Lyons: Cloudy Days in Silicon Valley | Newsweek Daniel Lyons | Techtonic Shifts

VENTURE CAPITAL
Green Gets Red Light
Barrett Sheridan 4/25/2009 12:00:00 AM
As oil shot up to $150 a barrel last year, venture capitalists (VCs) poured money into clean technologies like NASA-caliber fuel cells, on the belief that their costly, sci-fi-inspired advances would remain competitive even if oil fell to $50 a barrel. Now that it has, closing at $52 last week, VCs are showing just how committed they are to the green revolution: not very. While VC investments were down 47 percent overall last quarter, investments in clean tech fell by 84 percent —the sharpest drop for any sector. Last year, clean tech attracted a record $4.1 billion; this year, it's projected to be just $600 million. It's gone from being the second most popular sector to invest in (after software) to the second most reviled (after media/entertainment). Obama is trying to reinflate clean tech with $83 billion in his stimulus plan. But VCs may have moved on to new prey: financial services was the only industry to see an uptick in investment last quarter.
BUSINESS
Show Us the Money
Nick Summers 3/14/2009 12:00:00 AM
In this week's cover story, NEWSWEEK business columnist Daniel Gross writes about the "safety bubble": the dangers of Americans turning too abruptly to too-safe investments after a generation of risk-friendliness that powered the U.S. economy. Avoiding risk feels like the right thing to do these days, but it does carry consequences. One of these can be found in the venture-capital industry, which appears paralyzed—with the stock market in the dumps, startups fear they can't stage successful IPOs, and they have similarly bleak hopes of a lucrative purchase by a bigger corporation. Afraid they won't realize a return, the institutions and wealthy individuals who invest in venture funding are pulling back their infusions of cash. That, in turn, means more fledgling startups are struggling to find enough capital to grow.
ENTREPRENEURS
Encourage the Rebels
Vinod Khosla 12/6/2008 12:00:00 AM
The world is in the midst of an economic, social and environmental crisis that is overturning conventional wisdom. The best course of action is to tackle it head-on with new ideas, fostering creativity and encouraging "black swans." According to author Nassim Taleb, those are events that have a "rarity, extreme impact, and retrospective (though not prospective) predictability." Technology shocks are one of the best examples of this maxim in action—examples range from personal computers and creation of the Internet to the demise of the traditional telecommunications infrastructure. Often underestimated at first, black swans can transform markets or create new ones. We need to encourage them.
GIVING GLOBALLY
Bringing Spice To A Hot Land
Mac Margolis
Don't look for Baixas in a guidebook. There are no hotels or historical landmarks here, only a dirt track leading to a cluster of mud-and-wattle huts. The model-studded beaches on Brazil's gilt northeast seaboard lie just 140 miles south, but they might as well be a world away. Baixas is the poorest zone of São José da Tapera, one of the most desperate municipalities on the continent, where the average monthly wage is $24, half the population is illiterate and the human-development index of .56 rivals that of the most wretched regions of Africa.
INNOVATION
Beyond Silicon Valley

For more than a decade, Silicon Valley has been considered the epicenter of innovation. All the key elements of a tech revolution are located within a few miles of Interstate 280: a top education and research institution at Stanford; a consumer audience primed to try to adopt the next innovation; established companies with a history of technological innovation, and, of course, an engaged, active venture capitalist community on Sand Hill Road.
PROJECT GREEN
‘It’s All About Energy, Stupid!’
Karen Breslau
Presidential candidates used to get away with little more than plugging ethanol in Iowa and the requisite pledge to clean the air and water for the next generation. Not in 2008. With oil prices nearing $100 a barrel and public concern over global warming rising faster than Al Gore's trophy pile, this year's campaign clich? is "energy independence." Along with health-care plans and strategies for Iraq, the candidates are churning out detailed proposals to slow climate change and wean the country from imported oil. (How green are you? Take our quiz and calculate your carbon footprint.)