Fifteen Year Cycle

As the bad news keeps pouring in, a lot of people are wondering what we can expect in the coming years. Additionally, everyone is trying to figure out what hope exists. Well, I’ll give two thoughts on this (briefly).

First, the world of technology is driven by two factors: the laws of exponentials and the Black Swan. Progress does not occur linearly but exponentially. We can expect to see changes the magnitude of the past 100 years in just the next 20 years. This means a lot of people are going to a) be really busy and b) be dramatically better off. These changes will come from places you can’t predict (Black Swans). Market crashes and negative developments are not the only unexpected six sigma events.

Second, markets run in roughly 7 years cycles and technology in 15 year waves. Vacuum tubes to main frames to mini-computers (DEC) to PC’s (Apple/Microsoft) to the Internet. The next wave, then, should start in 2010-11 and hit full force in 2015-16. Many in the business (us, Kleiner, etc) feel this will be in Cleantech. The energy market is 10-20x the IT market. We are not talking about billion dollar markets but trillion dollar ones. There will be a lot of casualties but some enormous wins.

So, there us no doubt that life is really brutal today. But, prepare and get ready for enormous, explosive market opportunities. It’s going to be mindblowing.

So, I stick my neck out again typing on my small iPhone. I declared the old venture cycle dead last June. I am declaring the the next cycle, even bigger than the former, will kick in during 2010 with foundations forming by the end of next year. I also believe we will see 30-40% of remaining venture firms will not survive to see this through (food for another post)…

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