Dis - Aggregation

Techmeme is moving more to blended curation via algorithm and human input. Its an interesting area, one thats been much on our minds since looking at how Video Aggregation would be done, and also since listening to the BBC talk on Social Media Moderation at Amplified 08, and also looking at my how we blend Algorithms and Human input:

The exact impacts Techmeme predicts are:

Humans have always edited Techmeme of course, just implicitly. For instance, when a blogger links to a story, the headline might move higher on Techmeme. What's different now is that an additional human editor will carry out changes explicitly to directly improve the mix of headlines on Techmeme. Though the implicit edits conveyed via algorithm outnumber the explicit edits perhaps by 1000 to 1 or more, the impact of the human editor is nonetheless pronounced. What will that effect be?

The news will just get faster and more interesting. Obsolete stories will be eliminated sooner while breaking stories will be expedited. Related grouping will improve. Most of this will happen only on Techmeme, though other sites (like memeorandum and WeSmirch) will increasingly benefit from the direct human touch as well.

And gaming will be easier to spot...question of course is, is it scalable? Techmeme seems to imply it thinks so:

I should note that the experience of introducing direct editing has been a revelation even for us, despite the fact that we planned it. Interacting directly with an automated news engine makes it clear that the human+algorithm combo can curate news far more effectively that the individual human or algorithmic parts. It really feels like the age of the news cyborg has arrived. Our goal is to apply this new capability to producing the clearest and most useful tech news overview available.

Though effective here may not mean efficiency. I also hope that it trades some laterality, ie keeps a bit of deviation around the standard mainstream signals - serendipty among the datastreams. Also, one suspects a rapid rise in attempts at PR seduction of the human interface to the Algorithms - enjoy

Still, this is, I suspect, one of the emerging props of the foundations of the New Media Industry. Long term we suspect bit by bit the human bits of curation will be replaced by better and more intelligent automation. We are in the spinning jenny phase of automated aggregation.... just starting to pick up the threads, as it were

Michael Lewis, who has tweaked Silicon Valley a few times (the New New Thing, Next - The Future just happened) has written an essay on portfolio.com about the impact of privatisation on the banking system (from partners to shareholders) in the 1980's, the resultant Crash then, and how the game theory was distorted from then on. And as he notes, we remembered nothing from then, and were thus doomed to repeat it:

I thought I was writing a period piece about the 1980s in America. Not for a moment did I suspect that the financial 1980s would last two full decades longer or that the difference in degree between Wall Street and ordinary life would swell into a difference in kind. I expected readers of the future to be outraged that back in 1986, the C.E.O. of Salomon Brothers, John Gutfreund, was paid $3.1 million; I expected them to gape in horror when I reported that one of our traders, Howie Rubin, had moved to Merrill Lynch, where he lost $250 million; I assumed they’d be shocked to learn that a Wall Street C.E.O. had only the vaguest idea of the risks his traders were running. What I didn’t expect was that any future reader would look on my experience and say, “How quaint.”

His analysis of the current situation is more chilling - first, this cycle's Enron Moment:

Meredith Whitney with news. Whitney was an obscure analyst of financial firms for Oppenheimer Securities who, on October 31, 2007, ceased to be obscure. On that day, she predicted that Citigroup had so mismanaged its affairs that it would need to slash its dividend or go bust. It’s never entirely clear on any given day what causes what in the stock market, but it was pretty obvious that on October 31, Meredith Whitney caused the market in financial stocks to crash. By the end of the trading day, a woman whom basically no one had ever heard of had shaved $369 billion off the value of financial firms in the market. Four days later, Citigroup’s C.E.O., Chuck Prince, resigned. In January, Citigroup slashed its dividend.

From that moment, Whitney became E.F. Hutton: When she spoke, people listened. Her message was clear. If you want to know what these Wall Street firms are really worth, take a hard look at the crappy assets they bought with huge sums of ­borrowed money, and imagine what they’d fetch in a fire sale. The vast assemblages of highly paid people inside the firms were essentially worth nothing. For better than a year now, Whitney has responded to the claims by bankers and brokers that they had put their problems behind them with this write-down or that capital raise with a claim of her own: You’re wrong. You’re still not facing up to how badly you have mismanaged your business.

