The Internet Is Broken, Silicon Valley Ethos, And The Bubble That Wasn’t: Tales From The Sierra Ventures CIO Summit

I spent most of an interesting day and half at the Sierra Ventures CIO Summit and thought I would share several insights.

First, yes, the Internet is broken. At least according to Stephen Hoover, chief executive of Xerox’s PARC research center.

And yes, the summit reflected the collaboration that along with fierce competitive defines Silicon Valley, the world’s premier tech center. Finally, as to the social media bubble, it doesn’t exist, says defiant angel investor Ron Conway (pictured).

Let me start my explanation of the above by pointing out that last week’s summit did not take place in Puerto Vallarta, Mexico. That was David Hornik’s annual Lobby Conference, which much to the relief of August Capital appeared to dodge the brunt of Hurricane Jova to go off on time.

Sierra’s lack of an equatorial location didn’t much matter. Its insights made traveling to the tamer surroundings of the Palo Alto Four Seasons worth the trip. And no sand in your toes.

To their credit, Sierra’s GPs picked startups to pitch to the roomful of 62 CIOs not just from their portfolio, but from the portfolios of Andreessen Horowitz, Lightspeed Venture Partners and other VCs. It was an example of the best of valley cooperation.

Included was non-Sierra backed ride sharing company Zimride, whose co-founder, John Zimmer, stated the obvious about his invitation to talk: “It’s a true testament to the ethos of Silicon Valley.”

But then, not every message at the event was uplifting. Proof of this was Hoover’s claim that the Internet is broken. Here is his reasoning:

The architecture of the Internet is more like the old telephone network than a 21st Century grid built for the fast delivery of content. Switches and routers are point-to-point devices. And delivering content from centrally located servers to dispersed consumers requires a lot of point-to-point hopping. The solution: routers that cache content locally and know where to retrieve it, something Hoover calls “content centric networking.” After all, the price of storage is falling faster than the price of bandwidth.

While many believe Internet valuations are at bubble heights, summit keynoter Conway is not one of them. Prices may be ahead of themselves, concedes this SV Angel general partner, but companies such as Twitter, Facebook and Groupon “will catch up with the lofty valuations of today and surpass them.”

In other words, Internet software companies haven’t even scratched the surface of the opportunities ahead of them, he said. “I really do think it is the early days.”

He could be right. And that is why we attend industry events – to look at every side.