I don’t think it’s as bleak as the article states. They’re using metrics based on VC funding, but a trend we have seen in the past 10 yrs or so is that family office investors and high net worth individuals are investing less and less into venture funds and are instead investing directly into startups. You now see many broker/dealers and ‘fundless VCs’ putting a lot of capital to work deal by deal. These wealthy individuals grew tired of mediocre returns over long periods of time and paying the management fees/carry to VCs while having no say as to where the money is invested.

I’ve been in/out of tech startups for the past 25 yrs and the startup where I currently work is just closing its second round of funding with no VCs at all - entirely high net worth individuals and family offices.

I don't think the "end of the startup era" means innovation is going to stop. But there are a couple of realities.

The number of IPOs is down significantly and when the IPOs do come, they are coming much later (after private equity took the biggest returns). For example, look at the market cap of FB when it IPOed. Look how big AirB&B is estimated to be and they still haven't IPOed. When a company IPOs with a $40 billion market cap it is hard to think of it as a startup.

With the kind of cash and cash flows the big four have, they can effectively buy almost any truly startup business they want to. Unless the next huge innovative threat refuses to sell, they are just going to get absorbed by the borg. So there is still innovation, but it just gets rolled into Apple or Google, it is very hard for their to be the next Apple or Google in this landscape.

They you have the megalomaniac personalities, at least for FB, Google and Amazon, the founders are still actively involved and in some ways seem more bent on world domination that absolute profit. My point being is that they investing a lot of money into internal research and product development, so they have a good chance of developing the next big think in-house, before some startup does.

The argument against all of this is that most of these businesses are not very capital intensive. Most of the capital is intellectual, so you don't need billions to develop the next great idea and as long as you are committed to not settle for a few billion dollars when the big four come knocking, you have a chance to become the next titan.

The other argument is that one or all of the big four are going to get dismantled at some point for anti-trust reasons. The main reason I am skeptical of Amazon is that their business seems to be destroying the retail sector, but they won't make the insane profits needed to justify their share price until retail is destroyed. However, if they have a monopoly, they are done, they are getting broken up. This to me is the fatal flaw in their business model and why I would never own the stock. Now take Apple for example, they only have about 15% of the world smartphone market. Yes, they only have a 15% market share and the company is worth $800 billion with $200 billion in cash. It is totally reasonably that they could get to 20-25% (no risk of a monopoly) and they would be a $2 trillion company.

biotech seems to still be a motherlode of unrealized opportunities

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They constantly try to escape from the darkness outside and within
Dreaming of systems so perfect that no one will need to be good T.S. Eliot

When the time comes that our genetic code is not only unlocked but can be modified there will be some serious $$$$$ to make. But how many new jobs will that create and more importantly how quickly? To me that entire field is about pharma making large profits.

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"The great pleasure in life is doing what people say you cannot do."

Malcom Gladwell wrote a book that pointed to the circumstances that lead to a lot of people's success. Outliers.....that was the name of it. It pointed out how many of the richest people in the world came from either oil, railroads, or IT (I'm over simplifying this) and that all of them lived at the right time.

Oil barons lived when oil was becoming a thing.
Same for rail road barons.
Not coincidentally Bill Gates and Steve Jobs are about the same age, which was the age of being in their early 20s when the first semi-affordable home computers came out.

My memory is a little fuzzy on the whole thing, but the bottom line is its going to be much harder to invent Face Book when Face Book has already been invented.

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-----------------------------Baron Von Speedypants
-----------------------------RunTraining articles here:
http://forum.slowtwitch.com/...runtraining;#1612485

Over the next 20 years you will see the continued growth of disruptive technologies. Surgeries will be performed by robots, long haul trucking will never have a driver and multiple trucks will be attached together, one person will run a McDonalds, grocery stores will be automated to stock shelves and check out. As you shop you will scan and never stand in line again. Productivity through software and automation will make most of our lives easier. We are just at the tip of the iceberg on the technology revolution.