And then most damning of all, the way the structure of the banks virtually guarantees misbehaviour as Greedonomics comes to the fore:

John Gutfreund did violence to the Wall Street social order—and got himself dubbed the King of Wall Street—when he turned Salomon Brothers from a private partnership into Wall Street’s first public corporation. He ignored the outrage of Salomon’s retired partners. (“I was disgusted by his materialism,” William Salomon, the son of the firm’s founder, who had made Gutfreund C.E.O. only after he’d promised never to sell the firm, had told me.) He lifted a giant middle finger at the moral disapproval of his fellow Wall Street C.E.O.’s. And he seized the day. He and the other partners not only made a quick killing; they transferred the ultimate financial risk from themselves to their shareholders. It didn’t, in the end, make a great deal of sense for the shareholders. (A share of Salomon Brothers purchased when I arrived on the trading floor, in 1986, at a then market price of $42, would be worth 2.26 shares of Citigroup today—market value: $27.) But it made fantastic sense for the investment bankers.

From that moment, though, the Wall Street firm became a black box. The shareholders who financed the risks had no real understanding of what the risk takers were doing, and as the risk-taking grew ever more complex, their understanding diminished. The moment Salomon Brothers demonstrated the potential gains to be had by the investment bank as public corporation, the psychological foundations of Wall Street shifted from trust to blind faith.

No investment bank owned by its employees would have levered itself 35 to 1 or bought and held $50 billion in mezzanine C.D.O.’s. I doubt any partnership would have sought to game the rating agencies or leap into bed with loan sharks or even allow mezzanine C.D.O.’s to be sold to its customers. The hoped-for short-term gain would not have justified the long-term hit.

So, as messrs Darling & Co tell us about our future and the US prepares to bail out Citibank (rather than clamp the executives in irons as they did for Enron) we would do well to think about how the structure has to be changed so it won't happen again. As he notes about Whitney:

This woman wasn’t saying that Wall Street bankers were corrupt. She was saying they were stupid. These people whose job it was to allocate capital apparently didn’t even know how to manage their own.

So Mr Darling & Mr Brown, before another £ of my taxes are put their way, I want regime change at the banks the money is going into!

Also, I know if this whole thing sinks our small company, we won't see any bailout money coming in. And yet oddly, if they were more prepared to tell us they'd bail us out from failures due to these bank-caused causes, we'd probably be more prepared to spend and thus boost the economy than anything they can do by any fiddling with VAT etc.

(Hat tip to Howard Lindzon for the link)

One of the memestreams coming out of yesterday's Future of Mobile conference was the lack of women presenting. We've remarked on this issue before in the Netspace, noting that considering how 50%+ of New Media users are women, its odd that so few on the supply side are.

The odd thing is this is getting worse, not better, according to an article in the NYT. Ellen Spertus, a graduate student at M.I.T., wondered why the computer camp she had attended as a girl had a boy-girl ratio of six to one. That was in 1991. She then re-looked at it recently and found:

Computer science has changed considerably since then. Now, there are even fewer women entering the field. Why this is so remains a matter of dispute.

What’s particularly puzzling is that the explanations for under-representation of women that were assembled back in 1991 applied to all technical fields. Yet women have achieved broad parity with men in almost every other technical pursuit. When all science and engineering fields are considered, the percentage of bachelor’s degree recipients who are women has improved to 51 percent in 2004-5 from 39 percent in 1984-85, according to National Science Foundation surveys.

When one looks at computer science in particular, however, the proportion of women has been falling. In 2001-2, only 28 percent of all undergraduate degrees in computer science went to women. By 2004-5, the number had declined to only 22 percent. Data collected by the Computing Research Association showed even fewer women at research universities like M.I.T.: women accounted for only 12 percent of undergraduate degrees in computer science and engineering in the United States and Canada granted in 2006-7 by Ph.D.-granting institutions, down from 19 percent in 2001-2. Many computer science departments report that women now make up less than 10 percent of the newest undergraduates.

Why? Theses include (i) the rise of computer gaming and its strong male ethos, and/or (ii) the celebration of the "True Geek" cultre turns off many women who otherwise enjoy technology, and they pursue other engineering fields (women are roughly 50% of all graduates across the science / engineering space in the US now as they note above, so it ain't ability or bottle).

