Meaning and Silicon Valley
Nick Pinkston just posted a very interesting article on the role of meaning in the current Silicon Valley ecosystem. Here are a few of my thoughts in response:
Meaning as a Competitive Advantage
Nick mentions Meaning as a perk for employees. I totally agree and think that companies with meaningful visions have a serious advantage in recruiting. Competition over engineers is incredibly fierce and the opportunity to make a positive impact on the world has serious allure (especially when compared with Zynga or yet another daily deals site).
I had a consulting gig with WellnessFX (definitely a company with meaning) and it was apparent that they able to more easily attract top tier talent because of the meaning intrinsic to the business.
There's a famous anecdote of Steve Jobs convincing John Scully to resign as Pepsi CEO to head Apple by saying, "Do you want to sell sugar water for the rest of your life or come with me and change the world?"
I have to imagine current CEOs are telling bright engineers, "Do you want to build virtual tractors or come make a difference?"
VCs and Pattern Recognition
VCs rely heavily on pattern recognition; many want to see a huge success story before they're willing to invest in a space. Entrepreneurs exploring hard, meaningful problems with cutting edge technology are, almost by definition, in new territory to which VCs can't map prior success.
Impact Investing has been getting some buzz over the past few years. Back in 2009, Monitor group predicted that it will grow to $500B in assets by the end of this decade. Organizations such Omidyar Networks are focused on funding startups looking to change the world, regardless of for-profit / non-profit status. Angle investors, too, are taking chances on awesome ideas that aren't a good fit for traditional VC financing.
Hard Problems are Hard
The hard but meaningful problems are difficult for myriad reasons. Sometimes there is an intense technical component to the solution which entails expensive R&D. Other times, the problem is related to an incredibly complex, opaque ecosystem; just understanding the problem, the key players, and the relationships involved can deter entrepreneurs.
I spent some time hanging out at Singularity University last summer where the students were tasked with starting companies that will affect One Billion lives. The students were highly motivated to accomplish this all were incredibly brilliant and qualified. Many of the student teams, however, did not start the program with authenticity to problems they were attacking. Even with access to experts they struggled to come up with feasible solutions with tight product/market fit to the problems at hand.
Fixing Market Failures or Disrupting Existing Markets
Nick is looking for a new model (i.e. not for-profit) of entrepreneurship and funding to create meaningful positive impact. While I definitely agree there is room for new models, I'm a big fan of for-profit start-ups which generate fantastic value by fixing market failure or disrupting existing markets.
Examples of the former are Etsy and Kickstarter which connect entrepreneurs and customers that previously could not have found each other. An example of the latter is Chegg which created a rental market for textbooks, disrupting the publishing industry and creating immense savings for students.
These ideas are very fundable under the for-profit model and create tremendous value for customers and investors alike.
Think Tanks Finding Opportunities
I would love to see Think Tank dedicated to finding markets that are ripe for the disruption described above. The organization could do the intensive research necessary to deeply understand the problems related to the space and the complexity of the ecosystem. They would then communicate the opportunity to socially minded entrepreneurs and help them build authenticity/understanding as quickly as possible.
Ideally this type of Think Tank could spark regular "land-rushes" that will create significant value to both entrepreneurs and the customers/stakeholders.
Supporting R&D Focused Teams
The heavy R&D teams don't quite fit well within the models I described above. They tend to be incredibly high risk and capital intensive. Here lies the most need for the alternative models of financing/organization that Nick describes.
Perhaps the best solutions here would be grants given from the government or foundations which enable the most brilliant researchers to focus on cracking the problem. Under this model, I would love to see all discoveries immediately enter the public domain; thus maximizing the impacts of the grants.