Rolfe Winkler | Business Standard News
As they struggle to predict what tech might spark a new boom, investors spread their bets
are always chasing the next big thing. Of late, they are struggling to figure out what that might be.
Nearly a decade has passed since the smartphone sparked a startup gold rush. Silicon Valley
investors have yet to identify the next product that will spawn a similar wave of tech companies
and lucrative returns.
Venture capitalists are spreading their bets across technologies where the path to profits is unclear, including self-driving cars, drones, artificial intelligence, virtual reality, even food.
The drive to find the next big thing, coupled with piles of money that investors need to put to work, could spur foolish bets. Venture firms have raised $34 billion through September—on pace for their biggest year since 2007.
Veteran investor Steve Jurvetson of Draper Fisher Jurvetson said his firm is backing companies
in agriculture, robotics, artificial intelligence and aerospace.
“A ridiculous amount of money will be lost foraging into all these areas,“ he said. “But the greatest opportunities are in those sectors.”
has seen this movie a few times since the 1960s. Its boom-and-bust investing cycles generally begin with about eight years of growth followed by six years of retrenchment, said longtime venture capitalist Arthur Patterson, co-founder of Accel Partners, a sequence some now refer to as the Patterson Cycle.
Faster, cheaper computer chips propelled tech-innovation cycles in the past as profits moved from mainframe computers to personal computers to smartphones and the software products they hatched.
Between each transition, the investor outlook was uncertain, and venture capitalists, whose job is to spot technology shifts, scavenged for the next big thing.
was saved from the doldrums of the 1970s by the PC revolution of the 1980s that propelled such companies
as Intel Corp., Apple and Microsoft. By 1990, as PC sales slowed,venture capitalists
shifted money into lower-risk, low-tech areas, including retail.
Then the World Wide Web resurrected venture capital. VCs invested nearly $200 billion from 1995 to 2000, and more than 1,000 companies
went public, including Amazon.comInc. and Yahoo Inc.
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Source: Venture Capitalists Hunt for the Next Big Thing | Business Standard News