Who's Going to Fund the Next Steve Jobs?
online.wsj.com
online.wsj.com
Some may argue that personal computers in the 70s can be compared to web-widgets of today: the public at large didn't look at them as at "real computers" and few believed in truly global adoption. In that regard early PC pioneers were swimming against the flow.
While today, the entrepreneurial mantra is to "figure out where everybody is going and be there first", being "part of the flow" is crucial (any VC will tell you that). And nobody bothers with re-thinking anything: hey, ideas are nothing, execution is the king. Build something fast. Be in a browser. Get on TechCrunch.
Next Steve won't grow out of making half-assed JavaScript reimplementations of existing desktop software. And I honestly have no idea what the Next Steve will do. I know for sure, that what we're doing today is sorta "configuration files" for software built in the 50s. Perhaps this is what they call a "matured industry" and perhaps looking for a next Steve Jobs is as practical as looking for a next Henry Ford.
Okay, time to channel Grandpa Simpson! Where's my cane?
<grandpa>
Now, sonny, what people forget is that Apple Computer brought their Apple II to an existing market for home PCs. [1] The first home PC had been introduced in January 1975, and by 1977 when the Apple II came out there were already multiple PC enthusiast magazines, Microsoft had been in the software business for two years, and there were multiple companies selling PC hardware. The Apple II was introduced at a personal computer show.
Even the Apple I was an entry into an existing market.
Jobs and Wozniak certainly pushed the envelope: The Apple II was, for example, arguably the first PC to be marketed at folks who didn't know how to solder, who didn't even care about hardware but just wanted to buy or write software and run it. But the hardware hackers drooled over it too [2], and they bought it, and thus the venture was less risky that you think -- it didn't have to create its own market, because Jobs knew the core market was already there; the challenge was to grow the market.
Pioneering the PC market was the work of the Altair guys at MITS, two years prior. MITS, of course, followed the usual good advice for people who are trying to discover a brand-new market: They launched early to test the market. They launched really early. As in "before they actually built more than a single prototype, they photographed a mockup and sent that photo plus the schematic to the editor of Popular Electronics [3], who read the schematic, concluded that the hardware was probably real, and published an article on it that drove hundreds and hundreds of mail orders in a few weeks." Then the company used the money from the mail orders to actually buy the parts, package the kits and send them out. [4]
You could even argue that MITS was targeting an existing market: If the folks writing Popular Electronics hadn't built a fan base that was ready and waiting to solder together computers, the PC revolution wouldn't have caught fire in 1975.
</grandpa>
All of this is cribbed from Steven Levy's Hackers: Heroes of the Computer Revolution, a book you should really read.
[1] Note: Here "PC" has its original meaning of "generic personal computer" and does not refer to MS/DOS compatible boxen. Those came later, obviously.
[2] It helped that the Apple II not only came with schematics and a complete listing of its ROM, but had been designed by a hardware-hacking genius of the first water who liked to show off.
[3] MITS also mailed their single prototype to Popular Electronics. It got lost in the mail and was never seen again. If you find it, contact some historians.
[4] If you think you intend to follow this business plan, make sure your lawyer is sitting down before you broach the subject.
But Popular Electronics readers or not, I still think it's accurate to say that "the market" for PC's did not exist before Apple. The post I was replying to was arguing about whether Apple or Microsoft was more like Henry Ford. I think it's also fair to say that the market for cars in the US did not exist before the Model-T, despite the fact that there were several cars sold before it, all of which were unreliable, extraordinarily expensive, and used only by hobbyists - just like pre-Apple I (and to a lesser extent pre-Apple II) computers.
BINGO, i talk about this all the time and no one listens! the move to multi-core is a chance for a real reboot, rather than optimizing old software to run slightly faster on the new hardware.
I guess that changes the question - will the next Steve Jobs need a traditional VC?
Funding did, of course, follow quite quickly from this for the Apple II.
Actually he uses the phrase "Mother of All Bubbles" elsewhere.
Uncritical optimism is a sure indicator.
You need to go there and see it with your own eyes... I was skeptical too but not anymore. China is rising and they will eclipse us all.
So you have a very large market that continues to grow(unlike USA), of people who are willing to spend the extra money for Apple like status symbols, who are VERY nationalistic, and who have no problem buying U.S. knock offs. And since chinese have no problem copy pasting ideas/products, it would make sense that the uPod, uPhone, uNextProductFromApple will be copied, which will then fly off the shelf, and will make the chinese version of Steve Jobs rich.
In the US, for instance, you'd need to earn at least, say, (picking a random number without wanting to start arguments and well-it-depends-where-you-live threads) $35,000 a year to be 'middle class', whereas China's per capita income is still less than $2000.
While America is having problems in the housing and financial sectors, it still has the best environments for fostering innovation. Can you name any new industries created in China in the last 20 years?
China's main advantages are a huge (and increasingly skilled), labor force, excellent infrastructure, an eroding cost advantage, a great environment for foreign investment, and a government that can get things done. Which one of those things is critical to creating a revolutionary company? And which of them are unavailable to entrepreneurs in the US?
If I had to be on the next big industry to be created outside the US, I'd bet on India rather than China.
India does not have as much middle class as China so I don't think you will have have a big rise in India as we'll see in China.
BTW, Are we talking about two different things? The article was talking about venture investment in general (which you seem to be talking about) but the title (and your original comment) was about "Who will fund the next Steve Jobs?". While I think China's rise in wealth, middle class, political influence, etc are nearly unstoppable, I doubt that the next Steve Jobs will come from there (or if he is Chinese, he will work in the US).
My interpretation of "the next Steve Jobs" is:
1) starts a many billion dollar company
2) that company creates (ie Apple and the PC) or matures (Google and search) a big, new industry
3) retains control of that company and is the global face of that company (ie Jobs, Ellison, Gates, Phil Knight, Oprah, Larry + Sergei, Buffet, Bezos, heck even Astor, Carnegie, JP Morgan, Hughes, etc)
I can't make any useful predictions about where someone like that would come from because I can't predict the new industry, but the safe bet for those criteria would still be the US.
4) success of personality and company make them widely known and recognized outside of their industry and their country
Also, working for Microsoft or Google, you can make very very good salary (perhaps multitude more than your folks), so if you're a capable young hacker, the typical path is going corporate or study abroad for grad school.
Before we can get a Chinese Jobs, we need a Chinese PG to insulate the potential Jobses from the legal mess, provide key connections and offer validation to family and friends.
But, the article isn't about who will be the next Steve Jobs - it is about who is going to fund the next Steve Jobs. Given China's economic growth, there is a good chance that the next Steve jobs could be funded by investors from/in China.
But the Steve Jobs that counts for is Steve Jobs circa 1978, the Steve Jobs that was making cheap ugly boxes that plugged into your TV. (And of course it was really Woz, but let's leave that aside for the moment.) The point is that Apple started and became big by being a low-end company, and only turned high-end once they were already huge.
The closest analogue I can think of in recent years is the Eee PC, which interestingly comes not from China but from Taiwan. (Support for the notion that innovation comes more easily in democracies? It's only one data point, but still...)
The (production) Apples you refer to have never really been ugly nor cheap. If I remember they had sleek design with easy to get at insides so you could add slots. They always seemed to be on, around the magical $2-3K dollar mark no matter what country you lived in. Who needs monitors when you could use a spare tv? I remember getting my first PC and asking if they had a card to support TV and got blank stares... "no you need a high quality CGA screen instead or an EGA for $$$ more"