Shortly after TechCrunch50 this year, Sarah Lacy wrote a post entitled Memo to Start-ups: You’re Supposed to Be Changing the World, Remember?
There was a common gripe about the companies launching there: Not enough passion, not enough swinging for the fences, not enough trying to change the world. There were too many people building safe businesses, too many companies just trying to make existing things slightly better, and too many people wanting to be the next Mint.com, not the next Google. Nothing against Mint, but Silicon Valley wasn’t built on $170 million exits.
I completely disagree. Mint is an absurdly successful business. Mint has changed the world. They have fundamentally changed the way that a lot of people budget their personal finances.
There are a handful of problems in the world today that, if you solve, will make you rich and thoroughly change the way humans live. Off the top of my head: low-cost carbon neutral building materials, curing cancer or AIDS, cost-effective energy storage and delivery to adequately utilize solar and wind power, and a system to enable us to affordably drive carbon neutral automobiles. There are more I’m sure. But those require a ton of technical expertise (probably a PhD in one particular type of science or engineering), a ton of funding, and a ton of time to even attempt to solve.
It’s a different world than it was during the dot com boom. The web has matured to the point where the types of opportunities that created eBay or Amazon are fewer and farther between. This isn’t a bad thing. There seems to be this common misconception of what businesses should be doing. The role of business has and always will be to profitably meet customer needs. Business is a win-win for both sides.
How Twitter continues to get funding without a dollar of revenue blows my mind. The Twitter bubble will burst because it isn’t a viable business model. The crazy thing is that they know this! They know that as soon as revenue is turned on they will be worth significantly less. Their only hope is a large buyout pre-revenue. A large buyout by some big company that can afford to lose a ton of money on the deal. Is this what entrepreneurs should be shooting for?
Google didn’t just come from nowhere. They took the relevancy algorithm of search results and improved upon Yahoo and AltaVista and all of the other initial search engines. With AdWords they improved Overture. With Gmail they improved upon Hotmail and Yahoo Mail. None of those things came out of left field. They were all built upon the previous innovations that paved the way for them.
Business is really simple: you have something I want, and I’m willing to pay for it. In doing so, you turn a profit. You hire more people and more jobs are created. Eventually, if you’re doing a good job and customers are happy, there will be competition that will try to one-up you in some facet of the business. That’s how the majority of sustainable innovation happens. In tiny little increments by all sorts of regular people. It might not be sexy, but “making things slightly better” is how the world improves.