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Kleiner Perkins invested in over 60 cleantech companies. Unfortunately, their cleantech portfolio seems to be having pretty lousy results - http://www.mercuryn

Kleiner Perkins invested in over 60 cleantech companies. Unfortunately, their cleantech portfolio seems to be having pretty lousy results - http://www.mercurynews.com/business/ci_22385874/kleiner-perkins-john-doerr-falling-behind-after-betting http://www.mercurynews.com/business/ci_22385874/kleiner-perk... I think the proportion of VC funded companies that are doing an advertising bases social product is a bit exaggerated. I'd say the majority of funding is for paid subscription based SaaS web apps and software, stuff that manages some part of the enterprise, analytics, advertising optimization, security, backups, data management, etc. etc. See, for instance, one first tier venture firm's portfolio - http://www.generalcatalyst.com/companies http://www.generalcatalyst.com/companies However, the point remains that few VC funded companies are attacking the areas that have the most potential for raising quality of life. I do not blame the VC firms for this - they are doing the economically smart thing. Software has a much greater potential for generating the high profits of natural monopoly with relatively low capital investment costs. Cleantech simply does not provide the same returns. In reality, the solution may be more Solyndras. Maybe we need some public institution - government or philanthropic - to grant loans at a 2 to 1 match for equity investment in companies that are tackling socially useful problems. Many of these companies will fail. But the knowledge, know how, and personal experience generated will create the base for the next round of companies, or the round of companies after that, to create products that change the world. But currently it is not rational for VC's to play the long game, because there is little chance than any particular company they invest in will capture the value created by new innovations. Since much the result of the product will end up as consumer surplus/public surplus, it makes sense that the public contribute to the initial funding if the public wants the investment to happen.

