8 ms·

I like parts of this article more than others. For example, while I share a certain sense of frustration that SV seems to spend a disproportionate amount of re

by patio11 12y ago

I like parts of this article more than others. For example, while I share a certain sense of frustration that SV seems to spend a disproportionate amount of resources on mobifotosocialgames, smartphones and their downmarket progeny are an enormous quality-of-life improvement for broader America. There's virtually nothing a cash-poor-responsibility-rich person needs to do that having a smartphone does not make them better at. Commute to work? Apply for benefits? Schedule appointments with doctors? Successfully keep those appointments? Keep tabs on kids while working/errands? A smart phone makes you better. As an entrepreneur who makes stuff for people who are not the usual suspects, the challenges to doing this are numerous and largely not conducive to the VC-funded trajectory. You have to convince people to pay you money for your services, you have to be able to service those customers profitably, and the customers are disproportionately pathological. Most of the software they consume is getting written by AppAmaGooFaceSoft because they can underwrite it with their massive monopoly rents, subsidize the cost straight down to zero, and deal with the CS headaches attendant in serving poor people by sending them to a call tree / web app backended by a Markov chain backended by /dev/null. There's also a bit of "every problem has a software solution" enthusiasm which is, well, a bit overstated. (Sometimes this isn't stated outright, but when you expect to do something meaningful on e.g. $500k in an angel round, you implicitly expect to do something meaningful 100% in software, because $500k isn't even enough to launch a single McDonalds in the real world.) Many problems have an 80% software solution attached to a 20% "interface with the real world" mandatory bit. The marginal cost of that last bit, though, is hundreds, thousands, or tens of thousands of dollars per client served. Or it has highly non-trivial political/regulatory barriers to entry, like "Convince an incompetent, intransigent, and politically invulnerable agency to disemploy half their workforce, who are by the way mostly veterans, whose main professional competence is doing an important thing slowly, poorly, and expensively."

