPO cycle would like the end result is that the companies fail.  The VC/IPO money does however distort the market, look at Amazon's 'profit' statements against a food retailer - Wholefoods - and a failing retailer - Best Buy.

	Revenue	Profit
Amazon	$21.27bn	$97m
Wholefoods	$2.2bn	$113m
Best Buy	$16.7bn	$1.9bn

Now I know that Amazon aren't strictly a valley company but its the same sort of mentality, I'll come to some great examples of valley mentality in a second.  So Amazon is a great company doing some really cool and innovative things but thanks to their special technical sauce they are allowed to significantly undercut their competition because they don't need to make as much profit to keep shareholders happy.

That is a big advantage and one that distorts markets.

Now how about some other valley thinking examples?

• Jonathan Schwartz and the over optimism of 'Open Source will defeat all' and pitching to financial analysts about the number of downloads the company had is a good one.  It ultimately doomed Sun to acquisition and really was a great example of valley thinking.

• The startup I met whose strategy was 'rip out SAP' in order to use their software.
• The integration of JAX-WS and Javascript into Java
• The whole .com 'boom' based on 'visitor' numbers
• The whole social media 'boom' based on 'user' numbers
• Hell every single startup whose philosophy is that companies will rip out working technology to replace it with their new shiny and unproven technology

The valley often does come up with good stuff, but does valley thinking overall make the world a better place?  Sure the valley came up with Java.... and then the valley screwed it up.  The valley came up with REST... oh brilliant our lives are so much better.

My point of this rant is that software investment is driven by the thinking in a short stretch of land, some of it can be good, some of it can be bad, but when you look at companies like IBM, SAP, ARM, etc its quite amazing just how positive an impact they've had on technology, and arguably the world, without being driven at any stage by massive hype cycles.  I'd argue its exactly because these folks are mainly out of the valley that the often deliver practical innovations and improvements rather than impractical visions.

Zuckerberg's 'vision' for helping the world is just another example of that and Bill Gates is spot on about what is really important.  The valley is a great place, its a buzzing place, but its as much to do with the majority of technology decisions as Fantasy Football has to do with the NFL, sure they are related but one of them is doing real work, even if lots of money is going into the former, its the latter that tends to focus on profits.