A worry is that women are now more comfortable in the less macho but lower paid areas like Website design. (An aside - I have noticed that the ratio of women to men in the Social Media space is far higher, if London is anything to go by at any rate - but they do seem to be concentrated in the PR rather than Tech/Operations end).

Readers of this blog will know we follow developments in robotics. Here is one such (from the Daily Mail, via Nick Carr).



AI/IT pioneer Alan Turing devised the Turing Test to define when we may know a device is intelligent - when it can fool a human into thinking it is one. His test was pre internet, so needed Sneakernet (or in his time, Shoenet). The test says that:

....a human judge engages in a natural language conversation with one human and one machine, each of which try to appear human. All participants are placed in isolated locations. If the judge cannot reliably tell the machine from the human, the machine is said to have passed the test. In order to test the machine's intelligence rather than its ability to render words into audio, the conversation is limited to a text-only channel such as a computer keyboard and screen

No one could tell you were a dog on the text internet, it is true. But a project, called 'Human-Robot Interaction', was devised at the Bristol Robotics Laboratory (BRL), run by the University of the West of England and the University of Bristol. A team of robotics engineers - Chris Melhuish, Neill Campbell and Peter Jaeckel - spent three-and-a-half years developing the breakthrough software to create interaction between humans and artificial intelligence.

So look at the above video, and make your guess about how long it will take before machines can pass the Turing test on a video channel. 5 years? 10 years?

On Monday the London VRM (Vendor Relationship Management) Hub put together a first half day workshop, looking mainly at User & Supplier issues (though of course it rapidly broadened into all sorts of other topics). I couldn't make it till later, but reading the blogs it seems a good time was had by all. For my bit in the Great VRM Endeavour, I've been looking at the economics and business models for VRM, and on Monday a number of the key issues it faces emerged. I've tried to summarise the key ones below:

Firstly, the economics of Conversational Markets



Doc Searls, one of the Authors of the Cluetrain manifesto, is the spiritual father of VRM, and one of the key tenets of Cluetrain is all markets are conversations. To a large extent this has been taken on board as a VRM core tenet, and is one of the features that gives it it's unique flavour.

However, the immediate comeback from commercially experienced people is that there is clearly a whole raft of relationships where the transaction costs are high, and / or the surplus value in the product is so low (see diagram above) that any conversation more than "Visa - that will do nicely" is impossible to cost justify. What we will therefore need to show going forward is that VRM can push these barriers back, in 2 ways:

- that VRM allows a sustained conversation such that the cost over a series of transactions are bearable

- that VRM can facilitate additional types of value via conversation (reduced churn, say)

Secondly, there is a debate about whether VRM can be executed by the users alone, or whether it needs to tempt suppliers to collaborate (ie either the gross value of serving all those VRM'ers is sufficienly alluring, vs. There has to be a giveaway to make suppliers use it). Any supplier will have to invest in new equipment /processes to serve VRM customers, so will be looking at +ve ROI. To answer this issue I looked at where the benefits are to the supplier, and they lie in 3 key areas:

Firstly, revenue increase:

- Increased Sales Volumes - if there are enough VRM'ers, then catering to them increases sales volume vs competitors that don't

- Increased Average Revenue per Customer - in theory having a deeper relationship should allow higher prices for higher service values, and higher trust can increase on-selling and cross-selling

Secondly, OPEX reduction:

- Relationships should also transalte into loner customer lifecycle / reduced churn

- Reduced OPEX - advertising becomes more predictable so teh 50% that doesn't work can be reduced, and better customer knowledge allows reductions in production and distribution waste, since more certainty allows better Lean Operation techniques to be used

Thirdly, CAPEX reductions:

- more productive use of existing assets via more efficient understanding of demand

- reduction in future CAPEX via better use of existing services and/or better targeting of future investment

While we can see that VRM can potentially address all these areas - even a small % improvement in each area yields huge increase in value - we are still very much in the "prove it" phase. We need some pilots!

Which brings me on to the third model issue - STL's Martin Geddes was there on Monday (see Doc Searls's summary of some of Martin's thinking over here), we have worked together on 2 sided business models elsewhere in the online service space. Martin's view is that VRM is potentially likely to need a 2 sided model (ie a transacting party in the middle), whereas others in the VRM space feel it is far simpler buyer/supplier relationship.