As for high net worth individuals doing direct investment in startups, my experience is they tend to invest in what they know and tend to over bet on the investment based on their inherent biases. I believe most high net worth individuals cannot compete against Sandhill road for access to the most attractive deals. The top VC firms are the winners for a reason.

I have friends doing start ups. I think they are just going back to the garages and studio apartments where they probably belong.

They got so big everyone was getting burned by them. Pushing a ton of money to early without a proven idea and bringing too many controlling interests in. It was so rediculous there were multiple tv series poking fun at it.

In general tech has sold it’s soul for money. It used to be how cool of a widget can we make and now it’s about what can we make that will make us rich. I work in tech and now it just seems like how can we keep the ATM printing money rather than really caring about what we make. It’s a huge dynamic change in the 20 years. We now get the smart kids who want to get rich rather than the smart kids who want to make cool stuff (well we still get some of those - but it seems like more and more of the former are going into tech when they would have gone to banking before).

I joke with my friends that we need to find an industry as uncool as tech was in the 90s so we can get back to innovating. I’m starting to think agriculture might be it.

Agriculture is one of the industries that has been heavily invested in by VC firms and the mom and pop farm is gone. From land acquisitions, genetics, to smart tractors.

Give me a better idea then! The coding for drones checking fields to suss where more water is needed sounded really interesting to me. I just want to get lost in something I care about again.

//As for high net worth individuals doing direct investment in startups, my experience is they tend to invest in what they know and tend to over bet on the investment based on their inherent biases. I believe most high net worth individuals cannot compete against Sandhill road for access to the most attractive deals. The top VC firms are the winners for a reason. //

Often you'll see the high net worth folks investing in seed or very early stages then the VCs come in after - it's very symbiotic. And VCs are definitely more risk averse now that the public market is much harder to pursue. Back in the day (you know, 20 yrs ago) the VCs needed a 1 in 10 success to be really successful as companies could IPO or be acquired, AND they wanted greater that 10x returns across the entire fund. Nowadays, many are reluctant to invest in VC funds as the returns are spread over a longer period of time. A high net worth/family office investor is happy with a 4x or 5x return in a few years whereas the traditional VC would not be OR a VC is more likely to push for a liquidity event for a portfolio company based on overall portfolio performance where the private investor has no such pressures.

As I mentioned, the company I'm with is just closing its second round of funding all through wealthy individuals and family offices other that one large corporation who has invested. My previous startups were all funded by the SandHill Road crowd (Crosspoint, DFJ, Ignition, etc) so this has been quite interesting as I watch this company pursue funding outside the traditional VC crowd. What I find is that many are doing the same - though it seems at some point in the company path a traditional VC or PE firm gets involved. Anyone who is a member of a local angel network sees a lot of startup deals prior to VC involvement. I see maybe 50 per year.

One cool thing in tech is the availability of Amazon / Azure, etc providing very low cost dev environments which allows software startups to be very capital efficient. Capital efficiency was not part of the startup culture in the 80s and 90s as so much money was available and the IPO market was so aggressive. Not so much today.

This stuff is cyclical.
Startups might not be THE THING for the next couple of years.
But they are not going away.

On the contrary, we are probably heading to a future where every little itty bitty piece of equity and debt are publicly traded.

Here is the issue I see with all the ideas above; what percentage of the population will be able to afford/take advantage of new technologies if they don't have jobs paying an above living wage? I look at the future we are creating and I see the world becoming more of an oligarchy then a democracy. Who are the consumers going to be if you have two classes and one of them barely survives? Unless you tell me in the future "money" will be a different concept then what we have today... I think we need to have plans that take into account the changing economy and then provide pointed educational paths, perhaps even with incentives, so that more people can participate and profit from the coming changes. Otherwise, there will going be a lot more unemployed in 10 years here then there are today and you, the remaining working class, will be paying more to subsidize them.

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"The great pleasure in life is doing what people say you cannot do."

