To help make sense of the Facebook IPO, we caught up with Steve Blank, a professor at Berkeley and Stanford and serial entrepreneur from Silicon Valley. This conversation has been edited and condensed.

THOMPSON: What does the Facebook IPO mean for Silicon Valley?

BLANK: I think it's the beginning of the end of the valley as we know it. Silicon Valley historically would invest in science, and technology, and, you know, actual silicon. If you were a good VC you could make $100 million. Now there's a new pattern created by two big ideas. First, for the first time ever, you have computer devices, mobile and tablet especially, in the hands of billions of people. Second is that we are moving all the social needs that we used to do face-to-face, and we're doing them on a computer.

And this trend has just begun. If you think Facebook is the end, ask MySpace. Art, entertainment, everything you can imagine in life is moving to computers. Companies like Facebook for the first time can get total markets approaching the entire population.

THOMPSON: That all sounds pretty good for Facebook, actually.

BLANK: For Facebook, it's spectacular. But Silicon Valley is screwed as we know it.

If I have a choice of investing in a blockbuster cancer drug that will pay me nothing for ten years, at best, whereas social media will go big in two years, what do you think I'm going to pick? If you're a VC firm, you're tossing out your life science division. All of that stuff is hard and the returns take forever. Look at social media. It's not hard, because of the two forces I just described, and the returns are quick.