Is There A Venture Capital Case To Be Made For "Old Entrepreneurs"?

Vinod Khosla (photo originally appeared in The Washington Post)

Washington Post columnist Vivek Wadhwa recently raised an often whispered question about age and entrepreneurship. Using remarks by venture capitalist Vinod Khosla as a launching point, Wadhwa states the issue plainly: is there an age threshold for individuals who, in Khosla's words, "make change happen"?

This thorny proposition is usefully explored in Wadhwa's column. The piece includes links to an interesting session conducted by Garage Technology Ventures in which Google's Eric Schmidt and Sequoia Capital's Michael Moritz address the topic. The prevailing sentiment, at least from Silicon Valley and other tech bastions, is that age matters in certain circumstances. According to this line of reasoning, the most "disruptive" ideas, inventions, and innovations in technology come from twenty-something wolves. However, in areas where experience adds exponential value to a firm's direction and performance, the age  ceiling moves up into an essentially less defined zone.

In fairness, Moritz hedged his bets by mentioning there were some older folks, such as Yahoo's Terry Semel, who "has the metabolism of somebody in his 20s. You can have some old 20-somethings and some young 60-year-olds, but the passion is the enduring things."

Now, I have some skin in this game, as my age puts me in the older-than-25 group. I'm old enough to be wary of buzzword use, including current vocabulary flavors such as "disruptive" and "passion." Still, the whispered question about age is there, and clearly present in the VC and entrepreneur communities.

You're welcome to comment on this topic. It's one that will not go quietly into the night.

Patent Chase Resembles Napoleonic-Era Alliances and Conflict Scale

The Financial Times posted an interesting overview of big-time tech's current, high-stakes bidding for patents. Major players, such as Google, Apple, and Microsoft, recently concluded an auction for a substantial portion Nortel's intellectual property covered under U.S. patent law. To prevent Google from obtaining this rich vein of tech gold, a commercial alliance that resembled a Napoleonic Era-style alliance was formed to outbid the Mountain View, California search monolith. Among the friends of convenience were presumed adversaries Microsoft, Apple, and Research in Motion. Notably, Google executive chairman Eric Schmidt complained after the fact about the investment in patent acquisition versus ponying up for (shades of Bill Gates) "innovation."

Why would the alliance be so desperate to stop Google? The FT article provides a startlingly simple answer: Google has a thin patent collection compared to its principal competitors. The financial implications of patent control have escalated as mobile computing and smartphone popularity dramatically increase on an annual basis. Microsoft, for example, is now charging a per-unit fee for each Android-capable unit made by selected handset manufacturers. It's a gold mine for Microsoft, which really doesn't have to do much of anything except litigate and collect. Apple, for its part, a story originally reported by Bloomberg News noted a recent FTC ruling in favor of Steve Jobs' firm against an Android handset maker for patent infringement.

As for these extra costs, expect a product price bump, so that these payments are embedded in the overall retail or wholesale rates.

When Yahoo's Jerry Yang stupidly torpedoed Microsoft's bid to acquire his firm, he opened the door to Google's continued drive to effectively become a search monopoly. We are now at the point where "google" is unthinkingly used as a transitive verb to generically identify online search technique. Once Google entered the smartphone business, its affected major competitors realized they were in for a fight. Ironically, the FT piece characterized the latest Nortel patent battle as Google's "Waterloo." What wasn't said was that it took a grand alliance to take on the Napoleon from Mountain View.

The image at the top of the post is from Ocean Tomo. According to its corporate website, Ocean Tomo "provides financial services and products related to intellectual property...." In April, 2011, an Ocean Tomo press release discussed in some detail the issues involving Google's conjectured bidding on Nortel patents.

Top Silicon Valley Firms Eye Antitrust Settlement

A story originally reported in The Wall Street Journal noted that major Silicon Valley players are in discussions with the Department of Justice over a rumored antitrust action against the firms. The allegations include collusion to not recruit or hire employees of the other conspiring enterprises. The all-star list features many Silicon Valley A-list companies, including Google, Apple, Intel, and Pixar.

A notable no-show in the DOJ's roundup is the Valley's nemesis, Microsoft.

One wonders if the DOJ's action will become an election issue. California has two very close statewide elections this year. The Republican candidate for the US Senate seat, Carly Fiorina, once carried the flag for HP. Meg Whitman, the GOP candidate for governor, made her zillions as top dog at E-Bay. (She has already spent $100 million on her gubenetorial run.)

Here's the brief pick-up by the San Jose Mercury News. The photo, courtesy of gizmodo.com, shows Steve Jobs and Eric Schmidt at a Palo Alto coffee shop in March, 2010.