Probably an unpopular opinion, but when the startups receive $120,000,000 to make a juice machine that is only really accessible to the top 1 or 2% of the USA, it's not a bad idea to give funding a reset and give people a reason to step back from trying to raise funds and more time to work on more innovative ideas. America has it's fair of crises now, yet a good chunk of people have a smartphone. How can startups help people in the midwest and the coasts? Or what interesting things could be done given most of the world is online now? I'm sure we'll see some cool ideas and another funding boom again with some cool new ideas soon.
I think people forget that vc backed startups are profit and greed driven (like all free enterprises). We all like to drink the cool aid and think that a startup's purpose is societal impact but really they are engineered to make $$$.
As such, it makes sense that people pour millions of dollars to target the 1%. They've got a shitload of more money than the rest of the country. Seriously, if you've got an product that every rich person wants but that no other person cares about, you will have vcs knocking on your door. We need to think of vcs as building cash machines, not as the money behind "changing the world". Yes occasionally vcs fund companies like Google that have broader impact but that's not their primary aim.
If we want more people building ventures that impact society we need to either
* change the funding model
* build bootstrap ventures
* build non profit ventures
* ask the government to step in (a socialist approach)
A good example are institutions like the Gates foundation and WHO eradicating polio in the last few years. Yeah it's not sexy but organizations like that are making real societal impact.
Facebook, Instagram [and any similar VC backed company] are not targeting the 1%. Quite the opposite. Mass human scale adoption is their goal. And once this is achieved then their biz models get very interesting. I do hope there is a significant shift towards social impact ventures. This is where some of the hardest challenges are.
That sentiment is commonplace enough that Silicon Valley parodied it: "We're making the world a better place. Through constructing elegant hierarchies for maximum code reuse and extensibility"
Something that's been on my mind recently, given the increasing amounts of inequality, is "why aren't the lower and middle classes more effective at taking rich people's money?".
In other words, rather that thinking about protectionist measures or redistribution (not that I'm particularly opposed to such things), why aren't rich people spending more cash on things and thereby allowing the money to flow down?
One possibility is that we really are topping out our hierarchy of needs. Billionaires are driving round in Priuses and wearing $80 jeans. Capitalism relies on demand being practically infinite. Could this growing inequality be a sign that this assumption is faulty?
Or do we just need to invent more drone mounted, blockchain integrated juicers to sell to them?
The reason that lower and middle class people are not more effective at taking rich people's money is because if they were effective at taking money, they would not be lower and middle class. They are lower and middle class because they are effective at other things that have nothing to do with taking money.
Perhaps I should have phrased the question as "why have the lower and middle classes become relatively less effective at taking rich people's money in recent years".
Its not an unpopular opinion, but that Juicing thing was definitely an exception, not the norm.
As to why everyone is chasing unicorns, one of my friends who's actively trying to get funding for his hardware startup sums it this way: VC's would make more from 1 unicorn than 50 other mildly successful businesses, and the other 50 businesses would probably require just as much work as the unicorn.
Its a really fucked up calculus to be sure. I'm not sure what the solution is though. How do we encourage VC's to invest in more meaningful startups?
Unfortunately in capitalism, the only carrot you have is profit. The question then becomes: How do we make "meaning" profitable? I really don't mean this as snark; if you could find a way to have helping the mentally ill increase shareholder value, you could probably make it work. I'm not arguing that this pursuit isn't horribly broken from a humanistic standpoint, merely that it might work and would be a lot more feasible than changing something which has become fundamental to how our world functions within this lifetime.
The problem is it's impossible to predict success in an early stage company. Optimal way to ensure profit is to place many bets and hope one pays off enough to cover the costs of the losers. Asymmetrical outcomes are a requirement for sane strategic investors.
If all you can do is buy lotto tickets, you are better off buying insane payoff opportunities than trying to pick which lotto tickets will have a higher frequency of payoff, but a much lower yield.
The point though is that these are not really lotto tickets. A lot of high-tech startups are working on monetizing some obscure technology, or inventing a more efficient way to do a task, or something along those lines. They are actually providing value, other than the payoff from their sale or IPO. I think we as a society are failing somewhat to give an appropriate monetary value to that kind of contribution.
> A futuristic new kitchen appliance that is being called the "Keurig for food" could forever change home cooking. Called Tovala, the countertop machine is a broiler, steamer, oven, microwave, and toaster in one ... The price of the machine will eventually go as high as $279.
> The June Intelligent Oven can detect what you’ve just popped into the oven, and will heat up or cool down based on how you’ve indicated you want it cooked. It’s connected to your phone, so it can tell you when your food is ready. This countertop convenience comes at a steep price of $1,495 per oven.
That's a preposterous and intellectually dishonest position to hold. If there's so much money on the table go raise your own fund and get wildly rich on all these ideas the sheep won't touch. Or admit that deeds are harder than words.
> when the startups receive $120,000,000 to make a juice machine that is only really accessible to the top 1 or 2% of the USA
Given that even most crack houses probably have more than $399 worth of kitchen equipment, to the extent it's only 'available' to the 1% is only because it doesn't offer enough utility to justify the cost. Had they made a less shitty product that cost the exact same amount then no one would be complaining about class inequality or whatever.
1. Hindsight -- it is much harder than you think to determine not only what could be profitable, but also what is impactful. A lot of it is character judgment -- it isn't like Facebook was a revolutionary new idea, but it was the competitive team with (some) vision and (a lot of) execution that brought it to new heights.
2. Just because unicorns get the majority of the media attention doesn't mean they are the majority of startups.
VC funds will invest their money in what they believe will maximize the return on the value invested. They are not particularly trying to "help people", neither are they trying to segregate society, they are simply pursuing their stakeholders best interests, and there is nothing wrong with that.
It has nothing to "reset" or having to think about helping the 99%. Silicon Valley isn't a charity and the VC crowd nor anyone else in silicon valley care about society or doing good. It's all about money. The FED has been raising interest rates and has signaled they will continue to do so going forward for many years to come.
The smart/connected VC and the smart money are now cashing out to front run the recession. Soon the second-most connected will pull out and so on and so forth. And when the FED signals a low interest rate environment, the smartest/most connected will be the first to jump back in.
The US has been on an epic economic boom since 2009 and the economy has been drowning in cheap money for almost 10 years.
It worries me how so many people have an idealized fantasy about silicon valley, tech gurus and the industry itself. The tech industry is all about greed just like wall street, oil industry, clean energy industry, etc.
Elon Musk is just as greedy as Goldman Sachs CEO.
If silicon valley could make more money with juice machine for the top 1%, they'll keep investing in it even if it means 99% is starving. Musk, Page, Zuckerburg, etc aren't saints no more than wall street big wigs are saints. They all just want money. Which isn't necessarily a bad thing.
