Silicon Valley vs. Houston

Several articles have come out recently that profile the growing war between Silicon Valley venture capitalists and old-fashioned Houston oil tycoons.

You'll probably recognize some of the Silicon Valley boys from the late '90s technology boom. These same guys are investing billions in new, clean, renewable energy. In the last decade they were attempting to overthrow the business and consumer status quo. This time they have the oil companies in their sights. A New York Times article published today starts with this paragraph...

• Silicon Valley’s technology investors have taken to the ramparts, threatening to tear down the oil and gas industries’ dominance with innovations that use ethanol, solar and wind.

The New York Times article goes on to discuss how these same venture capitalists are playing it safe by investing in oil technologies while pushing greener options.

Despite that small hypocricy, the fact remains that there are a lot of rich folks in California who believe the reign of the oil companies is coming to an end and they want a piece of the new energy revolution.

How does the new energy era parallel last decade's computer/internet revolution? According to Brian McConnell at the O'Reilly Network, similar pieces have fallen into place. For instance, during the late '90s, personal computing technology was becoming more accessible and cheaper to buy. Unfortunately, most of the hardware and software available was too complicated and isolated for mass consumption. Venture capitalists at the time saw the potential for a wired world where every home could have a computer that worked efficiently and allowed them unfettered access to information and products. They invested millions into hardware/software developers which allowed for increased development. The fact that I'm publishing this blog and you're reading it proves that these investments were a success.

Right now solar and wind technology has reached an efficiency climax. Solar photovoltaic arrays are able to absorb more energy than ever from sunlight which means more energy per square inch of solar panel. Scientists have developed far less expensive turbines that can be placed almost anywhere with access to the power grid. The problem with renewable energy, like the old problem of computers, is that access and dissemination is difficult. Venture capitalists have the money to help solve these issues. Perfect storm? I hope!

There are other reasons why these computer dudes from the '90s are suddenly interested in renewable energy. Both renewable energy development and computing development are material sciences. Competition in computing and energy is based on cost per unit of performance. More power from small packages means more competitive advantage. Making computer technology more accessible meant improving the packaging and the marketing. The same problem is faced by renewable energy providers. Finally, there are many brilliant minds in Silicon Valley who thrive on solving problems through technology. With the advancement of computers has come renewed demand for something totally different that these creative geniuses can sink their teeth into.

Oil tycoons have controlled the energy world for a long time. Now Silicon Valley computer nerds and rich web business people are coordinating their cash and creativity to give Houston a run for its money.

New York Times story HERE

O'Reilly Network Story HERE