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I have survived another Consumer Electronics Show. No small achievement. But it has taken me nearly a week to recover and tell the tale. The Consumer Electronics Show has gotten so large -- so out of control -- that it will undoubtedly break apart under the weight of its own mass. Conference organizers were predicting that 140,000 people would come to Las Vegas for CES this year. But I'm betting they missed by a couple tens of thousands. Quick trips from the convention center to any hotel on the strip took 45 minutes when they should have taken 15. And the line for free ice cream at the Yahoo tent was backed up all day, every day. I heard one blogger at the airport say to a friend that he spent the day at PodTech's BlogHaus rather than contend with the crowds (I myself took refuge at the BlogHaus on a daily basis -- they had the winning combination of copious drinks, snacks and bandwidth).
All the whining aside, CES was jam packed with gadgets, technologists and big giant TV's. That's right. Once again, CES was absolutely dominated by Televisions. LCD TV's. Plasma TV's. Home Theater projectors. My partners Andy, Vivek and I wandered the conference floor obsessively comparing TV's. We got right up close and looked at the consistency of color. We stood back and looked at motion blur. We debated the extent to which differences in displays were the results of actual technical superiority or merely better tuning. We checked out Sharp's 108 inch LCD TV (for those keeping score at home, last year's colossal TV king was a 103 inch plasma but this year LCD claims the bragging rights). We enjoyed Panasonic's use of plasmas in their booth for window panes, picture frames and a blazing fire.
And the winners are? None of the above. There weren't any clear winners in TV land this year. I suppose if there were any winners, it was the consumers. There were a panoply of stunning televisions on display. Technology is getting better. Prices are going down. That's undoubtedly a winning combination for TV buyers. That said, there were three TVs that I left the CES floor excited about. First, Sony was showing the thinest, most beautiful little OLED (Organic LED) displays you've ever seen. Sadly, they aren't yet in production. But when they are, they're going to be big sellers. They had extremely vibrant colors, a stunningly precise picture (with a 1,000,000 to 1 contrast ratio), and a form factor that can not be beat. I really want one. Second, as beautiful as some of these flat panel TVs are, the best pictures on the show room floor came out of a high end projector. Optoma was running the perfect scene from "Phantom of the Opera" to show off their amazing HD81 projector. The quality of the picture was unrivaled by anything I saw on the showroom floor. Sure, at ten thousand dollars or so, it isn't cheap. But for those of you with an empty basement and an old car to sell, this projector is the way to go. And Third, my partners and I were thrilled to see beautiful TV's on display using the single panel LCOS (liquid crystal on silicon) technology from our own portfolio company MicroDisplay. Both Akai and Memorex will soon be manufacturing MicroDisplay enabled Full HD TVs that will be priced hundreds of dollars cheaper than the next closest 52" and 62" Full HD TVs.
It was not, however, the fancy new televisions that I found most compelling at this year's CES. It was the amazing disappearance of TV wires. Several companies were demonstrating wireless systems for high definition televisions. It reminded me of the initial hints of wireless audio several years ago at CES. The first year there was a single dedicated Yamaha system demonstrating wireless audio. The next year wireless audio was scattered throughout the convention center. And the following year it was everywhere. I imagine we'll see the same trajectory for wireless video. This year there were a few manufacturers demonstrating wireless televisions (several of which were powered by our own ultra wideband portfolio company Tzero). Next year I anticipate that it will be everywhere -- built directly into TVs, in stand alone systems, as part of set top boxes. Wireless video is a no brainer. Imagine the ease of installing a flat panel on the wall if you don't have to worry about burying the wires in the wall. (Now if only someone could come up with a system that safely and efficiently delivers wireless power.) I guess I'll go back to CES next year. If nothing else, to see the proliferation of wireless video -- and party like its 1999.
