IBM finally learned how to snatch the pebble from Kan’s hand, at least when it comes to venture capital. How do I know? Because it now no longer participates in venture as an active investor. Smart, but it dropped a lot of pebbles back in 2000:
During the dot-com boom, VC firms didn’t see much value in talking to IBM, which looked to them like an old-fashioned company in those heady times. Not being part of the industry establishment came as a shock to IBM executives, admitted [IBM Vice President Claudia] Fan Munce.
IBM then went to the other extreme and started casting its money about. If it wanted in on VC discussions it would have to ante-up. It did. “That helped us get to the table. But we realized quickly that it was the wrong thing to do,” said Fan Munce, who declined to say how much money IBM invests or how much it wrote off when the dot.com bubble burst. “We didn’t lose all the money,” Fan Munce said.
Learning from those experiences at the beginning of the decade IBM has grown to become one of the most sophisticated players of the VC game, some observers claim. IBM limits itself to only four or five deals a year; it usually puts most of its money into VC funds, Fan Munce explained. [Emphasis added]