You know, that’s just what innovation looks like

The problem in his view is that many of the talented engineers and product designers who are now starting their own companies could have a bigger impact at places like Facebook, and they in turn will have a hard time attracting the best talent because those people can get funded to start their own projects as well.

It’s gotten so bad that, says Parker, “Now institutionally-backed venture funds are backing other venture funds in order to stay close to the dealflow.” (Hmm, sounds familiar).

“And it will end very badly,” pipes in VC Jim Breyer, who is also onstage with Parker.

Parker suggests that one reason it will end badly is because the Internet industry will ultimately consolidate just like the PC industry did in the 1980s and 1990s.

This is what innovation looks like. There are periods of great diversity and flowering, and there are periods of consolidation and maturation. When we’re in one period, there’s always people deriding it for the other. Everyone says they want innovation as a lover, but no one likes to deal with her moods.

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