I can't decide what is making it harder for me to write this morning. Is it the fact that I am still completely exhausted after a weekend of too little sleep and too much mental stimulation? Or is it the more mundane fact that God-awful music is blasting out of my speakerphone courtesy of the now 57 minutes I've been on hold with Bank of America credit card services? I'm going to go with mental overload because I refuse to cede the power to communicate to B of A musak.
This weekend I was privileged to attend Tim O'Reilly's FOO Camp. FOO stands for "Friends Of O'Reilly" but the crowd is only a small subsection of those who count Tim as a friend. Tim has long been not just a uncanny predictor of future technology trends but a supporter and promoter of both those technologies and the individuals responsible for inventing them and shepherding them from concept to phenomenon. The individuals present at this year's FOO Camp had played significant rolls in the creation and dissemination of some of the most important technologies over the past decades (from Lotus 1-2-3 to Perl, Python, Ruby, Flash, you name it). But the conversations of FOO Camp were clearly pointed at the future, which leaves one's mind spinning.
One of the things that is striking about FOO Camp is that nearly everything that takes place over the weekend is collaborative. Talks are rarely lectures -- they are conversations. Ad hoc projects at FOO take interesting twists and turns because they are necessarily interdisciplinary, driven by experts in hardware, software, networking, who are encouraged by the environment to think out of the box (a child of FOO's inventive environment was unveiled at this year's gathering -- Chumby is an open source hardware and software platform that truly embodies the collaborative and interdisciplinary nature of FOO). As I wandered around O'Reilly's campus Saturday night I was struck by the incredibly inclusive, social and creative energy everywhere -- in one room a group of folks were singing and strumming Simon and Garfunkel tunes, in another a crowd was engaged in their 5th or 6th hour of Werewolf, on the patio a few pyromaniacs enjoyed a fire sculpture involving propane and a zen sand garden, others gathered 'round the laser in Make Magazine's office engraving their laptops and cell phones with various a sundry images and insignia.
Two of my favorite sessions during FOO Camp were further testimony to the collaborative nature of the weekend. One of the "talks" was entitled "Halfbaked.com: entrepreneurial improv theatre." It was organized by Dave McClure, Paul Rademacher and James Levine, who had the great idea of randomly assigning teams of participants two word company names and, with fifteen minutes of preparation time, having them then present their business plans to a panel of VC judges (namely, me and Paul Graham). The results were clever and funny and felt sufficiently close to my day job as to be a little disconcerting. The winning team pitched Bottlecap Porn, fully functional (if somewhat under-featured) website and all. The other session I can't stop talking about was called "That Sucked," which was organized by Joshua Schachter. In Joshua's session, he started off by telling about times he'd been faced with technical challenges that really sucked. He then opened up the floor to the crowd to share their stories. The tales of woe expounded were like a history of computers gone bad, from printers shooting parts across the room to infinite loops to missing source code (the inspiration for SourceForge). They were simultaneously the geekiest and funniest stories I'd heard in some time. And like the "Halfbaked" session, virtually everyone in the room participated, making the session all the more illuminating and entertaining.
I hope that Tim and the entire O'Reilly organization get as much out of FOO Camp as do the participants. We all certainly owe him a debt of gratitude for hosting this incredible event.
Post Script: I hung up on Bank of America after being on hold for 190 minutes! I hope there is less of a wait when I call to cancel my card.
I spent today wandering around the convention floor at the Consumer Electronics Show (CES) in Las Vegas. While Comdex has suffered a painful decline in relevance and attendance (I frankly don't know which came first), CES remains a vibrant show. Vendors ranging from Sony to Pentax to Monster Cable share the convention floor with less obvious demonstrators like the United States Post Office. While it is not quite the spectacle of E3, some rooms certainly give it a sonic run for its money.
As we arrived at CES this morning, there were a crew of men and women dressed in tuxedos and black dresses. Maybe 20 strong, they stood silently in formation, two by two, all wearing sun glasses that obscured their eyes. It was entirely unclear what purpose they served. The woman beside me in line speculated that they were an acapella group. Sadly, they did not sing. Rather, shortly after we arrived, for no particular reason, at no particular prompting, and delivering no particular message, the men and women in black left.
