The World According to David Cheriton (He Funded Google) and the Next Big Area For High Tech Innovation

David Cheriton is the stuff of Silicon Valley lore.

It was on his front porch in 1998 that Sun Microsystems co-founder Andy Bechtolsheim met with Sergey Brin and Larry Page, both then Stanford students, and wrote the first check to Google. Cheriton, to his good fortune, matched the contribution.

Several years earlier, he and Bechtolsheim co-founded Granite Systems (a key acquisition for Cisco Systems that allowed it to branch beyond routers) and then in 2001, Kealia, which Sun snatched up during its rudderless years following the dot-com crash.

Cheriton is still a believer in Google. It is a new type of company that moves faster than companies in the past, he said last Thursday during an on-stage interview at the Churchill Club in Silicon Valley. Decision-making is driven by data and quick-acting managers harnessing powerful computers to process reams of information, he says.

“I think innovation is a little overrated,” he said. “It’s all about execution.” At Google, execution makes it hard for any competitor to mount a frontal search engine assault.

So where does Cheriton think innovation should be focused? The answer is equally simple and broad: computer infrastructure. For 30 years, computer innovation has moved up the “stack” from chips to operating systems, to middleware, applications and finally social networks.

This stack was built rapidly, and “there’s a big opportunity to (go back and) build better infrastructure,” he says. “We don’t have to go to the next level,” or layer.

Software development models are the same ones used 30 years ago, for instance, with the top 25 programming errors largely unchanged, he says. Processor utilization in some applications remains inefficiently low. And networking quality has room for improvement.

Entrepreneurs live in a “golden era,” he added. Starting a company is easier that it was 20 years ago. It’s simpler to connect to investors and products grow faster, he says.

Today, entrepreneurs need three things, Cheriton advised. They need passion to overcome the ups and downs of a young company. They need the sensibility to understand how products fit into a market. And “they have to have the ability to build a friends network” stretching from board members to employees, he said.