Unless you've been living in a cave the last few weeks, you've heard about what's going on down on Wall Street.  Solid banks, once the epitome of stability, are crumbling as if a shovelful of dry dirt in a desert.  Bear Sterns, Lehman Brothers, Merrill Lynch, Washington Mutual are no more.  The investment banking model that survived for so many years is gone.  That safe job is no longer safe.  Yes, the world is a different place. 

And that can be a good thing.  After all, you can't keep holding onto buggy whips when Model T's are cheaper, faster, and better.  Old business models will get disrupted as we figure out new ways to do old things, new ways to do new things, and repurpose old ways to do new things.  And that's what start ups do: find different ways to make our lives better.  For our stagnant economy, investment in new technology couldn't have come at a better time since technology is key to the growth of GDP. 

Aside: GDP is usually calculated by some derivative of the Cobb-Douglas function : Y=AL^aK^(1-a), where Y=GDP, L=Labor, K=Capital, A=technology, a=constant derived from technology constraints.
In our relativity mature economy our population is growing at less than 1%
Capital, which we can call essentially the market cap of the S&P to make things a bit easier, has been relatively cyclical.  The highs in the S&P 500 came with the coming of technological booms, a close correlation to Web 1.0 and Web 2.0.  The SPYders hit 140 during the tech boom of 2000 and hit the same area around the end of last year.  It appears to have hit a natural ceiling unless GDP continues to grow.  Yet in order for GDP to continue to grow we need to increase our A factor.  Technology.  Guys in a garage, guys at Starbucks, even some folks at a tea shop.  Technology.  Startups are looking for ways to do things better, more efficient, and smarter. 

A good time for technology?  Sure.  Especially those companies with Blue Ocean Strategies that break down what was once thought to be impossible and open a whole new paradigm of thinking.  Google, which created the entire search marketing industry, is one of those companies.  Microsoft saw the opportunity to separate hardware from software and hence the explosion in the software industry.  Just as sixteen others broke the once impossible four minute mile mark once Roger Bannister broke it in 1954, start ups make the outrageous ordinary.

I'm more optimistic than ever.  We might not have the largest or cheapest labor force but what we do have are the Roger Bannister's of the world (yes he was British, but hopefully you get my point), the dreamers and the visionaries.  We have the ability to see things that "cannot" be done and aren't so obvious.  And I think once we do these things, hindsight is 20/20 and these not so obvious things become so clear......