Bill Gurley's newest Above The Crowd updates Adam Smith's idea of the invisible hand. The digital hand, in essence, is the force of Moore's law and Internet time gradually wending its way through various industries, entertainment and consumer products most recently:
Like Smith’s invisible hand, the digital hand is a true boon for the consumer, ensuring that fabulous products will be delivered in the most convenient way, and at ever lower prices. However, there is one big difference. The invisible hand suggests that both companies and customers can profit simultaneously. The digital hand is not nearly as charitable to the companies involved. In fact it can be downright brutal.
Bill analyzes the effects of all consumer electronic differentiation turning into standard features of readily available (and extremely cheap) semiconductors. He believes the $44 DVD player Wal-Mart sells today ("It plays DVDs, CDs, and MP3’s. It can decode Dolby Digital and Dolby DTS, and supports S-Video output.") is only the beginning and very much echos David's recent sentiments about the inflection point we're hitting in consumer devices:
As we look towards the future of the consumer electronics industry, the digital hand will ensure two realties. First, consumers will be blown away by the incredible products they are able to buy at shockingly low prices. Second, companies will be blown away by how incredibly hard they have to work in a shockingly competitive industry. Never forget that the undisputed leader of the PC industry has a supply chain and distribution advantage, not a technological one.
You know that computers have taken over your life when they invade the Happy Meal. The evolution of the Happy Meal toy has been a fun one to watch. The Happy Meal chatchki has slowly evolved from a simple piece of injection molded crap, to a piece of injection molded crap that lights up, to a piece of injection molded crap with a microprocessor. The first microprocessors I noticed in the Happy Meal were used to make some Disney character talk. It didn't demonstrate much silicon horsepower, but there was a chip in there. But the latest Happy Meal toy is a different story. It is a full fledged video game. It's not a very complicated one, but it's a video game nonetheless. It has an LCD screen. It has animation. It beeps in multiple tones. And there's real game play. Frankly, it's not that much less sophisticated than the handheld football game I used to play for hours on end as a kid.
The microprocessor has come an incredibly long way when it is inexpensive enough to make its way into millions of throwaway toys that come free with a $2.98 meal. It bodes well for the evolution of technologies like RFID that will require the manufacture of microprocessors on massive scale at a cost of a fraction of a penny. The power of Moore's law never ceases to amaze me. But I suspect it will be second nature to my Happy Meal eating kids.
Earlier this week, the Wall Street Journal wrote about chip companies again becoming an interesting sector for venture investing [via Corante]. Venture firms with expertise in the sector (Sequoia and Kodiak are mentioned in the article but there are many more than you'd expect, including our own August Capital) continued to invest in the space throughout the dot com 90's. But as the 90's wore on, there just wasn't a whole lot to invest in.
My partner, Andy Rappaport (who has certainly been involved with a fair share of semiconductor companies over his career), has made the observation that one of the biggest problems with the internet bubble was that it rewarded the shortest-term investment projects. When anyone could go from first funding to IPO in a year, why build a product (like a new kind of chip) that takes 2-3 years to create? Given the economics, it was hard not to be lured by the quick riches.
So yes, semiconductor investing is back to a more normal pace and that's a good thing for everyone. But more importantly, longer-term technology development can again get the resources it needs. And that's a great thing for everyone.
Forbes just released their recurring 25 Fastest Growing Tech Companies piece. A fair number of not surprising companies like Ebay, WebEx and Mercury Interactive. But quite unexpected (at least for me) were two memory companies -- Lexar Media (which came in at number three) and SanDisk.
The digital photography market continues unabated. Just last week I purchased the current geek favorite, the Pentax Optio S, and it's so small I take it with me everywhere. Of course, I immediately bought more memory (it takes SD memory whereas my other cameras take compact flash). Unfortunately, SD seems a cycle behind compact flash and I could only find 256mb cards.
Now if only image management software would get better.