waps 14y ago
And what if "socially useful" - which effectively means whatever the current public opinion is - is ... wrong ? We are the very same people that once believed the earth is flat, and the people that proved that walking in a straight line between two points has to be less efficient than walking in a circle (the ancient Greeks. Why ? Because a circle is perfect. Despite proving that the shortest distance is just that straight line), were probably smarter than us, at least on average. Then it will just be a big net loss to everyone. Socially useful actually working is predicated on people's rational thinking actually producing good outcomes, and ... well, look at our history. The argument that "this time" we'll be right seems a bit unlikely to be true, doesn't it ? The good thing/massive problem with capitalism is that it's an "intelligent" algorithm in it's own right, and the conclusions it reaches (the balance on your and everyone else's accounts) are guided by the algorithm, which doesn't care about morals, especially not about the fickle current version (we're < 40 years removed from the prevailing opinion being that skin color determines your worth. In lots of regions that's still true, like large parts of India, or the vast majority of muslim countries). The differences of opinion between people and "the system" are not really different from the differences between a dictator and it's subjects. Except, of course that the capitalist algorithmic dictator has several advantages. First, he cannot go mad (before you disagree, read up on a few dictators. It'll put things like the Iraq wars and the patent system in the proper perspective). Second capitalism has actual, real information to base it's conclusion on, and nobody can unduly influence it's opinions for long. Third this dictator doesn't care about race, social status, ... (imho conservatives are not fair when it comes to race and religion ("the poor are immoral" argument), liberals are not fair when it comes to social status ("the poor are dumb" argument). I don't want either to stay in power for long). We're switching to a world in which the vast majority of the population is useless, economically. There is no reason for them to be alive, no value in it. There is no way to prevent our capitalist dictator from realizing this is so, and it will -my biology book uses the term "correct". That's the real problem.
- mikecane 14y ago
  >>>We're switching to a world in which the vast majority of the population is useless, economically. There is no reason for them to be alive, no value in it. Then the algorithm is unfit for human use.
  - VLM 14y ago
    That's insightful but probably not the way you meant it. Its insightful in that "everyone" or "every citizen" or whatever used to be involved in "the" economy (as if there can only be one) and its a perfect 1:1 mapping with the world or a geographic country. That's going away. Fast. What will 99% of the population use for an economic system? In the 3rd world there's a lot of drugs and crime, so thats possible. Whuffie or however doctorow spells it? HN Karma? Its kinda like how the "world of warcraft" economy means pretty much nothing to the people frozen out of it (the vast majority of the human population). Current trends show eventually 1% of the population will have a perfect 100% of the existing economy, at which point the old economy and the 1% will become completely meaningless to the 99%. Our economy will be based solely on trading wheelbarrows of firewood, or wheelbarrows of weed, or bottles of Tide, or bitcoins, or EVE ISK, or solar energy in the form of charged batteries, or oil products, whatever it is, it'll be something other than the existing federal reserve currency system which is rapidly becoming irrelevant to the world, and soon to the USA.
    - mikecane 14y ago
      >>>What will 99% of the population use for an economic system? That is the problem of the modern world. Who intends to solve it? And it's not like Everything Has Been Done. Just look at the old crumbling infrastructure. Work needs to be done.
- VLM 14y ago
  "Second capitalism has actual, real information to base it's conclusion on, and nobody can unduly influence it's opinions for long." That would be an interesting society to live in. Your quote above is basically the opposite of the USA, which brings it pretty far from the premise of the original article. Also the most efficient long distance navigation path is a great circle route not a "straight" line. The geometry of projecting a round-ish globe on a flat map on a large scale has always been pretty messed up, so its actually kinda unusual for long trip to have the shortest route on a map be a straight line. One interesting startup idea related to the above is people have historically had all kinds of interesting compromise map projections, but it should be possible to compute and display an optimized custom map projection for any specified route with minimal distortion such that the shortest path really would be a straight(ish) line on that optimized map. I'm sure there's a forest of patents on this idea preventing progress of this idea, at least in the USA, see the original article, etc.
brc 14y ago
>the solution may be more Solyndras. Maybe we need some public institution - government or philanthropic - to grant loans at a 2 to 1 match for equity investment in companies that are tackling socially useful problems. This is just torching money. It's all very well to say you're trying to destroy value to reach a social goal, but if you throw good money after bad on failed business ideas - no matter how noble the quest - you're still making life worse off for everybody. Any good business that provides social benefit and has revenues higher than it's costs will go on to provide the benefits for many people. You can't just throw money at a problem and hope to make it go away. It's especially worse if you throw public money at a problem. Creating the next round of profitable companies hinge on the people involved understanding what goes into making a company profitable. If you hire a bunch of people and get them to tip public money into dead-end projects, all you've done is trained people to waste money. The problem in the argument you have made is that you're insisting that something like facebook doesn't improve peoples quality of life, when it's patently obvious that it does, or people wouldn't use it. I'm going to paraphrase-quote a pg essay here, but the point stays : 'it might be lamentable that people prefer beer and football to fine wine and opera, but you can't call it wrong when they have made that choice of their own free will'.

waps 14y ago

And what if "socially useful" - which effectively means whatever the current public opinion is - is ... wrong ? We are the very same people that once believed the earth is flat, and the people that proved that walking in a straight line between two points has to be less efficient than walking in a circle (the ancient Greeks. Why ? Because a circle is perfect. Despite proving that the shortest distance is just that straight line), were probably smarter than us, at least on average. Then it will just be a big net loss to everyone. Socially useful actually working is predicated on people's rational thinking actually producing good outcomes, and ... well, look at our history. The argument that "this time" we'll be right seems a bit unlikely to be true, doesn't it ? The good thing/massive problem with capitalism is that it's an "intelligent" algorithm in it's own right, and the conclusions it reaches (the balance on your and everyone else's accounts) are guided by the algorithm, which doesn't care about morals, especially not about the fickle current version (we're < 40 years removed from the prevailing opinion being that skin color determines your worth. In lots of regions that's still true, like large parts of India, or the vast majority of muslim countries). The differences of opinion between people and "the system" are not really different from the differences between a dictator and it's subjects. Except, of course that the capitalist algorithmic dictator has several advantages. First, he cannot go mad (before you disagree, read up on a few dictators. It'll put things like the Iraq wars and the patent system in the proper perspective). Second capitalism has actual, real information to base it's conclusion on, and nobody can unduly influence it's opinions for long. Third this dictator doesn't care about race, social status, ... (imho conservatives are not fair when it comes to race and religion ("the poor are immoral" argument), liberals are not fair when it comes to social status ("the poor are dumb" argument). I don't want either to stay in power for long). We're switching to a world in which the vast majority of the population is useless, economically. There is no reason for them to be alive, no value in it. There is no way to prevent our capitalist dictator from realizing this is so, and it will -my biology book uses the term "correct". That's the real problem.

