Yammer CEO David Sacks, who just sold the company to Microsoft for $1.2 billion, sparked a lively debate on Facebook over the weekend with this post …
“I think silicon valley as we know it may be coming to an end. In order to create a successful new company, you have to find an idea that (1) has escaped the attention of the major Internet companies, which are better run than ever before; (2) is capable of being launched and proven out for ~$5M, the typical seed plus series A investment; and (3) is protectable from the onslaught of those big companies once they figure out what you’re onto. How many ideas like that are left?”
The ability to defend an idea from other peoples’ patents is also a problem, he noted.
People responding to Sacks’ comments included legendary investor (and Netscape co-founder) Marc Andreessen: “An infinite number — human creativity is limitless — which doesn’t make it easy, but does mean the opportunity is unending,” Andreessen replied.
In a follow-up comment, Sacks says his original post didn’t have much to do with the sale of Yammer to Microsoft.
He writes, “My argument explicitly applies to software categories where there’s an incumbent. Yammer created a category that didn’t exist (Enterprise Social Networking). Creating new categories, rather than iterating at the margins of existing categories, is what I’m arguing entrepreneurs need to do. The question is whether that’s getting harder or easier as the Internet matures. Personally, I think it’s getting harder, but VCs like Marc, George, Shervin, and others may have a better vantage point to make that assessment.”