The NASDAQ's downward spiral has inspired apocalyptic visions among some market watchers, especially those in the venture-capital realm. A longer view contradicts those dismal prognosticators: Professionally managed venture funds command more money than ever before, angel investment is reaching unparalleled levels, and most of the real suffering over the NASDAQ index is limited to those who invested at its dizzying heights. Where we once may have suffered from irrational exuberance, we may now be in the throes of irrational anxiety.
This year has witnessed a shift in the markets, but rather than talking about war, famine, death, and pestilence -- the traditional four horsemen of the apocalypse -- we should look to the four horsemen of the new economy: AT&T, Xerox, Polaroid, and Kodak. These blue chips are living testaments to one of the new economy's fundamental theses: Companies must innovate or die. At one time, AT&T, Xerox, Polaroid, and Kodak embodied innovation; even more, they represented corporate venturing -- a kind of innovation that is currently in fashion again after a lapse of twenty-odd years. All four companies now stand as examples of highly innovative companies that have lost their technological edge.
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