The Next Big Thing (or the current thing that will soon, finally, be big)

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I have good reason to think that the next big thing is right around the corner. Like six months away.

Except its kinda been the big thing for the last seven years or so. I’m talking about green and socially responsible solutions to the many crises we face today.

I know, I know, you’re thinking “Wow, there’s a news flash, you just figure it out today genius?”

I’m not talking here about all the focus on green, all the thousands of innovative firms springing up, the billions of column inches of press that the green movement has garnered these last bunch of years. I’m blogging about the capital markets.

Remember the dot.com frenzy? Its etched in my brain, my startup rode the wave and ended up hanging ten in the early ‘90’s. Not the outcome I was working for, but boy did it open my eyes. I was STUNNED by the amount of capital that was pouring into the markets. Since that last implosion, capital has been as hard to come by as hen’s teeth. (I have sack of hen’s teeth BTW, email me if you want to buy some. They’re very expensive).

Where are the ducats? Dammed up. Waiting for the right time to flood into the markets. And that time is coming…soon (sinners repent!).

Our VC back in the day was Kleiner Perkins. They dumped $30 million into our wildly speculative idea. It seemed insane to me, even though I worshiped our concept. But this was a small gamble for them. Who was made a partner at KP last year? Al Gore. Hmmmmm, gotta get you thinking.

So here’s the thesis: liquefied coal, domestic oil exploration, trade restrictions, trade quotas, subsidies, agriculturally derived ethanol…none of it is sustainable on the numbers, and none of it will propagate our country’s stock-in-trade, which is brilliant, world-leading innovation.

As soon as the markets get the signal that public policy will favor new energy sectors (i.e. INNOVATION), all that pent up capital will flood the market. Right now, hedge funds are under regulatory scrutiny, the mortgage securities market is crushed, the US dollar is upside down, hedge fund oil speculation will soon be front-and-central in the House, and all that cash is looking for a happy place to go.

Write it down, call me up: no matter which candidate gets sworn in, February 2009 will see a deluge of capital searching for the 20X return hurdle. Smart companies, and those that have the wherewithal to invest in their brand in this dismal economy, will be popping the champagne corks in 12-months.

Ken Liatsos

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