Silicon Valley Is Thriving In A Great Bubble Of Innovation

Silicon Valley is under the microscope from the folks trying to figure out what is happening. That is why I’m here ..

First: The Zynga Nytimes article Zynga’s Tough Culture Risks a Talent Drain
http://dealbook.nytimes.com/2011/11/27/zyngas-tough-culture-risks-a-talent-drain/

In dozens of e-mails to a companywide list, frustrated workers complained about the long hours and stressful deadline periods.

As the discord increases, the situation may jeopardize the company’s ability to retain top talent at a time when Silicon Valley start-ups are fiercely jockeying for the best executives and engineers. It could also hamper deal-making, a critical growth engine for Zynga, which has spent about $119 million on acquisitions in the last two years.

“Zynga should be an example of entrepreneurship at its best,” said Roger McNamee, a co-founder of the venture capital firm Elevation Partners. “Instead it’s going to be a Harvard Business School case study on founder overreach — this will be a cautionary tale.”

This story is about corporate culture – nothing more nothing less. This is about a very young Zynga trying to build a durable company going mach 100. The people who are complaining are making millions. Talent will go to where they can make money and thrive in a great corporate culture.

Marc Pincus is rough around the edges and is building some discipline into his organization (like my days at HP). Problem is that his company is growing like a freaking rocketship and is only a few years old.

Building the corporate infrastructure takes time and a dedicated culture. He has been around the block and is going after those folks we call “vest and rest” – meaning hang out to get the stock package then become a millionaire. If anything overt the past ten years the motives of “vest and rest” are easy to spot. That’s my opinion on the unhappy “rich” campers.

Zynga is building a company and creating wealth for many including employees.

Although I have a different angle on it (see above) Mike Arrington’s other post this morning really sums up how I feel about the whining.

Second: Arrington calling the Nytimes article a hit piece by EA
http://uncrunched.com/2011/11/27/the-evil-zynga/

Rival Electronic Arts’ fingerprints are all over this story. There are two quotes from EA executives:

And there’s also a quote by famous venture capitalist Roger McNamee saying Zynga will end up a cautionary tale (McNamee, with all due respect, is the man who predicted Palm would kill the iPhone).

The fact that McNamee’s former founding partner at Elevation Partners, John Riccitiello, is now the CEO of EA, isn’t mentioned. Nor is the fact that Elevation Partners tried at one point to invest in Zynga.

And Zynga, in the IPO quiet period, can’t do a damn thing to fight back.

All’s fair in love and war, and with the hundred plus former EA employees and executives now at Zynga, I’m not surprised they’re fighting back. But the New York Times should have known better than to become a tool for EA. That article just smells bad.

Complete bullshit. EA isn’t planting these stories Zynga earned it on its own with the stock option snafu. I thought the NYtimes was objective in this relative to an EA bias.

Third: Union Square Ventures post on What Comes Next
http://www.usv.com/2011/11/what-comes-next.php
Now is a great time to be an internet entrepreneur. While much of the global economy sputters, tech companies post growth numbers other industries haven’t seen in years. Their success hasn’t gone unnoticed, and the pace of tech-company creation has quickened.

There’s more than me-tooism going on. It is, for example, easier to start a tech company than ever before – it’s easier to access startup capital, procure basic infrastructure and tools at lower prices, find and cultivate mentors, and join an accelerator program.

This post is highlighting the view that the market is booming not bubbling. Yes there are too many me-too ideas but in Silicon Valley it’s thriving at all the right levels and it’s bad at all the right levels. In my circles of venture capitalists and entrepreneurs all the signals of innovation are strong. There is real technology being developed around business and consumer. The bad signals are coming from the flood of tourist venture capitalists and entrepreneurs – the massive funding of me-too deals and me-too angel funds is confusing the market. The spraying and praying investing will be gone in 18 months when the dozen or so “micro” or super angles run out of money.

The real metric is how many companies are being build and how long they can be viable (sustained).

There is a bubble happening, but the machinery of Silicon Valley is pumping strong.

About John Furrier

John Furrier is founder, co-CEO, and Editor-in-Chief of SiliconANGLE, a new media company covering the intersection of computer science and social science. Furrier is also the co-founder and CEO of CrowdChat a social media platform for large-scale group conversations over hashtags. In addition to SiliconANGLE John runs Broadband Developments a private incubator and investment firm for creating new startups. Furrier lives in Palo Alto, California with his wife and four children.

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