Peter Rip of Leapfrog Ventures has a humorous piece on On Everything 2.0 and takes a dig the 2.0 trend with Arithmetic 2.0. Then he gets serious with Venture Capital 2.0 a series on paridgm shift in the (IT) VC space. First in the series, Venture 2.0 – Preamble traces the

The sequential evolution of the IT “food chain” from semiconductor (Intel, National) to systems (Apple, Sun, Dell) to software (Microsoft, Oracle) to services (Yahoo, Google) has been the underlying order.

and goes on to say

And some firms are already responding. The move to Cleantech is a move to exit IT (or diversify) to find alternative industries. The move to build Indian and Chinese outposts are brand extensions.

Some highlights:

Success in IT venture capital investing has been a form of capital and information arbitrage for much of the period up to the late 1990s. The scarcity of risk capital and the scarcity of insight about evolution of technologies and technology markets made it possible for astute venture capital firms to transform access to capital and superior technological insight into superior returns. For example, as Mooreโ€™s Law was driving the electronics industry to the mantra of smaller, cheaper, faster, Sequoia Capital built a franchise reputation in semiconductor venture investments, based on the experience of its two founders, Don Valentine and Pierre Lamond, both early veterans of National Semiconductor.

Success begat success in the venture business. Since venture investments have had payoff characteristics like options, i.e. limited downside and infinite upside, the key to the business has been “deal flow.” Deal flow is about seeing as much of the total distribution of deals, to generate a larger set of ‘long tail outcome’ candidates. Success made IT venture capital business a first-order Markov process, where the probability of the getting the next hit was enhanced by having a previous hit, precisely because of the desire of all entrepreneurs to affiliate with “known winners.” The two masters of this phenomenon have been Kleiner, Perkins, Caulfield & Byers and Sequoia Capital.

Worth checking out and worth staying tuned for more.

Balaji Sowmyanarayanan

I am a social entrepreneur, wannabe.

My passion is in combining craft with technology to create products of high utility and aesthetic appeal. I am currently working on a physical(paper) file tracking system that uses high tech electronics, fabric, Zari( the shiny metallic thing in sarees) ๐Ÿ™‚ and good old database programming etc. I plan to 'open source' the know how of making these file tags and actively transfer this know how to willing artisans and craft enterprises.

The rationale is that in India there are a lot of processes that are paper file based. And it is going to be so for a few more years. The files have a tendancy to get lost due to intendented and unintented human factors. And there are a lot of artisans and craftsmen who are nifty with their hands. If I am able to solve the pain point of file tracking problem- with the artisans/craftsmen it will create productivity at the demand side and prosperity at the supply( craftsmen) side. In the process it will infuse technology into livelihoods of craftsmen and artisans.

This will be interesting to technology innovators in general as the 2-way conversation between technologists and craftsmen can create a good rapid prototyping infrastructure.

The prototype development of the file tracking system is funded by TIFAC - organization involved in Vision 2020. The project is nearing completion with a small proof of the concept implementation at a public sector unit.

I have done my Masters in Computer Science and Engineering from Indian Institute of Science, Bangalore. I have worked for top consulting companies in India and abroad( Infosys, EDS, CTP).

I have interest in roller skating, yoga, spirituality, meditation, hiking and trekking. ( I have been on an adacious coast to coast drive from New York, NY to Anchorage Alaska on a Old Carolla with > 150,000miles on it with an Internetfriend/stranger ๐Ÿ™‚ )

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