incision 12y ago
>'Commute to work? Apply for benefits? Schedule appointments with doctors? Successfully keep those appointments? Keep tabs on kids while working/errands? A smart phone makes you better.' Spot on. Years ago, I maintained a couple of desktops in a sort of 'job center' where people could submit electronic applications for various low-end, entry-level positions. The most common issue - no email address. Second most common - has email, but has to take the bus to the library to check it. Cheap smartphones have been a boon at that level. There's a whole segment of the population that was missing out on all the benefits of being connected until very recently.
- jl6 12y ago
  Here's a seemingly rare example of something that has unambiguously and significantly improved the lives of millions of poor people across the world. What lessons can we learn to try to repeat that success?
- julian_t 12y ago
  > The most common issue - no email address. Second most common - has email, but has to take the bus to the library to check it. Absolutely. We have come to know a couple of guys, one ex-homeless, who have real troubles here. We lent one an old iPad and that, together will free wifi in coffee shops and malls, has enabled him to talk to government agencies and job centers.
  - narrator 12y ago
    These days you can buy no-name android tablets from Walmart for $44. For example: http://www.walmart.com/ip/Ematic-7-Tablet-with-4GB-Memory-and-Google-Mobile-Services/23350692 http://www.walmart.com/ip/Ematic-7-Tablet-with-4GB-Memory-an... That's cheap enough that there's no reason for a poor person NOT to have one.
    - rmc 12y ago
      For some $44 is a lot. Jack Monroe was poor and a blogger. She wrote a powerful piece about it once: ( http://agirlcalledjack.com/2012/07/30/hunger-hurts/ http://agirlcalledjack.com/2012/07/30/hunger-hurts/ ): > This morning, small boy had one of the last Weetabix, mashed with water, with a glass of tap water to wash it down with. ‘Where’s Mummys breakfast?’ he asks, big blue eyes and two year old concern. I tell him I’m not hungry, but the rumblings of my stomach call me a liar. But these are the things that we do. > ... > Then you start to take lightbulbs out. If they aren’t there, you can’t turn them on. > ... > Poverty is the sinking feeling when your small boy finishes his one weetabix and says ‘more mummy, bread and jam please mummy’ as you’re wondering whether to take the TV or the guitar to the pawn shop first, and how to tell him that there is no bread or jam. These are the people who can't afford $44.
rattray 12y ago
Agreed. VC's fund companies that target markets that can be served by VC-fundable companies. And most young entrepreneurs from top schools hear that it's easiest to Get Rich Quick by founding a VC-funded company. But those aren't the only kinds of companies worth building, and "young entrepreneurs from top schools" aren't the only people who can build good companies. We shouldn't look to them (err, ourselves) as "humanity's only saviors". Which I think this article makes the mistake of doing. A similar problem that I have with this piece is an over-reliance on entrepreneurs - that is, the free market - to solve the problems of "the unexotic underclass". The free market will solve the problems of people (and businesses) who have discretionary income. That's how capitalism works. Capitalism also has a lot of inequality baked-in. He shouldn't be surprised that difficult-to-serve, low-income individuals are failed in America. Keep in mind, too, that the other part of "discretionary income" is "discretionary". Schools, Hospitals, Government Agencies like the VA? They typically have terrible purchase processes (and generally poor management) that make it almost impossible for entrepreneurs to sell to them. I recently folded an Education Technology company because schools are so difficult to sell to and have so little money. Don't blame the entrepreneurs here; blame a government which over-regulates and under-funds schools, the VA, and other services. (And then vote to make a better one!!) All that being said, I do agree that there are opportunities for entrepreneurs in these markets. They may be hard to find, but we're not going to do it by holing up in Tech/Wealth bubbles like SF and NYC. Spending some time in the heartland may be a great way to find those rare business models that could profitably serve the underserved.
- marcus_holmes 12y ago
  Agree with the "young entrepreneurs from top schools" bit. Going to a top school doesn't correlate with being a good entrepreneur. It maybe correlates with intelligence and drive, but more closely correlates with privilege and connection. There's an interesting correlation between immigrants and entrepreneurship (old-school building a profitable business entrepreneurship, not SV-type scaling an unprofitable business entrepreneurship). My take on this (utterly my own opinion) is that immigrants are less likely to get jobs, so more likely to start their own businesses. So the people who are going to solve these problems are probably not going to be VC's, Ivy leaguers, incubators, or in Silicon Valley. They're probably going to be bootstrapping (nice bonus: if you're used to living on a very low income then bootstrapping is a lot easier). Maybe the problem here then is not the entrepreneurs, but the media and reporting. We only hear about young entrepreneurs building something awesome with technology. Maybe there's an interesting story about poor, underprivileged people dragging themselves out of poverty with technology?
SomeCallMeTim 12y ago
The article resonated with me when it mentioned "(or, because they suspect no one will invest in what they really want to do)." >Many problems have an 80% software solution attached to a 20% "interface with the real world" mandatory bit. My "Big Problem" is Education. I'd almost flip those numbers -- 20% software, 80% "interface with the real world." Throw in non-trivial entrenched interests including existing teachers who think they know the best way to teach, and a significant fraction of people in this country who went through a public school education and who might be prone to object to teaching kids in a new and different way. But I still want to try. I think that it's a problem that will actually address many of the "unexotic big problems" plaguing the world today. The big fix is for the poor. Get education right and you can make strides against poverty from multiple directions. The educated adults you produce will be more able to be employed, or to create employment opportunities (depending on temperament and opportunity). That would help single mothers and the rest -- eventually.
- trevelyan 12y ago
  I run an education startup and respectfully disagree -- parent poster is correct that the industry is really not welcoming for entrepreneurs, at least for people who have ambitions for things like home ownership or healthcare or relationships. The major problem is that people who need to learn something are by definition the least able to evaluate what they need. So the dominant incentive is for companies to produce crap and then market the hell out of it, or develop connections and feed off public credit ("you may qualify for state assistance!")... almost anything except for producing stuff people actually need and trying to sell it on its virtues. And then there is the lack of money, because student budgets are often directed elsewhere, such as to their expensive but ineffective accreditation programs and university classes. This transforms meaningful work in the education space into an uphill struggle against funded businesses with predatory business practices, and while word-of-mouth can benefit you over them in the long-run, the viral loop goes slower in education than in other areas and it is very, very difficult to build effective placement in commercial sales channels like search engines. More direct connections between education and employment would help, but the connection is often weaker than one would think from the political rhetoric thrown around, especially considering that education is often a proxy term for "credentials" or "signaling" in public rather than knowledge.

by patio11 12y ago

incision 12y ago

>'Commute to work? Apply for benefits? Schedule appointments with doctors? Successfully keep those appointments? Keep tabs on kids while working/errands? A smart phone makes you better.' Spot on. Years ago, I maintained a couple of desktops in a sort of 'job center' where people could submit electronic applications for various low-end, entry-level positions. The most common issue - no email address. Second most common - has email, but has to take the bus to the library to check it. Cheap smartphones have been a boon at that level. There's a whole segment of the population that was missing out on all the benefits of being connected until very recently.

jl6 12y ago
Here's a seemingly rare example of something that has unambiguously and significantly improved the lives of millions of poor people across the world. What lessons can we learn to try to repeat that success?
julian_t 12y ago
> The most common issue - no email address. Second most common - has email, but has to take the bus to the library to check it. Absolutely. We have come to know a couple of guys, one ex-homeless, who have real troubles here. We lent one an old iPad and that, together will free wifi in coffee shops and malls, has enabled him to talk to government agencies and job centers.
- narrator 12y ago
  These days you can buy no-name android tablets from Walmart for $44. For example: http://www.walmart.com/ip/Ematic-7-Tablet-with-4GB-Memory-and-Google-Mobile-Services/23350692 http://www.walmart.com/ip/Ematic-7-Tablet-with-4GB-Memory-an... That's cheap enough that there's no reason for a poor person NOT to have one.
  - rmc 12y ago
    For some $44 is a lot. Jack Monroe was poor and a blogger. She wrote a powerful piece about it once: ( http://agirlcalledjack.com/2012/07/30/hunger-hurts/ http://agirlcalledjack.com/2012/07/30/hunger-hurts/ ): > This morning, small boy had one of the last Weetabix, mashed with water, with a glass of tap water to wash it down with. ‘Where’s Mummys breakfast?’ he asks, big blue eyes and two year old concern. I tell him I’m not hungry, but the rumblings of my stomach call me a liar. But these are the things that we do. > ... > Then you start to take lightbulbs out. If they aren’t there, you can’t turn them on. > ... > Poverty is the sinking feeling when your small boy finishes his one weetabix and says ‘more mummy, bread and jam please mummy’ as you’re wondering whether to take the TV or the guitar to the pawn shop first, and how to tell him that there is no bread or jam. These are the people who can't afford $44.