I suspect there will need to be space for both approaches (and others), in the early days at any rate. There will be a huge wave of experimentation across all the VRM axes in the early days, and we need to run a broad ecosystem so that darwinian evolution can occur. In fact, I chatted about this with Doc Searls the next day, he noted that in his view the "best of breed" solutions to VRM could easily come from a direction nobody has yet imagined, as it does so often in new emerging areas.

An excellent day, with excellent commentary, conversation and creative thoughts - as someone said, this is the coffee houses of London all over again. Kudos to Adriana Lukas for driving it....

I read 2 posts today noting that Barack Obama's victory was largely an Internet driven one. Firstly, Umair Haque has an interesting post on how Barack Obama used modern technologies and ways of organising work to win the election (I've expurgated it a bit):

1. Have a self-organization design. What was really different about Obama's organization? We're used to thinking about organizations in 20th century terms: do we design them to be tall, or flat?

Obama's organization blew past these orthodoxies: it was able to combine the virtues of both tall and flat organizations. How? By tapping the game-changing power of self-organization. Obama's organization was less tall or flat than spherical - a tightly controlled core, surrounded by self-organizing cells of volunteers, donors, contributors, and other participants at the fuzzy edges. The result? Obama's organization was able to reverse tremendous asymmetries in finance, marketing, and distribution - while McCain's organization was left trapped by a stifling command-and-control paradigm.

2. Seek elasticity of resilience. Obama's 21st century organization was built for a 21st century goal - not to maximize outputs, or minimize inputs, but to, as Gary Hamel has discussed, remain resilient to turbulence.

Umair makes the point here that resilience meant developing a superior fund raising system, I wonder if it wasn't the other way round though - or at least more symbiotic.

3. Minimize strategy. Obama's campaign dispensed almost entirely with strategy in its most naïve sense: strategy as gamesmanship or positioning. They didn't waste resources trying to dominate the news cycle, game the system, strong-arm the party, or out-triangulate competitors' positions.

4. Maximize purpose. Change the game? That's 20th century thinking at its finest - and narrowest. The 21st century is about changing the world. What does "yes we can" really mean? Obama's goal wasn't simply to win an election, garner votes, or run a great campaign. It was larger and more urgent: to change the world.

Bigness of purpose is what separates 20th century and 21st century organizations: yesterday, we built huge corporations to do tiny, incremental things - tomorrow, we must build small organizations that can do tremendously massive things.

5. Broaden unity. What do marketers traditionally do? Segment and target, slice and dice. We've become great at dividing markets into tinier and tinier bits. But we're terrible at unifying them. Yet Obama succeeded not through division, but through unification: we are, he contended, "not a collection of Red States and Blue States -- We are the United States of America".

6. Thicken power. The power many corporations wield is thin power: the power to instill fear and inculcate greed. True power is what Obama has learned wield: the power to inspire, lead, and engender belief. You can beat people into subjugation - but you can never command their loyalty, creativity, or passion. Thick power is true power: it's radically more durable, less costly, and more intense.

7. Remember that there is nothing more asymmetrical than an ideal. Obama ended his last speech before the election by saying: "let's go change the world." Why are those words important? Because the world needs changing. A world riven by economic meltdown, religious conflict, resource scarcity, and intractable poverty and violence - such a world demands fresh ideals. We must mold and shape a better world - or we will surely all suffer together. As Obama said: "we rise or fall ... as one people."

Very interesting thoughts, and I think Umair has described very well a number of the emerging principles of influence in the networked world which are well worth keeping in mind.

Secondly, Wired argues that the victory was "Internet Propelled":

Volunteers used Obama's website to organize a thousand phone-banking events in the last week of the race -- and 150,000 other campaign-related events over the course of the campaign. Supporters created more than 35,000 groups clumped by affinities like geographical proximity and shared pop-cultural interests. By the end of the campaign, myBarackObama.com chalked up some 1.5 million accounts. And Obama raised a record-breaking $600 million in contributions from more than three million people, many of whom donated through the web.

