Is Silicon Valley’s culture of creativity slowly dying?

Questions And Answers

Silicon Valley is currently known as the centre of the world for innovation, but perhaps the philosophy of acquisition is starting to kill off the creative ambitions of this generation’s dreamers.

This idea is based on the endless quest of the technology industry’s giants to find for the next big thing. Companies like Google, Amazon, IBM or Intel, are constantly on the search to purchase new businesses, people and IP to fuel growth and capture new revenues, but is this acquisition trail limiting the big ideas of the blue-sky thinkers?

It should be important to note that there is no practical way to prove this theory, but it might prove to be an interesting talking point. The basic premise of this idea dates back to 1971 when AT&T was considering the purchase of  ARPANet, the predecessor to the internet. What seems incredible to believe now is that AT&T turned down the opportunity to buy ARPANet off the US Government and essentially develop a monopoly on the internet.

Who knows what would have happened if AT&T had completed the transaction, but it would be fair to assume the internet would not have grown into the open ecosystem it is today. There wouldn’t have been an open revolution which drove the likes of Amazon, Netflix or Google to be masters of the world, as acquired technologies are usually put to task serving the corporate need of the parent company.

The beauty of the internet is that there are no walls and no limitations, but if its development had been controlled by a private organization, with two eyes on profitability, would the internet have developed into the beast it is today? Impossible to answer this question, but we don’t think so.

Perhaps this quirky little story can be likened to some of the situations which we are seeing today. Let’s start with Google and its acquisition of Deepmind.

Deepmind has been and, for some, continues to be the centre of excellence for artificial intelligence. There have been significant breakthroughs since Google acquired Deepmind, winning a game of Go which requires intuition is a one, but how much could be achieved without the greater corporate ambition as an objective? Google is after all a corporate machine, everything it does is geared towards making money.

There is now a purpose to what Deepmind is doing. The breakthroughs, which are of course very impressive, feed into other Google products. Google made a bet on AI and it is paying off by making its products more relevant, sophisticated and intelligent. Deepmind is feeding into the Google machine.

But, if these incredibly intelligent innovators did not have a corporate goal, what would they do? Maybe their financial ambitions would take them down the same route or maybe the academic curiosity would take over and they would start playing around with new ideas that have no immediate financial gain or corporate objective. Perhaps they would investigate an idea just because they want to and it could lead to the greatest breakthrough of this generation.

Corporate aims laser focus the attention of brilliant people, who can get distracted easily, to speed up progress. Sometimes this focus is needed but sometimes these distractions are. That’s the perfect thing about the unknown, you don’t know what’s out there and it could be exactly what the world needs.

Another interesting example to think about is Netflix. This is a company which has faced numerous acquisition rumours and stayed the steady course of independence. Blockbuster started the rumour trail, Verizon walked it for a while, Disney is a long time traveller and Apple is a newcomer. If the organization had been acquired at some point, would it have found itself in the same position as it is today?

We are not financial experts at and would have no idea how much debt Netflix is harbouring, but it is certainly not shy about spending on content in pursuit of creating arguably the world’s finest entertainment platform. Should the company have been purchased, would executives have been given the freedom to signs checks in the way which they have done and continue to do? We very much doubt it.

So this is the conundrum we are facing today. The giants of the technology world are acquiring companies in their own pursuit of profitability and relevance, but it might just be holding back innovation. Acquisition should, in theory, offer a greater R&D budget for these thinkers to play around with, but this financial contribution comes with caveats and corporate responsibility. They might be able to achieve certain things in a quicker timeframe, but that might come at the expense of new ideas.

This acquisition trail is never going to stop. No-one wants to be remembered as the next John Antioco, the CEO of Blockbuster who passed on the opportunity to buy Netflix. Corporate funding might save some ideas, but is it a good substitute for exploring the unknown at a slower pace and finding the next big thing? We’re not too sure.

It’s an interesting thought to consider, and while it does sound very doom and gloom, there is at least one saving grace. You can’t miss what you’ve never had.

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