Powell Will Improve Techs Leverage

By Chris Nolan  |  Posted 2005-07-21

Powell Will Improve Techs Leverage

Last week, when Silicon Valley venture capital powerhouse Kleiner Perkins Caufield and Byers announced that former Secretary of State Colin Powell was joining its firm, Silicon Valleys political maturation took a giant step forward.

Much was written about the advice that Powell would be able to give Kleiner Perkins entrepreneurs. Almost as much was written about how the former Army general and chairman of the Joint Chiefs of Staff under President Clinton, would be able to apprise the firm on world events.

Yes. Well, thats what they all say.

Whos "all"? Investment firms like The Carlyle Group. Banks like Solomon Brothers and Goldman Sachs. Law firms like Hogan and Hartson and Verner Liipfert Bernhard McPherson & Hand.

Click here to read Chris Nolans recent column about the Internet sales tax debate.

They "all" say that the famous politician joining their ranks is a genius, that he is going to provide topical and timely advice and that hes going to be an asset to the way the bank does business.

Thats almost universally true, but its not the full story. And understanding the role that the bigwig politician plays at those firms helps put Powells role at Kleiner Perkins in perspective.

Kleiner, by getting Powell to lend it some of his star power and influence, is saying that it wants a public place in the ranks of U.S. establishment players. It wants its opinions and its voice in world and national affairs to count. And it wants to be able to speak directly to those in power.

It couldnt come at a better time.

Although a great deal of Silicon Valleys wealth has been created by people who understand the inner workings of complicated technology, that day is slowly coming to an end.

The great fortunes to be made in tech are going to be made people who come up with good ideas and services. Google is a good example. It is search, but it is also an advertising network. Its technology may be seamless and wonderful—thats why its so powerful—but it doesnt sell technology. It sells advertising.

Similarly, the iPod is a cool little device that helps Apple sell iTunes. One plays music, one sells it. And at its heart, Technorati is a service that shows people who run managed blogs and other small websites the impact of their words and ideas. Almost all social networking services—Friendster, Flckr, SocialText—are providing services. They are not selling technology. They are selling a service.

That means that Silicon Valley—and tech folks in general—have to go start worrying not just about their public image but about the impact their ideas and inventions can have. Want an example? Look no further than the Supreme Court ruling on Grokster.

Want another one? How about the pending rewrite of the telecommunications law and the series of fights—large and small—that are already breaking out between established phone and cable companies and small wireless providers.

Theres another one brewing with wireless providers and TV broadcasters over digital spectrum and its proper use. And, as the cynics say, those are the fights we know about.

Next Page: When Powell speaks, bigwigs will listen.

When Powell speaks, bigwigs

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Now, big, established businesses like having knowledgeable political insiders around. Why? Because it makes their lives easier.

Heres a possible scenario: Lets say the House Energy and Commerce Committee is close to crafting new telecommunications legislation that would—remember, this is fiction—make it illegal to share a wireless network. Wording in the bill would allow telephone companies to levy harsh fines against those found to be violating this prohibition.

But lets say that Colin Powell—one of the Republican parties biggest fundraisers—places a series of phone calls. First, he calls Committee Chairman Joe Barton. Then he rings up Senate Majority Leader Tom Delay. Then he has a quiet chat with Speaker of the House Denny Hastert.

All of those men would take Powells call. And while not all of them are guaranteed to do his bidding; his phoning on Kleiners behalf—on Silicon Valleys behalf, really—would lend extra "oomph" to anyone lobbying against the phone companies in this scenario. Thats how politics is played in the big leagues. And thats where Kleiners partners want to be.

So its not "Welcome to Silicon Valley, Mr. Secretary." Its welcome to Washington Mr. Perkins, Mr. Doerr, Mr. Lane and friends."

eWEEK.com technology and politics columnist Chris Nolan spent years chronicling the excesses of the dot-com era with incisive analysis leavened with a dash of humor. Before that, she covered politics and technology in D.C. You can read her musings on politics and technology every day in her Politics from Left to Right Weblog. She can be reached at mailbox@chrisnolan.com.

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