What’s the next big thing to drive the Silicon Valley innovation engine? Don’t count on green tech anytime soon, at least according to two prominent investors here during a panel discussion focused on “Silicon Valley in the New Millennium.”
“I expect a lot of disappointment. Green tech is over-hyped and over-funded,” said Norm Fogelsong, a general partner with Institutional Venture Partners. And it’s not like IVP, an early investor in Twitter, isn’t used to taking some risk.
Fogelson said he’s received about 50 solar proposals looking for investment but said he’s waiting for one to show it has at least $10 million in revenue, a pittance by tech investor standards.
Fred Wang, a general partner at Trinity Ventures, said he’s bullish on Silicon Valley’s prospects.
“I think Silicon Valley will be a source of innovation and at the leading edge for years to come,” Wang said during the panel Thursday at the AlwaysOn Summit.
But he agreed with some of Fogelson’s comments on green tech. “The hype preceded reality,” Wang said. “There are some fundamentally new technologies that have come out of this space, like renewables and how we use petroleum products. It even affects enterprise software.”
But Wang said breakthroughs in new materials science and chemistry aren’t clear. “You don’t know if it’s going to take six months or six years. It feels a lot like biotech investing.”
Which is not to say Wang isn’t interested in long-term investments. He said most people tend to overestimate the impact of new technology in a two-year time frame and underestimate how well it might do over a ten-year period.
“We’re in the social media space where it’s the very early innings,” said Wang. “We’re not near the end of the innovation curve we look pretty broadly across digital media and internet services.”
Fogelson admitted it was a little hard for his firm to “get” Twitter’s value initially. “It looked like it gave you friend to friend text messaging, but as we talked more about it, we saw it as a very real time community … a new form of journalism.” He mentioned how Twitterers were able to alert people in India to stay away from certain streets during a terrorist attack.
Markets and disruption
Dan Scheinman, senior vice president and general manager of Cisco’s Media Solutions Group, discussed how the networking giant is expanding its product portfolio. “We’ve always been about markets and disruptions,” said Scheinman.
Cisco is banking on one of those disruptive opportunities being video. In March, Cisco (NASDAQ: CSCO) bought Pure Digital Technologies, makers of the Flip Video line of portable video cameras, in a $590 million stock deal.
Scheinman took note of the iPhone’s success, but said there is plenty of opportunity in mobile.
“Content should lead the device. Someone has to figure out the content consumers want and go from there. “We believe mobile video is part of the answer,” said Scheinman. “Our bet is increasingly around video tied to the network and we’ll see what we can do.”
Adobe’s Chief Software Architect, Tom Malloy, said the company is looking deliver content from the various social networks and other sources to a wide variety of devices.
“What you really want is to access all that content on different screen sizes that offer different ways for consumers to interact,” said Malloy. “And do it in a way that makes it efficient for publishers who perhaps don’t even know what devices their content is going to. It’s a really tough problem.”