mikecane 14y ago
>>>We're switching to a world in which the vast majority of the population is useless, economically. There is no reason for them to be alive, no value in it. Then the algorithm is unfit for human use.
- VLM 14y ago
  That's insightful but probably not the way you meant it. Its insightful in that "everyone" or "every citizen" or whatever used to be involved in "the" economy (as if there can only be one) and its a perfect 1:1 mapping with the world or a geographic country. That's going away. Fast. What will 99% of the population use for an economic system? In the 3rd world there's a lot of drugs and crime, so thats possible. Whuffie or however doctorow spells it? HN Karma? Its kinda like how the "world of warcraft" economy means pretty much nothing to the people frozen out of it (the vast majority of the human population). Current trends show eventually 1% of the population will have a perfect 100% of the existing economy, at which point the old economy and the 1% will become completely meaningless to the 99%. Our economy will be based solely on trading wheelbarrows of firewood, or wheelbarrows of weed, or bottles of Tide, or bitcoins, or EVE ISK, or solar energy in the form of charged batteries, or oil products, whatever it is, it'll be something other than the existing federal reserve currency system which is rapidly becoming irrelevant to the world, and soon to the USA.
  - mikecane 14y ago
    >>>What will 99% of the population use for an economic system? That is the problem of the modern world. Who intends to solve it? And it's not like Everything Has Been Done. Just look at the old crumbling infrastructure. Work needs to be done.
VLM 14y ago
"Second capitalism has actual, real information to base it's conclusion on, and nobody can unduly influence it's opinions for long." That would be an interesting society to live in. Your quote above is basically the opposite of the USA, which brings it pretty far from the premise of the original article. Also the most efficient long distance navigation path is a great circle route not a "straight" line. The geometry of projecting a round-ish globe on a flat map on a large scale has always been pretty messed up, so its actually kinda unusual for long trip to have the shortest route on a map be a straight line. One interesting startup idea related to the above is people have historically had all kinds of interesting compromise map projections, but it should be possible to compute and display an optimized custom map projection for any specified route with minimal distortion such that the shortest path really would be a straight(ish) line on that optimized map. I'm sure there's a forest of patents on this idea preventing progress of this idea, at least in the USA, see the original article, etc.

brc 14y ago

>the solution may be more Solyndras. Maybe we need some public institution - government or philanthropic - to grant loans at a 2 to 1 match for equity investment in companies that are tackling socially useful problems. This is just torching money. It's all very well to say you're trying to destroy value to reach a social goal, but if you throw good money after bad on failed business ideas - no matter how noble the quest - you're still making life worse off for everybody. Any good business that provides social benefit and has revenues higher than it's costs will go on to provide the benefits for many people. You can't just throw money at a problem and hope to make it go away. It's especially worse if you throw public money at a problem. Creating the next round of profitable companies hinge on the people involved understanding what goes into making a company profitable. If you hire a bunch of people and get them to tip public money into dead-end projects, all you've done is trained people to waste money. The problem in the argument you have made is that you're insisting that something like facebook doesn't improve peoples quality of life, when it's patently obvious that it does, or people wouldn't use it. I'm going to paraphrase-quote a pg essay here, but the point stays : 'it might be lamentable that people prefer beer and football to fine wine and opera, but you can't call it wrong when they have made that choice of their own free will'.