"He's run a campaign where he's used very modern tools, spoke to a new coalition, talked about new issues, and along the way, he's reinvented the way campaigns are run," says Simon Rosenberg, president and founder of the nonprofit think-tank NDN, and a veteran of Bill Clinton's first presidential campaign. "Compared to our 1992 campaign, this is like a multi-national corporation versus a non-profit."

.....

The campaign also launched web pages and online action groups to fight the underground, e-mail whisper campaigns and robo-calls that surfaced in battleground states. In one effort, the campaign urged supporters to send out counterviral e-mails responding to false rumors about Obama's personal background and tax policies.

In fundraising, Obama followed in the footsteps of Howard Dean's 2004 bid by regularly soliciting small donations from a wide swath of voters, raising record amounts online by federal filing deadlines. He then used this money for more traditional campaigning — for example, flooding cable markets in strategic states with television advertising. Obama spent a record-shattering $293 million on TV ads between January 1, 2007, and October 29, 2008, according to TNS Media Intelligence. McCain spent $132 million during the same period.

In many ways, the story of Obama's campaign was the story of his supporters, whose creativity and enthusiasm manifested through multitudes of websites and YouTube videos online. It even resulted in volunteer contributions like the innovative Obama '08 iPhone and iTouch application that enabled owners to mobilize their friends and contacts in battleground states through the Apple devices.

Not wanting to take anything away from Mr Obama's Victory 2.0, but I do think there were some things going on that were not just Internet / Social media driven, and more part of bigger things - he was paddling down the flow of river of time, the Zeitgeist wanted a change.

Firstly, the Crunch helped hugely - Mr Obama's stock in the prediction markets rocketed after that (see graph here)

Secondly, I suspect that the events of the last few years ( 2 wars for starters ) created an environment where these techniques spread his message more easily.

Thirdly, I'm not certain re Umair's point re finance asymmetry. Obama outspent McCain by a significant amount - $640m to $340m - I'd argue that a big driver of his victory was being able to liberate more money, as the Wired article notes.

In fact, that is the biggest takeaway to me from Umair's and Wired's analysis - if you can build a system that can take in $2 for your opponents every $1, AND you can surf the Zeitgeist, the rest will probably slip into place fairly nicely.

Anyway, he will need all the politics 2.0 capability going forward, because he inherits a very, very tough task. He needs to be FDR, JFK and MLK rolled into one. And I hope all those people who put him in stay with him in the worst times to come, their support is needed not just for election.

This is uncanny - no sooner do we see rational behaviour break out with respect to copyright, but now we see it in patents - the Court of Appeals for the Federal Circuit (CAFC) (aka the patent court) has changed a ruling it made in 1998 about business process patents. Says Reuters:

Business methods were widely considered unpatentable until a 1998 ruling by the same appeals court. The U.S. Patent and Trademark Office issued 1,330 such patents last year, up from 120 in 1997, according to figures on its website.

One of the best known examples of a business method patent is Amazon's (AMZN.O: Quote, Profile, Research, Stock Buzz) one-click process to buy goods on the Internet.

Bernard Bilski and Rand Warsaw had challenged the U.S. Patent and Trademark Office's rejection of their request to patent their method for managing the risk of sudden movements in energy costs.

Bilski and Warsaw founded the company WeatherWise to sell services based on the method used by some utilities. The U.S. patent office rejected their patent application in 2000 and the patent board upheld the rejection in 2006.

Erika Arner, a patent attorney with law firm Finnegan LLP, said that many business method patents would now be vulnerable to attack as invalid.

As I noted in an earlier post, I disagree with the Techdirt team on "FreeConomics", but in this area I agree 100% when they comment:

This ruling will, however, send serious shockwaves through pretty much every industry -- because software and business method patents are found just about everywhere. Companies that rely on such patents (such as patent hoarding companies) may have just found out their current business model is about to go away. An awful lot of patents are now about to be invalidated, and a lot of patent lawsuits may get thrown out as the patents do not meet the criteria set forth in this decision.

You can bet, however, that the supporters of widespread software and business method patents will not go down without quite a fight. Beyond appealing the decision, it's likely there will be a push for a different type of patent reform in Congress that will expand the patent system to allow software and business method patents. There will be ridiculous announcements from companies that have chosen to litigate rather than innovate, claiming that they cannot innovate (even though they weren't) without much broader patents that they were actually using to hinder innovation.

