Nov. 25, 2002 - In 2000, at the peak of the Internet boom, venture capitalists pumped a mind-boggling $102 billion into startups in the United States. Venture capitalists were raising money so fast they literally couldn’t find enough companies to invest in. They were pouring money into Linux companies that admitted they might never make a profit and into startups like Pixelon, which spent $16 million on a Las Vegas launch party. John Doerr, the legendary venture capitalist who backed Amazon.com and Netscape, called the Internet the greatest source of legal wealth creation the world had ever seen.

Times, of course, have changed. In the third quarter of this year, U.S. venture capitalists invested only $4.5 billion into 647 startups -- $25 billion less than they invested in the third quarter of 2000. At a VC conference in San Francisco earlier this year, speaker after speaker lamented that there was no Next Big Thing on the horizon.

This is somewhat astounding, since it’s clear that RFID technology has the potential to solve so many business problems – from supply chain theft to out of stocks. RFID has long been held back by the lack of standards, but progress is now being made on a number of fronts. Which standard becomes dominant is not as important as making sure there is a standard (or several standards for broad industry segments).

That raises some important questions: If all vendors have to make products to a set standard, how will small, venture-backed companies make money? Won’t a few very large, hyper-efficient producers dominate the market? And if that is inevitable, won’t innovation be stifled?