Blinded by the Light: How the Illusion of an all-Optical Network Led Me to My Favorite Portfolio Addition So Far
Happy Monday! I hope all of you enjoyed the long week. Below you’ll find an excerpt from the June issue of The George Gilder Report.
If you’re not already a subscriber to The George Gilder Report, you can go here to discover more information on how to gain access to the full research.
I first met Dave Welch in the late-1990s when he was the chief technology officer at JDS Uniphase. Makers of lasers, modulators, and amplifiers for fiber optics, Uniphase was becoming the “Intel of the Telecosm.” But its stock collapsed like nearly everyone else’s in the telecom financial crash of 2000.
Dave and I had a running debate…
The topic was the legitimacy of an all-optical network versus an optoelectronic network, of which Dave would become a great pioneer.
At the time, using the then prevailing metaphors of “information highways,” “lanes,” and “lambdas,” I was a photonic purist — pursuing my calculus of abundance and scarcity into blinding boulevards of light.
In other words, I believed in the dream of all-optical networks.
I wrote in Telecosm…
Today the ascendant technology is optics and the canonical abundance is bandwidth. Companies focused on jamming more and more information packets down a single lane bitstream — as if there were no bandwidth to spare — will lose to companies that waste bandwidth in order to build capacious multi-lane highways with each lane running well below capacity.
For lanes, think wavelengths or lambdas. I was enthralled by the vision of fiber optics inventor Will Hicks of a wavelength: a “lambda number for everyone in the world.”
As I said…
The networks of the future will rarely need light paths that can bear the net traffic of entire cities on a single beam. What the new networks will soon require is millions of addressable wavelengths of colors of infrared light. Each one will constitute a potential circuit connection between one terminal and another, just as your telephone used to create a circuit connection between one user and another.
Dave Welch (who, by the way, would soon be co-founder of our paradigm company of the month) was having none of it.
He claimed that wherever the signal had to be processed or addressed or error corrected or compressed, it would be necessary to convert the light into electronics.
According to Dave, optoelectronics would rule.
We argued in his office. We argued while touring his indium phosphide photonic integrated circuit fab. We definitely debated when I invited him to my Telecosm conferences back in the day.
I also remember I enjoyed the debate. What could be more fun than repeatedly encountering the smartest, most articulate, intellectually exciting advocate for the “other side” — and coming away every time still sure I was right?! Oh, the raptures of self-satisfaction!
And I was right, sort of — for about 10 years. Which, in retrospect, Dave surely knew.
He knew I was right for the time and might be right again. But he knew I would be wrong for the next generation. And he knew that by that time his brilliant new company — and our portfolio company of the month — would be ready to save the day.
Again, if you’re not already a subscriber to The George Gilder Report, you can go here to discover more information.
Editor, Gilder’s Daily Prophecy