Silicon Insider: In Search of the Next Boom

ByABC News
April 9, 2001, 2:52 PM

B U R L I N G A M E, Calif., April 10 -- What if we're looking for the next tech boom in all the wrong places?

As the saying goes, most generals are trained to fight the last war whichis why most predictions made at the beginning of a conflict are completelywrong.

The same, I suspect, is true for all of us awaiting the big technologyturnaround. It'll happen, all right, but not for the reasons we expect,and not led by the companies we know.

In other words, sitting around waiting for Cisco and Yahoo! to come backand lead us out of this financial morass, is an exercise in futility. Whenthose two companies return, they (especially Yahoo!) will be different companies,with different business strategies, managed by different people. Marketleadership will instead belong to a new group of companies we likely haven'teven heard of.

From here on, every hot company you ever knew on Nasdaq willbe an established, comparatively safe, long-term investment. The Prometheanfire will be handed off to a new set of high-risk/high reward companies.

From the Center to the Edge

I first began to understand this about 20 years ago, when I was workingon my first book, a history of Silicon Valley.

Here I was, writing aboutthe great technology firms that had captured the world's imagination in theearly 1960s Hewlett-Packard, Ampex, Memorex, Varian, Watkins-Johnson that werenow either courtly old gentlemen or empty husks. Yet, just a few years before they had been the locus of all the entrepreneurial and investment excitement on the planet.

Those firms had been supplanted in high growth and high excitement by thechip companies Fairchild, Intel, AMD, Motorola, National Semiconductor but even as I wrote, those firms too having been goosed for an extradecade by the invention of the microprocessor were losing their edge.

Now, anew crowd had come alone: scraggly, long-haired old schoolmates of minewho had graduated from locker shockers to telephone hacking and now to personal computers. Apple, Eagle, Sinclair, Commodore, Atari and IBM Boca Raton were now the big deal, making themselves and everyone along their businesschannel (investors, VCs, chip suppliers, content creators, distributors, retailers,etc.) rich and powerful.