The origins of the tech industry were founded on solving big problems. However, today’s tech industry is not focused on big problems, even though we may have more problems facing humanity than ever before.
So, why has technological innovation let us down?
Let’s take a quick look at history.
The modern vision of Silicon Valley has its origins in military research. The threat of nuclear war caused the US government to press regional universities on innovation, which led to the development of the semiconductor. This initial sense of purpose guided the early days of the tech industry, helping to spawn some of the biggest and most important technology companies in the world like Hewlett-Packard, Fairchild Semiconductor, and more.
As semiconductors and computing advanced, a group of renegade hobbyists, like Steve Jobs, led a new wave of entrepreneurs aimed at bringing these new technologies to the masses. Companies like Atari, Apple, and Oracle further established Silicon Valley as THE place to foster and grow big ideas. By the 1990s and buoyed by the adoption of the internet, countless more companies cemented Silicon Valley’s credentials as a region of innovation, tackling ambitious challenges like organizing the world’s information, facilitating online payments, and connecting people across the globe.
Tech entrepreneurs were solving big problems.
Credit: Steve Blank's 'Secret History of Silicon Valley'
But then things started to shift…
At the turn of the millenia, consumer internet companies dropped like flies as the industry struggled to find sustainable business models. Raising funding was difficult, infrastructure was expensive, and online advertising required huge upfront cost without any guarantees on performance. It was incredibly hard for new products to get off the ground and get noticed.
In the background, however, several new technologies were being created that would lower commercial barriers to entry and set the stage for the massive, global “Startup Revolution” that we still see today.
Cost to Launch Races to Zero
In the early 2000s, while the world’s biggest websites had the enviable luxury of massive server farms, they faced complex challenges managing these farms. For example, they needed to design systems to effectively utilize their servers in times of low and high traffic, and ensure that business-critical components like security and backups were consistent across all of their services (and any new services they might roll out).
Amazon spent years building their internal solutions to these problems, and in 2006 they made these solutions (and their excess server load) available to others through Amazon Web Services (AWS). Others quickly followed, and the resulting cloud offerings have exponentially reduced the cost of launching and maintaining an internet service. Anyone with some coding skills can now hack something together, launch it easily, and only pay for traffic as they go.
The cost to launch new products didn’t just drop on the software front. The advent of pre-sale platforms like Kickstarter and Indiegogo have provided entrepreneurs with the upfront capital needed to work with manufacturers on new hardware and physical-goods. As a result of this growing demand, industrial design, fabrication, and manufacturing costs have fallen, and suppliers have become much more accessible to the masses. A growing industry of connectors and middle men have further lowered the barriers to production.
Today, anybody with some hustle can dream up a product and get it in the hands of customers in just a few months time.
Reaching Customers Becomes Easy
When Goto.com devised a pay-per-click (PPC) search engine that could properly monetize the value of consumer intent, a small company named Google took notice and launched their own PPC advertising bid-auction system. This innovation opened the global internet audience to any advertiser with a small budget, a spreadsheet, and some time to spare. No longer did an advertiser need to shell out five figures to launch a wide CPM ad - you could now only pay when someone typed a specific phrase and actually clicked your ad. When others followed suit, the online advertising game was now open to the masses, and companies of all sizes could cost-effectively reach consumers.
The success of Google’s advertising platform also guided the direction of the 2000s’ other major consumer tech innovations: social media and smartphones. Social media channels like Facebook built empires on the ability to provide advertisers with precise targeting based on your interests and associations, while smartphones allowed them to reach you based on your (very accurate) location. In addition, these were entirely new platforms on which to build consumer services and reach tons of users.
Today, anybody can easily reach a highly targeted audience of consumers and only pay for performance.
Entrepreneurship has been Democratized
The combination of low startup costs and easy customer access has effectively democratized entrepreneurship.
To be clear, this is a GREAT development because more people than ever before now have the ability to solve customer problems, create businesses, and leverage the global internet economy. However, whenever you democratize something, the masses can use that power as either a negative or positive force.
Unfortunately, I think most people will agree that entrepreneurs as a whole have used these new powers in a negative way.
The power to easily create products and reach consumers has not been used to solve our problems and kick off a new era of meaningful innovation in Silicon Valley. Instead, it has created a modern gold rush of mostly useless consumer products. Our attention has been hacked with scientific accuracy to sell us more stuff, and to influence our priorities and politics.
Rather than solving the world’s problems, entrepreneurs are filling our social feeds with wave after wave of useless consumer products and services.
Entrepreneurship in Silicon Valley is no longer about solving big problems - it is just one big game of arbitrage. The goal? To leverage the cheap production and promotion to create profitable customer acquisition cost (CAC) vs lifetime value (LTV) unit economics, and get rich… no matter how useless or destructive the products you promote are.
Because talent follows the money, many of our smartest people are now recruited as data scientists to utilize their math skills to win this game as well. Wave after wave of our brightest graduates are getting gobbled up by behemoth companies that have little competitive pressure to innovate, but all the money and perks in the world to offer.
What’s more, the companies that have created easy access to consumers have effectively taxed the internet, creating a vicious cycle where the more useless products businesses can sell to their audiences, the richer and more powerful the gatekeepers ultimately become. These companies have created this system under the guise of "openness" and “access”, but in reality they have intermediated themselves to have control over our communication, spending, and the information and viewpoints we get exposed to.
They have created these systems for their best interests, not ours, but we are just as implicit in their creation.
