Al Kenrick is a senior vice president and regional manager of the Growth Technology regional commercial banking office in Palo Alto, Calif., for Wells Fargo. He will be speaking at CED’s Emerging Trends inInnovation and Capital September 8, 2011, from 3:30-7 p.m. at Bay 7, American Tobacco Campus, Durham, NC. Al spoke with Joan Siefert Rose, CED president.
CED: We’ve been reading about billion dollar valuations for tech companies in Silicon Valley. Are we on the verge of a tech bubble similar to a decade ago?
Kenrick: I tell you, the valuations are high, but these are very good companies attacking very big markets. It’s a bit of a frothy atmosphere, but it seems very different than it was back in the dot-com boom days.
CED: How are these companies better?
Kenrick: For the most part, they have revenue, and experienced management. Most importantly, what’s happened is with the convergence of social media, mobile computing, and the evolution of the digital media space, these companies have business models today that are effective.
CED: What stands out about the business models?
Kenrick: The companies that are doing well are delivering software for business processes or consumer services and goods, and leveraging the power of the Internet and scale of the Internet. There is a lot of advertising revenue that is driving the value. It’s still early days for this switch to digital media and how ad dollars are spent and how consumers consume. If you look at traditional media companies, they are in bankruptcy. Someone is eating their lunch.
CED: A lot of us look to Silicon Valley to give us an indicator of the next big thing. Where are the new opportunities going to be?
Kenrick: On the tech side, there are three things: First, there’s the convergence of mobile and social and executing the right business plan. Second, there’s the move to the cloud – that’s been under way for a while now. And lately, it’s digital gateways to the home. That space is really starting to heat up now. The technology works so well, and consumers are getting used to it.
CED: Any advice for tech entrepreneurs just starting out?
Kenrick: Be creative and think mobile. And be prepared for a very fast pace of changing technology. Remember, even the iPhone isn’t that old, but now everyone expects that level of connectivity. Consumers adapt much faster than in the past.
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