That technology already exists. A tractor goes over a field and it generates a heat map on yield and know where and how much fertilizer is required. Sensors within the field monitor water need and plant health. Tractors continue improve allowing for deeper tilling and high yields and precision within the field. Tractors have sensors to monitor everything from fuel to maintenance. Grain trucks next to a combine run by themselves using sensors to monitor location and when they are full, allowing the second person to drive to the silo while the combine is filling another truck. Crop genetics and pesticides continue to improve.

The Amish have some of the best soil in the world but their yield per acre is no where near as high as farms in the midwest because they can rip as deep with a horse. Search growth in corn yield and you'll see that it has grown dramatically per acre over the past 20 years through technology.

https://agribotix.com

Is a drone company that does this.

A lot of the disruptive technologies are not producing jobs. Amazon is destroying them, Airbnb is putting hoteliers out of work, as are the taxi platforms putting taxi drivers out. . New agriculture could be big I was reading the other day about a guy who is putting watermelons on squash rootstock and getting much better yields. If you could get plants to make stuff that we make by manufacturing now that could be big. Environmental stuff if you could generate a microbe that would clean up toxic waste that would be good.

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They constantly try to escape from the darkness outside and within
Dreaming of systems so perfect that no one will need to be good T.S. Eliot

I know they are working on injecting microbes into oil wells to increases extraction of oil and gas. I believe they have microbe technology for toxic waste as well.

It is interesting that US unemployment (and Canada too) has pretty well fallen to historical levels in the last few years. I thought we were headed to a period of large structural unemployment. But we seem to keep inventing new jobs for people to do. Although I could be wrong I have not looked into things like the labor participation rate lately.

There are lots of jobs to be done and lots of jobs we could invent to keep people busy. It is really unacceptable that so many people die on the roads we can make them a lot safer. We could put many people to work doing that. I don't know for sure but it may be the roads need modifications to more readily accommodate self driving cars.

I agree about the electorate. I guess its a two sided street. Maybe if we were less hostile to politicians we might get some quality people?

What are five jobs that pay well in the tech sector that don't require a heavy math and science background? I have a patient who is managing tech support in an internet provider company locally that has 500 employees. Her education is as a youth services provider. She is in her mid 20s. She recently was tasked with expanding the number of employees to 750 because they want to provide better support. She says youth services prepared her well for managing people. That made me smile.

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They constantly try to escape from the darkness outside and within
Dreaming of systems so perfect that no one will need to be good T.S. Eliot

you can find some of the non-stem jobs here:

http://fortune.com/...ithout-stem-degrees/

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"The great pleasure in life is doing what people say you cannot do."

I hated how ignorant I was about blockchain technology so I read a couple of books... I still feel ignorant but I can safely say that what you wrote is 100% true.

The next industrial revolution will be heralded by Quantum Computers which are no longer a physics problem (e.g. "how do we even begin to make this thing") but rather are an engineering problem (e.g. "how do we make this thing better, faster, and cheaper"). Even though quantum computers were theorized shortly after the birth of classical computers, we just figured out how to make them a few years ago. In relative terms, it's the late 1980s for quantum computers.

Quantum computers will be able to solve previously unsolvable problems like:

• "Solving" logistics problems. E.g. calculating the optimal way to get a box from point A to point B while also optimizing for all the other boxes and routes.
• Properly designing a Stellarator (a type of fusion reactor with very complex geometry).
• Working out the calculations for a traveling wave reactor.
• Working out the calculations and simulating a DEC traveling wave reactor (we're talking Star Trek levels of energy and power density).
• Simulating chemistry experiments: we'll be able to simulate entirely new materials and chemical compounds without having to physically make them
• Simulate the human body: we'll be able to model the entire chemistry of the human body with unthinkable consequences for healthcare

I'm sure there are dozens more but any one of those applications could totally change the world.

The power will not rest with the hardware, however. It will rest in the hands of those (very few) that know how to use the hardware to accomplish an end goal.