There is a dark cloud over the internet sector due to the weak performance of the Facebook IPO.  It’s not horribly dramatic by any means – Facebook is clearly an important company (even if it’s not worth $90B+).  But a lot of entrepreneurs and investors were hoping for a really strong showing to drive more liquidity in the market and continue the surge in hype around internet companies (both start-ups and later stage companies).

The interesting thing is that while many entrepreneurs, tech executives, and investors are short-term nervous about the fate of internet-enabled startups, most are incredibly long-term bullish.  Personally, I’m more bullish about the prospects of internet-enabled innovation than I have been my entire career.

The reason is that I’m convinced that we are on the ground floor of a new innovation wave that is going to be at least as disruptive as the first wave of the internet.  It feels like we are in the early/mid 1990’s again, or, more appropriately, like we are on the cusp on the second industrial revolution where we saw massive developments centered around the foundational innovations of steel, the internal combustion engine, and electricity. Arguably, the second industrial revolution was more impactful to humanity than the first, and I feel the same about what is ahead compared to the first internet innovation wave.

I’m not enough of a tech pundit to create a cohesive theory about the current state of things like Roger McNamee and Mike Maples, nor am I going to rehash the excellent collection of data that Mary Meeker has graciously assembled (both required reading IMHO), but here are four foundational pieces of infrastructure that is getting me most excited about where the tech industry is today and where it is headed.

 1. UBIQUITOUS COMPUTING

We have Apple, Steve Jobs, and yes, even the carriers to thank for this. It’s simply staggering to think about the proliferation of internet-enabled computers that we all carry around with us at every minute of every day. Just 12 years ago, most of us were carrying Motorola Startacs.  5 Years ago, the mobile web meant email on the blackberry or really lame on-deck applications on feature phones.  It wasn’t that long ago, but it feels like the dark ages.

And I intentionally use the phrase “ubiquitous” vs. “mobile” computing because I think the focus on “mobile” underestimates the promise of every human having access to the internet at every moment.  Leveraging location information or using applications on the go is just a sliver of the value ubiquitous computing provides.  For example, much of “mobile gaming” on iOS devices actually happens at home, and the rapidly rising share of online shopping occurring on mobile devices is happening on the couch.  What is happening is that the context of internet access has changed.  It has become passive, second nature, as natural as sipping a glass of water or calling over your roommate and asking him a question.

2. SEAMLESS DATA

And it’s not just about personal computing devices.  We are seeing a proliferation of internet connected devices that collect and make accessible data about countless aspects of human life. Most readers I think have at least gotten their hands on fitness devices like Nike Fuel or Fitbit. Many of us have read about Nest or other home automation devices that are hitting the market now. I’m sure my friends that focus on healthcare IT can share a huge list of health tracking devices.  But this is happening in massive areas that we never think about.  Our recent investment in Farmeron is leveraging the rising availability of data being produced in the farming and agricultural sector, and other companies are similarly aggregating and making accessible oceanographic data. We are just scratching the surface of the enabling technologies and applications that are going to be built on top of this data infrastructure.

3. NATURAL COMPUTING

It also looks like the floodgates have started to open in the way we interact with technology and the web.  As far as we have come in the last 15 years, 99% of us are primarily interacting with computers using keyboards that have layouts designed in 1870, with the intention of preventing typewriter keys from jamming.  Today, we are starting to have more options, and it’s the early innings even for these innovations.  By now, most of us have seen a 2-year old interact with an apple device and have been blown away by the intuitiveness of swipe and touch.  But also watch an app like Paper in the hands of an artist and you’ll literally see magic happen before your eyes. Many of us have experienced the power of gesture and motion when we’ve played with a Wii or Kinect, but companies like Oblong are going way further and pushing the boundary of what we could do in more serious applications.  People love to laugh at Siri, but they forget how idiotic the first mobile phones felt (see Wall Street) or even how clunky the first iPhone was.  I think it’s not too much to think that in 10 years, the majority of our interaction with the web will happen without a mouse or a QWERTY keyboard.

4. OPEN AND CONNECTED IDENTITIES

This is the most obvious and lots have been written on this, so I’ll keep it short.  But layer on top of the first three innovations the fact that we now live in a world with unprecedented information about the attributes and linkages of people, places, and things. It’s not just about the Facebook open graph. Many millions have open and semi-public identities on a multitude of services like Twitter, LinkedIn, Skype, etc. I think that number is actually only expanding, not contracting any time soon. There is also increased willingness to offer our contact and communication history to applications that create value out of that data. This creates implied social graphs, driven by actual behavior outside of social networks, based on data from emails, sms, etc.

These four building blocks are different from just emerging trends or the tech memes de jour.  They are far more foundational to what is to come.  When I think of most of the large-scale internet business out there (both B2B and B2C), very few were built for a world where these four forces have come to a meaningful level of fruition.  And I think massive industries that have been relatively untouched by the internet will soon be adressible as these innovations take hold.  Things are up for grabs once again, and as always, we will only underestimate what lies ahead the next 15-20 years.  That’s why I don’t really care how FB performs, and why I’m incredibly bullish even as the Eurozone falls apart and this country continues a long and painful process of deleveraging. Things will get much much better.  Don’t panic, enjoy the ride.