Cycles

Now that I’m 42 years old, I’ve been around the computer industry long enough to understand that it runs in cycles.  I don’t know how long the cycles are going to be, when they are going to reach a peak or a trough, but I do know that things will get better, will get worse, will get better, will get worse, will get better, …

When I reflect on it, the long term trend over the last 42 years has been amazing.  There are lots of formal and informal studies and articles on this that all link to Schumpeter’s theory of creative destruction and Clay Christensen’s ideas around disruptive innovation.  As the cycles play out, great new companies get created around new innovation, some reach escape velocity, some get absorbed into other large incumbent companies, and some disappear. 

Today’s New York Times has two short articles – one in Bits and the other in DealBook – that reminded me of this.

Our good friend Microsoft makes a key appearance in both articles.  Pondering the rise, fall, rise, fall, … of each of these companies over a 50 year period – both at a macro company level and within specific product groups – is a fun mental exercise (at least for me.)

When I reflect on the various companies we’ve funded over the past year I get really excited about the stage of the cycle we are in with the new Foundry Group portfolio.  Independent of who wins the upcoming election, I think the vector of innovation around software and Internet will be steep and many of the things we’ve been talking about for the past 20 years as science fiction are going to start to instantiate themselves as real products and services.  The relationship between humans and computers is once again changing rapidly and the number of different amazing things that I can envision happening in the next two decades is extensive.

I’m just sitting here watching the wheels go round and round.