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What’s the Big Idea?

Silicon Valley's swashbuckling pioneers have given way to legions of tinkerers. One lifetime tech fanatic issues a call for a return to grand ambition.

Author Mark McClusky

ILLUSTRATION BY GRACIA LAM

BACK IN LATE 1982, Steve Jobs arranged a meeting with John Sculley, then CEO of Pepsi-Cola, and set about trying to lure him to Apple. This was not an easy sell—Apple was a company with lots of potential but nowhere near Pepsi’s clout—and Sculley was suitably reluctant to make the move. Until, that is, Jobs made his final pitch: “Do you want to spend the rest of your life selling sugared water, or do you want a chance to change the world?” Sculley took the job.

Three decades on, this sort of epic ambition is in increasingly short supply in Silicon Valley. Where the early days of the digital revolution were marked by larger-than-life figures touting equally outsize ideas, the Valley today is riddled with niche startups nibbling at the extremities of Apple, Facebook, Google and the other big players. Innovation has become incremental, a matter of accessorizing rather than breaking new ground.

If you don’t believe me, go to TechCrunch Disrupt or any other event claiming to showcase the digital world’s best and brightest. These gatherings are full of zippy demonstrations revealing the stunning impact a particular widget will have on cloud computing, or the potentialities of Big Data in the mobile-social-networking-gaming sphere. And, of course, everything is destined to go viral—so much so that there are moments when you feel you’re attending the annual meeting of the CDC.

For all the gee-whiz, revolutionary language used at these events, though, they’re really little more than trade shows aimed at catching the attention of deep-pocketed suitors. And in this regard they’re a roaring success. Venture capitalists plowed $12 billion into Silicon Valley in 2011, up from $1.8 billion in 1995. Plus, more than half of this funding—$6.7 billion—went to software developers, up 38 percent from the previous year, which can only mean that those who pitched their tent in the field of hardware development are losing ground.

This trend has coincided with another significant shift in the economics of the industry. The old way to get rich in the Valley was to build a company, have a blockbuster IPO and wait for the billions to stack up. But this option has become less appealing, particularly since Facebook’s flop last year, which followed a smaller-scale fizzle by social games developer Zynga. The real action these days is in acquisition: developing a smaller-bore product and waiting for one of the big fish to snap it up.

While making a lot of people very wealthy, this approach can’t possibly be sustainable. Sooner or later we’ll have more add-ons than things that need to be added on to, and more solutions to small problems than there are small problems.

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