Silicon Insider: Tracking the Big Trends in High-Tech

B U R L I N G A M E, Calif., Dec. 5, 2000 -- And the Next Big Thing is . . .

One of the joys of the Web is following a thematic strand to wherever the links will take you. For all the fears a couple years ago that the Web would isolate people, enabling them to talk only to people with the same tastes and prejudices as themselves, the countervailing force — wandering from site to site without any real purpose but curiosity — seems even stronger.

The “random juxtapositions” that urban theorists claim is so crucial to the vitality of cities, is also wonderfully present on the Net.

It was following one of these trails (while wandering throughArts&Letters.com) that I stumbled over a site I’d never heard of: Andreas.com.

High-Tech, From the Inside

As near as I can make out, Andreas.com is a semi-personal site created and run by someone who has worked in Silicon Valley for about 15 years, mostly in engineering, but for the last five years in technical writing. During that time he has worked for 20 companies — an astonishing number even in this gypsy town.

On his site, next to the proud only-in-the-Valley announcement “On the Web in ’95,” Andreas offers links to his books, how-to’s on building Web sites, free fonts and wallpaper, advice on how to get a job at a start-up, and pictures of cats and himself. Pretty standard stuff.

What makes Andreas.com so compelling is that apparently once per month, Andreas pours into the site, in an essay, his thoughts about living and working in the high-tech start-up world. If not quite Notes from the Underground, it is certainly a glimpse into the mind of someone both in the thick of the entrepreneurial world and with enough maturity to try and put all the craziness in perspective.

Andreas entitles his essay “Is the Web Boom Over? Is the Sky Falling?” — and to his mind, the answer is yes on both counts. After presenting his bona fides, Andreas gives one of the better descriptions I’ve read of the various cycles that govern tech: seasonal, quadrennial, and fundamental.

It is the last he wishes to explore, and he does so in a clever way by comparing the history of computers to evolution on Earth. Thus, there is the age of big, cold-blooded IBM mainframes (dinosaurs), warm and fuzzy personal computers (mammals) and now the Age of the Web.

You can guess where Andreas goes next: that the Internet Age is now about to end as well, with a mass extinction of dot-coms as sweeping and complete as the one of reptiles as the end of the Jurassic. And what will replace them? No doubt one of those little start-up critters currently skittering around unnoticed at the feet of the ailing giants.

He gets a little loose with the facts at times , but his analysis is fundamentally correct. In all, an exemplary effort by Andreas, one with far more insight than that offered by most stock analysts and other industry gurus who were insanely optimistic over the last year, and are now busily covering their tracks while loudly bewailing the present.

Predicting the Next Big Thing

What is important in Andreas’ message is that he understands that once a hot industry peaks it almost never (the exception being semiconductors) comes back. Lightning never hits the same place twice. The Next Big Thing always pops up somewhere new.

Unfortunately, it is here that Andreas makes a mistake. While he is optimistic that there will be a Next Big Thing after dot-coms (he thinks, for the short term, that wireless PDAs are filling the vacuum), he also argues that one thing he’s “learned in 15 years is that no one can predict the Next Big Thing. It always comes out of someplace you never expected.”

This attitude is not only wrong, but self-defeating. It is the viewpoint of a career spent in the bowels of start-ups and not in their boardrooms — and it may explain why, after 20 companies, Andreas is still doing technical writing instead of retiring to 15,000 acres in Wyoming.

The fact is, you can predict the Next Big Thing — or at least narrow the list down to a handful of the best possibilities, and then over time narrow that list down to one while the opportunity is still hot. That determination process takes place among leading investors, venture capitalists and smart entrepreneurs all the time; it is happening right now even as most people are gnashing their teeth over the e-commerce crash.

To assume that the next boom cannot be predicted is to guarantee that you will miss or arrive too late to take advantage of it.

Don’t Fight the Laws

So how do you do it? Start with the basic laws of tech. Moore’s Law is the most important, but there are now perhaps a dozen more covering everything from networks to bandwidth.

Young engineer Nolan Bushnell sat down in the mid-1970s, looked at the falling prices of memory chips, extrapolated where they would be in a couple years, and precisely predicted when computer games played on college computers would be cheap enough to operate in bars. When that day came, he had Pong ready.

We can do the same thing today. Apply the relevant laws and you’ll have a pretty accurate idea where microprocessor performance, PC usage, display technology, fiber optic bandwidth, wireless, PDAs, games, the Web, etc. will be two, three and five years from now.

Then plan for your product to use that technology at that date (beware: if you get there too early, or try to force the market to speed up, your company will die).

To improve your odds, pick markets that have yet to mature. For example, it’s probably a mistake to target the aging PC world. But PDAs are still ripe, in hardware, peripherals and applications — does anybody believe that the Palm or the Visor are the final solutions in their market?

There are also opportunities, in applications at least, in cell phones and game players (except in games). Opportunities are everywhere in Web appliances, especially as homes and cars get more wired.

Of course, the biggest opportunity will come with Internet II, which should arrive about 2002 or 2003. For that full-motion video, high bandwidth, global technology we will need all new infrastructure, from backbone to servers to personal ports. We’ll also need a massive new library of tools to deal with this tsunami of data.

And biggest of all, we’re going to need one helluva lot of content to fill this new medium.

And that’s just extrapolating from what we’ve already got. For the really revolutionary new technologies, the solution is not, as Andreas suggests, to throw up your hands, but do some basic research.

You can read about the Next Big Thing After the Next Big Thing right now in technical journals and even some trade magazines. What are they? Micro-machines, photon-based computation, sophisticated analog interfaces to the natural world, and others. VCs are already putting a lot of money into these technologies, companies are already underway. You are already falling behind.

So, give Andreas a read. We all need to learn the lessons he’s trying to teach, … all but the last one. For that lesson, we need only know one thing: the train is already pulling out of the station. If we want to be on board, we’d better start running.

Michael S. Malone, once called “the Boswell of Silicon Valley,” is editor of Forbes ASAP magazine. His work as the nation’s first daily high-tech reporter at the San Jose Mercury-News sparked the writing of his critically acclaimed The Big Score: The Billion Dollar Story of Silicon Valley, which went on to become a public TV series. He has written several other highly praised business books and a novel about Silicon Valley, where he was raised. For more, go to Forbes.com. And you can talk back to Silicon Insider via e-mail or through an ongoing bulletin board.