Capital Irony

The New York Times has an article reviewing a book which basically worries that Silicon Valley “innovation” is hollowing, consisting mainly of me-too companies with low barriers to entry being funded by cautious, herd-chasing VC cash and bought by large technology companies flush with dumb public stock market funds that have lost the ability to generate internal innovation. The first irony is that the book is written by a person who profitted handsomely when her streaming video startup (“funded in 6 minutes“!) was bought by Cisco in the late 1990s using a no-money-down dilutive stock swap at the tail end of the streaming multimedia mini-bubble.

Part of the reason, she said, was that Cisco and other fast-growing big companies started acquiring start-ups with innovative technologies instead of developing new ideas internally.

The second irony? Right under the article, the first entry in the “Related” posts is Cisco Buys E-Mail and Calendaring Start-Up for $215 Million. Yes, in the middle of 2008, Cisco can still piss away $215m buying a three-year-old open-source, Linux-based email/calendar startup. In 2008, email/calendaring must be such a difficult, virtually intractable problem that it requires outside solutions.

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