Former VC Bill Stensrud Opens Up About the Industry; “I Couldn’t Figure Out What to Do With the Money”
Earlier this week, former VC Bill Stensrud published a piece at his blog about why venture capital as we know it is doomed. His argument has nothing to do with “the economy of other transitory exogenous factors” to which other doomsayers often point. Stensrud says the problem is much more fundamental. Specifically, he argues that that last truly life-changing innovation was the invention of the transistor in the 1950s (it was “the meteor hitting the earth”), and that pretty much everything else that has followed since -- the integrated circuit, the PC, wireless telephony and the Internet -- have been opportunities born of that invention. Big deal, right? Except Stensrud believes major innovation happens not in gradual, continuous streams but in rapid periods followed by long, stagnant periods -- and that we saw the end of a 50-year-period of “rapid” innovation in 2000. Because it’s an extreme view, and because Stensrud is no longer in the industry (the La Jolla, Calif., firm where he spent 10 years, Enterprise Partners, raised its last fund in 2001), I asked Stensrud to elucidate. The conversation was more interesting than I’d expected.