Indeed - let the games begin - but the pendulum, methinks, is still swinging back to rationality, as we suggested a few months ago.

Rory Cellan Jones of the BBC on the doom and gloom in the tech markets:

The reaction to this state of affairs by some is to decide that technology no longer matters and that the process of change will now go on hold for a few years. Or, as a colleague put it after overhearing me discuss some new smartphone: "The world is falling about our ears and all you can talk about is your silly little gadgets."

I think that is short-sighted. We are right in the middle of some fascinating shifts in the way we use technology - from the rise of social networking, to the mobile internet and the advent of cloud computing.

Last time we had a serious downturn in technology investment at the beginning of this decade, the world did not stand still. In a harsh climate, smart new ventures - from last.fm to Skype - were born, and consumer behaviour was transformed by the arrival of broadband.

Agree wholeheartedly - I was there in The Dotcom crash, companies collapsed left right and centre, but the 'Net just kept on growing. The Internet is arguably the most profound structural shift in society for probably 100 years, since the telephone/motorcar shift - and like all other great revolutions in communications, it will impact globalisation, energy usage and politics far more than they impact it.

And like all those revolutions (think railways, telephones, etc) there were always big booms and busts, but they kept on growing - and this one ain't going away soon either. Nor is Da Money, because:

- Attention online is far higher than Adspend - its difficulties with the metrics that are keeping it from flowing faster.

- There is still a lot of money in the big players

- In tough times companies start to fix things which they leave alone in good times, and cost is king - and this technology has huge cost advantages across the supply chain over older ones

- Dumb money is driven out, so less crap is funded, thus good ideas and companies have a better chance.

And the NASDAQ is still 50% up on the dog days of 2002 - now, that was a really tough market!

On a related topic, The Grauniad's Jemima Kiss wonders if its The End of Free. Now, as readers will know, we are very sceptical of the huge reliance on FreeConomics in the techworld (start here), but it has a place in early stage startups - where it gets hard is relying on it as a run-time model when credit is gone. So yes, if you are building a me-too service based on a FreeConomic biz model with no reason for an offset subsidy from someone with deep pockets, you are very probably f*cked.

Fred Wilson asks why companies in the main are not buying back their shares:

In bad bear markets, like we are in, investors look to corporations to defend their stock and Google has not yet shown an interest in doing that. That's something to look for. When you net out Google's cash, it's trading at $100bn, a mere 12x operating cash flow. That's value territory.

Let's look at News Corp. Rupert Murdoch's company, the best managed media company out there, is down 56% in the past year and is now trading at a mere six times operating cash flow. News Corp is also about 60% institutionally owned. So that means Rupert could buy out his external investors with four years of his cash flow. But we have yet to see him do that.

I could go on and on. Apple is worth $67bn after you back out the $20bn of cash they have on hand. It earns over $5bn a year. That's another value stock right there.

And those are some of the best US companies right there. The list goes on and on. Starbucks trades at 7x cash flow, Walmart trades at 10x cash flow, AT&T trades at 4x cash flow, and Comcast trades at 6x cash flow.

Anyway, the answer to Fred's question is actually probably contained in the second part of Fred's post:

The long-term effects of the Panic of 1873 were perverse. For the largest manufacturing companies in the United States — those with guaranteed contracts and the ability to make rebate deals with the railroads — the Panic years were golden. Andrew Carnegie, Cyrus McCormick, and John D. Rockefeller had enough capital reserves to finance their own continuing growth. For smaller industrial firms that relied on seasonal demand and outside capital, the situation was dire. As capital reserves dried up, so did their industries. Carnegie and Rockefeller bought out their competitors at fire-sale prices. The Gilded Age in the United States, as far as industrial concentration was concerned, had begun.

In other words, why buy your own stock when you can buy your competitor and take them out the market to boot? Also, 30% is not a big fall by "Panic" standards. I've shown the Dow graphed above for 1929 - 1933, courtesy About.com . Economists and experienced business people are well aware that in a big recession, cash is king - so I would expect all those cash rich corporations to be fully aware as well. Why buy back at 30% down when there is a real chance of buyback at 50, 60, 70% down? Also, they will want to see what their revenues look like at near bottom rather than as they go into it.

