CapitalPitch Blog

Episode 10 Part 1 - The 13 year technology cycle of Silicon Valley

[fa icon="calendar"] 29/05/2018 8:00:00 AM / by Lucy Courtenay

Lucy Courtenay

 deepak Natarajan - E10P1 - Lead Investor Podcast

Deepak Natarajan has been fortunate enough, to have seen first hand, and experienced at the forefront, the 13 year technology cycles which occurs in Silicon Valley.

 

When he joined Intel in 1982, it went from being a million dollar business to a billion dollar business, within a year. The changes, developments and continuous treadmill of innovation, meant that one can get caught up in it all, or fall into a deep abyss, when things are not going well. The technology cycle allows for new concepts to be tried, new products, services and inventions to be discovered and for innovation to be the driving force behind some of our more recent technological advances.

 

And as we approach 2020, we will witness significant changes to the way we think and interact with technology as we have with the previous 13 year cycles.

 

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For Deepak Natarajan, the best place to start to look at this cycle is:

 

1954 - The commercialisation of the transistor

 

What is a transistor? A transistor is a semiconductor device used to amplify or switch electronic signals and electrical power. It is composed of semiconductor material usually with at least three terminals for connection to an external circuit. This is essentially the beginning of the computer chip and closed circuit electronics.

 

Jack Kilby of Texas Instruments independently invented the the Integrated circuit, a micro-sized silicon device containing a large number of electronic switches. This greatly influencing the shape of modern computing. He was awarded the Nobel Prize for Physics on the 10 December 2000.

 

Over the next 13 years we see significant develops like:

1954 - IBM introduces its first computer model

1956 - Invention the Hard Disk Drive

1963 - The “mouse” prototype is built

1966 - Hewlett-Packard enter the business of general purpose computers

1966 - Robert Taylor Launches “the foundation for today’s Internet”



1968 - Founding of Intel and microelectronics

 

Intel (Integrated Electronics) is founded by Philip Noyce, Gordon Moore and Andy Grove to build memory chips. Intel is to become one of the worlds largest and highest valued semiconductor chip makers (based on revenue) of the 21st Century. It microprocessors and found in most personal computers today.

 

Other significant technology advances over the next 13 years include:

 

1971 - The floppy disk is invented

1971 - Intel unveils the first commercially available microprocessor

1972 - Atari is founded by Nolan Bushnell

1972 - Email is invented and the “@”

1973 - Motorola invents the first cellular or mobile telephone

1975 - Bill Gates and Paul Allen found Microsoft

1976 - Steve Wozniask and Steve Jobs found Apple Computer and build the first microcomputer in Job’s garage.

1980 - Apple goes public for a record $1.3 billion

 

1981 - The launch of the PC

 

The IBM PC (Personal Computers) is launched, running an operating system developed by Bill Gates’ microsoft.

 

1982 - Time magazine's “Man of the Year” is “The Computer”

1984 - Dell is founded by Michael Dell

1984 - Apple introduces the Macintosh

1984 - the CD Rom is introduced

1991- the World Wide Web debuts on the Internet

 

1994 - The birth of the internet

 

Netscape founded by Marc Andreesen, goes public even before earning money and start the “dot.com” craze and the boom of the Nasdaq. Although the internet has been around since the 1950’s, this was a time when everyone could access the web from their own PC’s.

 

With the accessibility of the internet, other companies and technologies developed.

 

1994 - Jerry Yang founded Yahoo

1995 - Microsoft introduces Internet Explorer

1995 - Amazon.com is launched on the web as the World's Largest Bookstore

1997 - Reed Hastings founds Netflix to rent videos via the internet

1998 - Larry Page and Sergey Brin, launch the search engine Google

2001 - Apple launches the iPod - 100 songs in your pocket

2004 - Mark Zuckerberg founds the Social Networking Service Facebook

 

By 2005 Silicon Valley accounts for 14% of the worlds venture capital.

 

2007 - The Apple iPhone

 

On the 9 January 2017 Steve Job’s announce Iphone at the Macworld convention, receiving substantial media attention. Jobs announced that the first iPhone would be released later that year and it was on 29 June 2007.

 

From there we see an explosion of Apps:

2008 - Airbnb is founded

2009 - Uber is founded

2010 - Apple introduces the tablet computer iPad and sells 1 million units in less than 1 month.

2012 - Facebook goes public with the biggest IPO in history.

 

What can we expect in 2020?

 

This is the next exciting stage. We are fast approaching 2020 and expectations are high for the next 13 year cycle.

 

We may not see another device like the Apple iPhone or the PC, or even the internet with netscape being the next best thing. However we will see innovation in areas, where we have not seen success before. These may be in areas, where there have been hindrances in the past, such as computer power. With recent improvements in power, we are seeing more AI, VR apps and entertainment. These types of products used to take a lot of computer power to operate but with better batteries, we will see a shift here.

 

We are also seeing developments like Blockchain, a workflow which makes it easier to see payments and will transform transactions.

We will witness a lot more democratisation of application like payments, so you will not need an institution to stand behind a payment, as you can look it up on the ledger. You will not need an institution to send you a statement.

 

VR might generate a new set of platforms, but it remains to be seen if it will have the reach of Apple or the PC.

 

Here within Australia and New Zealand, are always following the USA.  Venture Capital has been around for a long time but it is not well established in Aust / NZ as it is the USA. So, he would be hoping that over the coming 13 years, we will see more success stories coming out of Australia and that there is an increase in investment in this asset class.

Topics: business, investors, Podcast, Startup, Entrepreneur, Venture Capital

Lucy Courtenay

Written by Lucy Courtenay