U.S. Markets closed

Facebook Is Killing Silicon Valley: Entrepreneur

Daily Ticker

Follow The Daily Ticker on Facebook!

Serial tech entrepreneur and professor Steve Blank argues that Facebook and the "social media" craze are ruining Silicon Valley's innovation machine.


By making venture capitalists so greedy that they're only funding companies that could be worth billions of dollars in a couple of years.

In the old days, Blank says, venture capitalists used to be much more patient. They would fund true "technology" companies that they knew would take 5 to 10 years to reach maturity.

But nowadays, Blank argues, VC's have become so intoxicated by the lure of instant riches from the likes of Facebook and Instagram that they're mostly funding companies that have a chance to be worth billions overnight.

Of course, Blank also concedes that this is always what Silicon Valley has done--moved from one investing fad to another. The Valley has been the country's high-tech innovation engine for nearly a century now, and the types of companies VC's are obsessed with has changed every few years. Once the social-media craze has played out, Blank says, venture capitalists will go back to funding a more diverse set of companies (or at least a different kind of company).

And maybe they'll go back to being more patient, too.

SEE ALSO: EXCLUSIVE: Here's The Inside Story Of What Happened With The Facebook IPO

More from The Daily Ticker

Facebook IPO Fiasco: Here's How Small Investors Got Rolled Over

Facebook Fallout: Morgan Stanley May Face Legal Liability, Attorney Says

Facebook Banks Secretly Cut Earnings Forecasts In Middle Of IPO Roadshow

"Crisis Meltdown" at Nasdaq Mars Facebook IPO

Facebook Effect: How The Social Network Changed the World

Facebook Privacy Concerns: A Majority of Users Don't Trust It

Facebook IPO to Mint Next Generation of Young Ultra-Rich Techies

FACEBOOK IPO: Biggest Risks and Opportunities

Facebook IPO: Not For The Average Investor

Surprise! Turns Out Mark Zuckerberg Is A Great CEO

Facebook's "Defensive" Instagram Deal Could Spur Flurry of Tech M&A: Josh Brown

Facebook Fights for Users' Privacy -- Against Employers Who Ask Job Applicants for Passwords

Facebook Investors Should Be Worried By Pinterest Mania: Fortune's Hempel