@Revolution:Global Business News

New Economy, Leadership, Entrepreneurship, Management, Global Business

Technology – Boom, Bust & Beyond

Posted by iBlog on August 9, 2007

In 1876, the president of Western Union brushed off Alexander Graham Bell’s telephone as little more than an “electric toy,” and the company called Bell’s proposal to put one in every home “utterly out of the question.” Oxford University professor Erasmus Wilson predicted that when the 1878 Paris Exhibition closed, the electric light would “close with it and no more will be heard of it.” A Michigan banker advised his client not to invest in Henry Ford’s company in 1903 because “the horse is here to stay, but the automobile is only a novelty.” And Microsoft founder Bill Gates freely admits he was years behind in seeing the promise of the Internet. If the past two centuries are any guide, great technological innovations–railroads, telegraph, telephone, electricity, cars, radios, the personal computer–must overcome initial skepticism, if not abject fear, before they can take root. But then there is the inevitable cycle: Entrepreneurs begin to recognize a novel technology’s potential; newcomers rush into the market, drawing venture capital, which in turn spawns even more companies and investment. Because stock price in this phase is pegged to possibility, not revenue and profit, almost all of the players do well, even though most, if not all, bleed red. Some succeed spectacularly at this Ponzi-like scheme. Share prices shoot skyward in a speculative frenzy.

Read the full article in Fastcompany.com


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