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Next wave of innovation and wealth creation

MM: This reminds me of an interview with Eric Schmidt of Google on the Charlie Rose show about two years ago, when he said that the eighties were all about hardware. Out of that we got Seagate and Maxtor and EMC and Compaq and HP and IBM. Apple and Dell and all those kinds of things.

By the time we got out of the 80s, the innovation space had been all used up.

Then we got into the 90s and Eric said it was all about software. Then we had Microsoft and IBM and Oracle and Peoplesoft and Siebel and SAP. Guys like that.

By the 2000s, all the innovation space had really been used up for enterprise software. He said the first six years of the 2000s were all about internet and infrastructure. Out of that we got Amazon, Yahoo and eBay and Google and MSN and a couple of others.

But he said that as of 2006, there’s never going to be another eBay and there’s never going to be another Yahoo.

He said, “The future — this next wave of innovation and wealth creation and successful IPO’s is going to be about small groups of people that produce and consume small chunks of information and content.”

RT: Sure.

MM: As they produce and consume, at some point, they hit a critical mass. At that point, you get Skype. You get Facebook. You get MySpace. You get LinkedIn or whatever.

So Eric Schmidt was really making the case that the next big wave is going to involve social media, or media in social networks. I can only assume that you would violently agree with that.

RT: Violently. Yes.

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