rattray 12y ago

Agreed. VC's fund companies that target markets that can be served by VC-fundable companies. And most young entrepreneurs from top schools hear that it's easiest to Get Rich Quick by founding a VC-funded company. But those aren't the only kinds of companies worth building, and "young entrepreneurs from top schools" aren't the only people who can build good companies. We shouldn't look to them (err, ourselves) as "humanity's only saviors". Which I think this article makes the mistake of doing. A similar problem that I have with this piece is an over-reliance on entrepreneurs - that is, the free market - to solve the problems of "the unexotic underclass". The free market will solve the problems of people (and businesses) who have discretionary income. That's how capitalism works. Capitalism also has a lot of inequality baked-in. He shouldn't be surprised that difficult-to-serve, low-income individuals are failed in America. Keep in mind, too, that the other part of "discretionary income" is "discretionary". Schools, Hospitals, Government Agencies like the VA? They typically have terrible purchase processes (and generally poor management) that make it almost impossible for entrepreneurs to sell to them. I recently folded an Education Technology company because schools are so difficult to sell to and have so little money. Don't blame the entrepreneurs here; blame a government which over-regulates and under-funds schools, the VA, and other services. (And then vote to make a better one!!) All that being said, I do agree that there are opportunities for entrepreneurs in these markets. They may be hard to find, but we're not going to do it by holing up in Tech/Wealth bubbles like SF and NYC. Spending some time in the heartland may be a great way to find those rare business models that could profitably serve the underserved.

marcus_holmes 12y ago
Agree with the "young entrepreneurs from top schools" bit. Going to a top school doesn't correlate with being a good entrepreneur. It maybe correlates with intelligence and drive, but more closely correlates with privilege and connection. There's an interesting correlation between immigrants and entrepreneurship (old-school building a profitable business entrepreneurship, not SV-type scaling an unprofitable business entrepreneurship). My take on this (utterly my own opinion) is that immigrants are less likely to get jobs, so more likely to start their own businesses. So the people who are going to solve these problems are probably not going to be VC's, Ivy leaguers, incubators, or in Silicon Valley. They're probably going to be bootstrapping (nice bonus: if you're used to living on a very low income then bootstrapping is a lot easier). Maybe the problem here then is not the entrepreneurs, but the media and reporting. We only hear about young entrepreneurs building something awesome with technology. Maybe there's an interesting story about poor, underprivileged people dragging themselves out of poverty with technology?

SomeCallMeTim 12y ago

The article resonated with me when it mentioned "(or, because they suspect no one will invest in what they really want to do)." >Many problems have an 80% software solution attached to a 20% "interface with the real world" mandatory bit. My "Big Problem" is Education. I'd almost flip those numbers -- 20% software, 80% "interface with the real world." Throw in non-trivial entrenched interests including existing teachers who think they know the best way to teach, and a significant fraction of people in this country who went through a public school education and who might be prone to object to teaching kids in a new and different way. But I still want to try. I think that it's a problem that will actually address many of the "unexotic big problems" plaguing the world today. The big fix is for the poor. Get education right and you can make strides against poverty from multiple directions. The educated adults you produce will be more able to be employed, or to create employment opportunities (depending on temperament and opportunity). That would help single mothers and the rest -- eventually.

trevelyan 12y ago
I run an education startup and respectfully disagree -- parent poster is correct that the industry is really not welcoming for entrepreneurs, at least for people who have ambitions for things like home ownership or healthcare or relationships. The major problem is that people who need to learn something are by definition the least able to evaluate what they need. So the dominant incentive is for companies to produce crap and then market the hell out of it, or develop connections and feed off public credit ("you may qualify for state assistance!")... almost anything except for producing stuff people actually need and trying to sell it on its virtues. And then there is the lack of money, because student budgets are often directed elsewhere, such as to their expensive but ineffective accreditation programs and university classes. This transforms meaningful work in the education space into an uphill struggle against funded businesses with predatory business practices, and while word-of-mouth can benefit you over them in the long-run, the viral loop goes slower in education than in other areas and it is very, very difficult to build effective placement in commercial sales channels like search engines. More direct connections between education and employment would help, but the connection is often weaker than one would think from the political rhetoric thrown around, especially considering that education is often a proxy term for "credentials" or "signaling" in public rather than knowledge.