Startup general interestVenture Capital

The incredible pace of change

By February 19, 2010 5 Comments

Now is a tough time to be in business as a startup.  It’s a tough time for everyone pretty much, and internet entrepreneurs are no exception.  Venture capital is tight, exits are difficult and the easy internet plays have all been done.  These are statements I hear a lot, swiftly followed by the observation that to succeed these days you need to be much smarter and work harder than was the case a few years ago.  I agree with most of that although I would add the poor macro climate as a significant contributor along with the maturing of the internet industries.

But my point here is not to be downbeat, but rather optimistic, because this difficult period will soon give way to another wave of innovation – the ever increasing pace of change will see to that.

Consider the chart below for a second.  It is plotted logarithmically, which means that if the line were straight it would be telling us that the amount of compute power you get per $1,000 has been increasing at an exponential rate for over 100 years now, but given that it is curving up the increase is faster than exponential.


The dotted red lines show when that $1,000 will buy you more power than biological equivalents – an interest of Ray Kurzweil, the creator of this chart, who believes that when computers can match human brains we will rapidly approach a point he calls the singularity when the distinction between human and machine intelligence will cease to be important and even exist.  An interesting idea, but one for another day.

I post this chart because it gives me confidence that the wave of innovation that was unleashed by the power of the internet will be followed soon by another wave.  It could be smartphones (as Mary Meeker believes) or it might be consumer driven healthcare (as I’m starting to think), or maybe even robotics.

To bring this down to the level of nuts and bolts, and the original impetus for this post, in Ray Kurzweil’s newsletter email today I read about the following examples of innovations that might herald clusters of startup creation in the next few years:

Think of that – maybe at this time on one Friday night in 2020 you will be sitting at home controlling your fingernail sized iTV Nano with facial gestures as it streams high quality holographic images for your pleasure – while your house robot will be serving you a cold beer and making small talk.

There is plenty of space for multiple new startup waves between here and there – at least that is what I’m betting my career on.

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