After 15 years of Foolishness, we've certainly learned two things:
- Stocks are the world's greatest wealth generators, in good times and bad.
- Innovation never sleeps.
No, really, it doesn't
Think of how durable some of the world's innovators have proved to be. IBM (NYSE: IBM ) , founded in 1889, has survived two Wall Street panics, two world wars, a Cold War, a Great Depression, an oil embargo, nuclear proliferation, the dot-com bust, and more. Today, Big Blue is a $125 billion company, a stock market superhero.
Forward-thinking tech companies transform industries. For IBM, tabulating machines forever changed how the U.S. Census would be conducted. For Intel (Nasdaq: INTC ) , founded in 1968 by Fairchild Semiconductor refugees Gordon Moore and Robert Noyce, the microprocessor -- invented in 1971, at the height of the Vietnam War -- forever transformed computing.
Bill Hewlett and David Packard met at Stanford University, where they graduated in 1935, in the midst of the Great Depression. Four years later, on Jan. 1, 1939, they created Hewlett-Packard (NYSE: HPQ ) with an initial investment of $538. Disney used the company's oscillators for the theater sound system built for 1940's Fantasia.
Can you imagine having invested in any of these companies early on? You might not be Buffett rich, but you could be David Beckham rich. Either way, innovation never sleeps because it can't afford to -- business depends on the forward march of technology to either lower costs or enhance revenue.
Two paths down the road to value
Examples abound. VMWare (NYSE: VMW ) has grown massively because its virtualization technology improves efficiency, by allowing one server to do the job of three or more. Efficiency leads to lower hardware costs and, thereby, less power and cheaper maintenance.
Google, on the other hand, has created a mammoth revenue-enhancing mechanism with AdWords and AdSense. But you knew that. What you might not know is that the Big G was founded in 1998, which means that Larry and Sergey, two years into their lives as Silicon Valley entrepreneurs, had a front row seat to the digital sonic boom that was the bursting of the dot-com bubble.
So if history tells us that innovators win in both good times and bad, what issues might technology address in the next 15 years of the life of The Motley Fool? I've three ideas:
- Customized entertainment. Am I the only one who thinks TiVo (Nasdaq: TIVO ) has spoiled us? You can literally record segments of shows that you like. Same with YouTube, where you can view minutes-long snippets of entertainment that makes you laugh, cry, or feel smart. Couple that with pressure to squeeze more stuff into an already jam-packed 24 hours, and you've created demand for finely tailored entertainment, the sort of my-size-fits-me programming that Don Peppers and Martha Rogers wrote about in their 1996 book, The One to One Future.
- The network is (insert tired cliche here). Can we finally admit that former Sun Microsystems (Nasdaq: JAVA ) CEO Scott McNealy was on to something when he said that the network is the computer? Yes, it's an amorphous idea. Yes, networks have existed for decades. But we've only begun to tap the idea of connected, collective intelligence in systems such as Motley Fool CAPS. What will we learn when, in the next 15 years, these networks expand to touch other networks? Will crowds continue to be as wise as we think? We can't know the answer. All we know is that Metcalfe's Law, which describes the value of a network as equal to the square of the users connected to it, shows no signs of wearing thin.
- Nanotech, nanotech everywhere. The history of technology points to miniaturization: smaller phones, smaller PCs, smaller entertainment systems. Even the MacBook Air, for goodness' sake. The pace of miniaturization is such that, at some point during the next 15 years, nanotech tools will have to emerge -- tools that bend the rules of visible physics to create subatomic tech miracles. Harris & Harris (Nasdaq: TINY ) is investing in preparation for that day.
The Foolish bottom line
Will I be right? Let's talk in 15 years. And, in the meantime, realize that while most stocks are trading lower, not all of them deserve to be. Take a long-term focus. Think a decade or two ahead. Make investments that can last a lifetime, as we aim to do at Motley Fool Rule Breakers.
We're not so much interested in the Next Big Thing as we are ways in which tech can better serve customers. That's why several of us rebels are in Silicon Valley this week; we're talking with top tech companies and investors about the opportunities I've identified above, plus many more. Care to get access to our findings? Click here to enter your email address, and we'll send you our updates as soon as we publish them.
Fool contributor Tim Beyers owned shares of Harris & Harris, IBM, and Google and had a position in Google's 2010 LEAPs at the time of publication. He's also a member of the market-beating Rule Breakers team, which counts Google, Harris & Harris, and VMWare among its picks. Intel is an Inside Value recommendation. Disney is a Stock Advisor choice. The Motley Fool's disclosure policy had a very dry martini last night and wonders whether vermouth is really necessary.