Try not to screw up.

Oh, snap! Steve Blank learns the painful lessons so the rest of us, if we’re smart, don’t have to.

via Unrequited Love.

Steve Blank’s latest  blog post, Why Facebook is Killing Silicon Valley, talks about how Facebook’s enormous financial returns for its investors signify a sea change in the expectations of VCs, to the detriment of other types of innovations that require lots of investment and a much longer road to a payoff.

As Steve puts it, what’s great for making tons of money may not be the same as what’s great for innovation or for our country, and I agree with him.  But how are we going to turn the tides and get major funders to start thinking longer term again? After all, can we blame VC’s  for following quick money?

Is there a VC willing to dedicate some percentage of a fund to longer term innovations? Or do we have to come up with alternative funding models? Unfortunately we cannot hope to rely indefinitely on individual gajillionaires to support everything, nor is the legislation-backed crowdfunding model able at this point to, I don’t know, build a biofuel-fired spaceship or solve world hunger. Another option – government support – would hardly be palatable to most American taxpayers, though it begs the question of whether this is how other, less democratically inclined countries will eventually overtake the U.S. in innovations.

Oh hey! That takes us right back to the quote at the beginning of Mr. Blank’s post, from President Kennedy talking about  sending a person to the moon:  Kennedy exhorted this country that this mission was the right thing to do because it was  not easy, but hard, but if you want to be more cynical, the key message was also “because that challenge is one … which we intend to win.” By God, no Soviet was going to land on the moon before the Americans.

I’m hopeful that this country’s enormous sense of competitiveness, its  sometimes  obnoxius insistence on always being the winner, will inspire at least some  (be they VC’s or otherwise) to commit to the big, important innovations that don’t necessarily come with instant gratification. What’s needed, perhaps, the presence of a threat – or an inspiration.

****

While Blank was discussing the threat to early-stage innovations, Xconomy’s Luke Timmerman talks about a threat at a later stage, when a mid-size biotech company becomes an acquisition target (you can read the article here) . On the one hand, Timmerman asserts, mid-size biotechs have generally been the ones successful at advancing new drugs. On the other hand, their success makes them lucrative acquisition targets. Such acquisitions, however, assign virtually no value to their R&D pipelines. So – voila – here’s another way that innovation can be killed.