So what will the big Tech boys do with their cash - clearly reinforcing current positions and moving into complementary areas are easy wins, maybe take out the odd major competitor....if Google fell another 50% relative to Microsoft, the boys from Redmond could buy it for a song .

Interested in this NYT article on Kleiner Perkins (The Silicon Valley VC firm) doing well by doing good in the Green world. In essence, they believe that many promising technologies have been stifled because of the cheap fossil energy over the last few decades, and a bit of VC money now would get them ready for (profitable) launch into the straightened times looming. Cometh the higher energy prices, cometh the hour of the Green Startup.

There is no doubt some truth in this - I recall studying green and appropriate technologies in my undergrad and post grad years in the mid 80's, and most of the core Green technologies were around then. A lot of refinement - mainly in materials science and application of ICT and BioTech - has occurred since those days of course.

But there are also a few reasons to be sanguine about all this:

(i) "Green" always gets to the top of the agenda at the tail-end of an economic boom, and disappears as belts tighten again. Its a "luxury philosophy"for most people in the OECD world (or possibly a counter-philosophy when all around are losing their heads in their search for material goods).

(ii) If the past 3 decades are anything to go by, a lot of the economic benefit in Green Tech comes either from the arbitrage of artificial regulations (subsidies etc) which are more often driven by political expediency (a "green tax" on 4x4 cars for example) or fairly useless (from a Green impact point of view) plays on people's guilt. A Prius car, for example, uses less energy to go, but consumes far more energy and dangerous minerals in its manufacture to do so than it will ever save compared to a standard car. Net net, buying a gas guzzling second hand car has a far more +ve energy balance.

(iii) This regulatory largesse can wax and wane with political and economic priorities, so a smart tech today may be uneconomic in 5 years time because the rules have changed - as the NYT article note, Kleiner Perkins now have to keep a close eye on the developments of schemes like Carbon Trading.

The question therefore will be whether this is all a "top of boom" thing, or whether there is a lasting difference this time. As the NYT notes:

What intrigued me most about Kleiner’s plans, though, wasn’t whether its green-tech investments would (or would not) reap huge financial returns, but whether this country’s private sector, spurred primarily by venture capital, could start to change the way the U.S. and the world use energy.

And whether its actually solving the problem.

By and large, to actually solve the systemic "Global Warming / Energy usage" problem holistically requires energy reduction, as merely replacing energy sources but keeping consumption at current levels doesn't reduce the amount of energy pumped into the planetary ecosystem (especially when you take the aspirations of emerging peoples into account). Its also a closed system, so a give here requires a take someplace else. Biofuels are a case in point - replace fossil fuels with biofuels (economically profitable only because of artificial subsidies) also takes food growing land out of production, increasing food prices for the poorest to a level where they face real starvation - thus requiring more energy and chemical intensive farming of the remaining land to feed the new mouths. Also, starving peasants in poor countries then cut down more rainforest to feed themselves.

Thus "Real" Green solutions - ie ones with high long term value - require two very simple, but very unpalatable things - companies using less energy, and consumers using less energy. For companies that means making (and packaging) fewer we things don't want and far less distributing things over long distances, and for consumers it means less car journeys and less home heating / cooling. Since making and pimping a wide variety of largely un-needed stuff is the major economic driver of business growth, companies won't vote for that. And since we prefer cars to buses and comfort to discomfort, consumers are not going to vote for it either.

So, in summary - funding people to improve current Green technologies, and thus reducing the usage of fossil fuels and also increasing the efficiency of energy conversion is a Good Thing, but in and of itself its not enough, and the players in the game are by and large not motivated to fix it.

For this reason, to really make a difference involves actions far above the start-up layer, ie at Governmental and International level. However, given the shilly-shallying over Kyoto etc, there is an argument that says the best way to save the planet in the short term is simply to give rich Westerners less money to spend on un-needed goods and heating, so from that point of view the current credit crunch is the Greenest thing yet invented

Update - I later recalled this article of a few months ago, arguing that Kleiner was going Green more as part of a diversification strategy out of high tech than anything else (and Green gets you great PR too....bonus!) but this NYT article gives the impression of a much bigger shift.