This is the world we have created.
Technology should help highlight the best parts of humanity, not the worst parts - like addiction, vanity, materialism, and tribalism. Instead of preying on our faults and selling us useless products, tech entrepreneurs should help solve some of the biggest problems facing mankind - like poverty, nutrition, healthcare, energy, governance, inequality, and climate change.
When will we stop creating (and funding) businesses that are not meaningful? When will we start to prioritize the things that matter?
The Opportunity for Change
While the problems of the world are many, the minds of the world are bright. Anyone can start solving big problems and make a difference, it just takes a little belief.
Let me explain.
When you first build a startup, it is a blank canvas, and you need to start inspiring people to believe in what you are doing. First, you may get your friends or spouse to believe. Then, you may get a co-founder, or team members to believe.
As time goes on, you are constantly recruiting more and more people to believe, like users, partners, or investors. At the end of the day, startups are a collection of people with shared beliefs, and as the belief in your mission grows, the stronger your startup becomes.
In addition, today’s worker doesn’t want to merely “work for” a company, they want to “work with” a company on a mission they believe in. If you truly believe in your mission and you can inspire other people to believe, then you can recruit a legion of motivated and talented people to help you build it.
We no longer live in a world of 'working for'. We live in a world of 'working with'.
Belief is the new currency of success, and as a result, even the craziest of ideas can come to fruition if enough people believe.
Solutions to the world’s problems can come from anywhere
You also don’t need to be in Silicon Valley or some other big startup hub to make a difference. More and more, massive companies are sprouting outside of Silicon Valley, and this should come as no surprise. In fact, through the Founder Institute, we have tested over 40,000 aspiring entrepreneurs across the globe using advanced social science techniques, and our data shows that there are talented entrepreneurs everywhere.
Here are just a few examples of the entrepreneurial strengths we have found in regions across the globe:
- Latin America has the most “Conscientious” founders in the world. Conscientiousness is a “Big 5 Personality Trait” for people that are organized, self-disciplined, diligent, and hard-working.
- Founders from Singapore have shown the highest “Fluid Intelligence” in the world. Fluid Intelligence measures someone’s ability to quickly learn a new ruleset, and then adapt that ruleset towards solving problems.
- Founders from India have shown the highest “Agreeableness” in the world. Agreeableness is a “Big Five” personality trait that measures cooperation versus antagonism. It can be synonymous with compassion, and being kind, sympathetic, cooperative, warm and considerate — or, conversely, with suspicion.
- Founders from Australia have shown the highest “Emotional Stability” in the world. Emotional Stability is related to neuroticism (another “Big 5 Personality Trait”), and people with high emotional stability have high impulse control and can remain calm in stressful situations.
- Founders from Europe have shown the highest “Openness” in the world. Openness is another “Big Five” trait for people who are intellectually curious, creative, risk-taking, and willing to try new things.
- Founders from Athens have shown the highest “Overall Predictive Entrepreneurship Score” in the world. The “Overall Predict Score” is a combination score of many traits that the Founder Institute has found to correlate with entrepreneurial success, and it is the main criteria in our global admissions.
- Silicon Valley is not in the Top 10 globally on any of these rankings.
Anybody, from anywhere, can make an impact on the world through entrepreneurship if they believe.
What are we waiting for?
Most of us today fall into the Denier/Observer paradigm, content to watch and complain about the world’s problems, but loathe to do anything about it.
At the same time, AI is eliminating many of the white collar jobs, and robotics is killing many of the blue collar jobs. Together, they are combining to kill a large portion of the “middle class” jobs, and the jobs we take granted may not be available in just a few years time.
The time to leverage technology for the greater good is now.
We can’t just rely on governments to solve our problems.
The biggest problems of humanity CAN be fixed by entrepreneurs, because entrepreneurs are the catalyst for change.
A Call for Purpose-Driven Entrepreneurship
In summary, there is no shortage of problems facing humanity, but there is a shortage of ambitious entrepreneurs trying to solve them.
There are way too many talented entrepreneurs pursuing copycat or trivial ideas, and even more people wasting their lives in big companies that also lack societal impact. As the world becomes more connected and technology infiltrates the very fabric of our society, there has never been a better time for tech entrepreneurs to make a difference.
Purpose-driven entrepreneurship doesn’t mean that you have to try and fix the world’s biggest problems in one fell swoop. What it does mean is that if you are going to spend most of your waking moments working, then it is a disservice to both you and society to be working on something that is not meaningful.
In short, your work should matter. Make your work matter. Find something you believe in, and then don’t compromise. If you don’t want to build a startup yourself, that’s fine, but just make sure you work at a company that you believe makes an impact.
Your work should matter.
FI for Good
In order to inspire and empower entrepreneurs to build impactful and ambitious companies, the Founder Institute is unveiling our "FI for Good" initiative.
Over the coming months, we will be announcing a number of programs aimed to help entrepreneurs of every background to not only create meaningful technology companies, but to also solve the biggest problems of humanity.
We will work tirelessly to help entrepreneurs building meaningful businesses succeed, and are already planning new fellowships and program tracks, pitch competitions, mentoring opportunities, special events, partnerships with organizations supporting global change, and more.
If entrepreneurs don’t fix the world’s problems, nobody will.
I believe we can do it.
Do you believe?
This post was written by Adeo Ressi (CEO of the Founder Institute), along with Jonathan Greechan (Co-Founder of the Founder Institute)