It's the end of the Valley as we know it.

Very interesting interview with Steve Blank in The Atlantic:

If I have a choice of investing in a blockbuster cancer drug that will pay me nothing for ten years,  at best, whereas social media will go big in two years, what do you think I'm going to pick? If you're a VC firm, you're tossing out your life science division. All of that stuff is hard and the returns take forever. Look at social media. It's not hard, because of the two forces I just described, and the returns are quick.

Here is a bit more:

In the last bubble, venture capitalists went into a frenzy if anything had an ear and eye. I don't think this a bubble. I think the valuations are a bit of a bubble, but social media is real.

But weren't some of the companies that came out of the dot-com bust "real"? Part of their problem was that they weren't making revenue and valuations were way off-base. It still seems like that is happening again.

Blank notes that federal small business and research grants are important in driving research in long-term return industries - such as the life sciences. I think so too. But it still means the market will need to naturally support these investments.