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Friday, March 14, 2014

Bill Gates: Most Startups in Silicon Valley Are "Silly"

Posted By on Fri, Mar 14, 2014 at 1:03 PM

click to enlarge Plenty to go around
  • Plenty to go around

It may not be a $19 billion idea, but local startup QuiQui has figured out how to score free publicity: its business model, delivering prescription drugs and other items from the local pharmacy via drones, is getting attention today.

While it may sound goofy or ridiculous, the notion is only silly as long as it's not lucrative (QuiQui is is also advertising its quest for investors). And if it is doltish, it has some company: most plans coming out of Silicon Valley today are silly, according to the world's richest man.

In a Rolling Stone interview, Microsoft founder Bill Gates -- all $76 billion of him -- made the pronouncement that a majority of tech startups are doing dumb shit.

But among the rafts of shit, there's the next WhatsApp.

Facebook's $19 billion buy of WhatsApp is the Instagram of today -- remember when $1 billion for some old-looking photos sounded like a lot? -- and the current yardstick by which Silicon Valley acquisitions will be judged, Gates told the magazine.

And that buy was not dumb: despite paying more than, say, Gates himself would have paid, Facebook CEO Mark Zuckerberg's bold buy of the mobile messaging platform is a bold move of the kind Microsoft made in the '90s, when it was flush with cash, too.

The fact that there are duds among the startups seeking capital in this current tech Gold Rush shouldn't be surprising. And to Gates, it's not even a big deal.

He speaks:

"Innovation in California is at its absolute peak right now. Sure, half of the companies are silly, and you know two-thirds of them are going to go bankrupt, but the dozen or so ideas that emerge out of that are going to be really important."

WhatsApp's value, Gates points out, was in its giant user base. In other words, a banal or simple idea may be the best one, if numerous other people will buy into it.

Is delivering goods via drone silly? Possibly. But if it takes off, not so much -- and either way, hard to argue with a pile of silly money.

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About The Author

Chris Roberts

Chris Roberts has spent most of his adult life working in San Francisco news media, which is to say he's still a teenager in Middle American years. He has covered marijuana, drug policy, and politics for SF Weekly since 2009.

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