Entrepreneurship · Social Entrepreneurship

Why is so much of Silicon Valley obsessed with small ideas that don't solve a problem?

Rohit Mittal Data Scientist at Popsugar

March 31st, 2015

The world does not need another mobile photosharing app or SMS-based event planning system. The truth is that it's not that hard to get into commercialization of more complex technology if you're willing to invest time and energy into getting the background. Why do the vast majority of startups seem to settle for low-success-rate vanity apps than solve a real problem?

Though the tone of this question is intentionally accusatory, there's a real effect here that I think can be discussed without making a value judgement. That is, without saying that mobile local photosharing is "less important," it's qualitatively different from tech transfer, which when done successfully is usually higher economic value as well as "impact." Why do so many fewer people pursue this?

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Steve Simitzis Founder and CEO at Treat

March 31st, 2015

Communicating and sharing memories and stories with each other is one of the things we do that defines us as human. I wouldn't consider these small ideas. What big problem did Twitter set out to solve - yet now the disenfranchised depend on the platform to be heard by the world.

Yes some of these apps are gratuitous or redundant and most of them fail, but every now and then we get one that enables new ways of understanding each other. I hope these experiments never stop.

Shingai Samudzi

March 31st, 2015

Look at the demographics of Silicon Valley.  Most of those consumer-oriented products you rail against have business models geared largely at capturing the discretionary income of that demographic group.  From a profit perspective, that's a fair way to perceive investment - requires minimal up front investment and targeted at the portion of the population with the greatest spending power.

That said, the lack of diversity or widespread investor cultural sophistication has also largely limited SV's investment success to the US consumer market.  It has failed pretty abysmally when attempting to port that investment mindset into China, SE Asia, or Africa.

Vijay MD Founder Chefalytics, Co-owner Bite Catering Couture, Independent consultant (ex-McKinsey)

March 31st, 2015

Silicon Valley is an echochamber disconnected from real people with real problems.  Also, it's hard to get investors to get excited about something complicated that they don't understand.

On the other side, it's actually great to be able to work more deliberately in a space where you're not competing against VC funded entities that can defy economics and take the air (and margin) out of a market until you actually figure out what paying customers want to buy.

You'd think that 20 year olds don't have the life experience to understand most of the world's needs.  And I believe you'd be correct...I had very different needs at 20 than I develop for now. 

Benjamin Olding Co-founder, Board Member at Jana

April 1st, 2015

...Popsugar is an example of tech transfer? :) I'm not sure I trust you to know what is simple & what is meaningful. I know I don't!

It's easy to observe what consumer apps are being funded, because they employ a marketing department to keep you informed; are you sure you know everything that's happening in the investment world?

If we accept your premise there is an over-investment in consumer communication tools (and I'm skeptical you know this), then I think the reason would likely be distribution. Distribution is a huge challenge for small companies - bigger than technology challenges oftentimes.

Hotmail really was genius, turning each user's email into a free advertisement for their product. Proprietary communication tools are the same idea: you can only receive the message if you are a user.

Besides the communication tool investment, the other investment you may feel is done to excess is the market investment. Again, the market model has the advantage of using the users to spread word about the market (though there's a pretty hard initial barrier to overcome). Once it gets rolling, it's hard to stop. I doubt the "more meaningful products" you have in mind have this property.

Since we all seem willing to make vague generalizations in this thread, I'll add mine: engineers equate companies with products far too often. The product is just a piece of what is happening. If you feel you see better, more meaningful products that are not being pursued or funded, you might first consider how products are distributed (not delivery, but sales & marketing) before you conclude "entrepreneurs are too young" or "VCs are too shortsighted."

Just my view... Hopefully I don't sound too annoyed; I appreciate your question was designed to spark a response, and I've tried to answer in that spirit.

David Schwartz Multi-Platform (Desktop+Mobile) Rapid Prototyping + Dev, Tool Dev

April 1st, 2015

I don't live in Silicon Valley and I don't talk to VCs, so I can't really comment from that perspective. I'm a software developer approaching 60, and wrote my first program in 1972 when I was 16. I love software and software technology; however, I find it quite frustrating that we employ the same tools and processes to develop software today as was used in the 1960s. I'd love to come up with better, more efficient development tools. For one thing, I'm a highly visual thinker; I see solutions in my mind, and having to translate them into a verbal expression (as code) to implement them is like having to plant grass in a detailed pattern and watch it grow. You'd think VCs would be lined-up to fund something like this, but so much software tech has shifted to open-source that it's hard to make money with it any more.

That said, I'm not infatuated with the technology we create for mass consumption the way most people are, including other programmers. I don't care about the things that seem to be catching fire in the app world -- they seem to cater to the more narcissistic side of humanity which holds very little appeal to me.

The only thing I can suggest is that there are so many of these silly "reach out and touch people" apps because people ARE narcissistic, and our society seems to be making people paranoid of interacting with others directly. If you're a VC, you're probably looking for anything that's subject to the Law of Large Numbers, which is anything that appeals to tens of millions of kids (who are infatuated, if not addicted to mobile tech) where a small fraction of them are capable of generating some kind of monetary activity.

However, I think we're in a kind of infatuation phase where the market tends to get all googely-eyed over fairly simple things. It'll wear off, and more complex apps will begin to come on the scene. 

I'm working on something myself that's based on an idea originally conceived 20 years ago that has been waiting for the technology to evolve sufficiently to make it feasible. And the feedback I'm getting is showing me ways to bust it out into an entirely new experience, given the ability of mobile apps to fundamentally transform the underlying approach and process.

Take a look around the app landscape and ask yourself, "how many of today's apps are simply linear extrapolations of existing concepts with lots of eye-candy, versus those that represent totally transformed approaches?" Mobile tech has the potential to transform the ways we do things, but I haven't seen much in that direction yet. Which tells me the game has barely begun!

Ran Hadary Founder & CEO at RIDARTECH

March 31st, 2015

I think you are absolutely right in your simple question. 

But I don't think there is a simple answer, however, one that comes immediately to my mind is that everybody (or at least a vast majority) is looking for a quick win, one that will make you instantly rich and famous.

Maybe an answer to your question, (a) most people don't like to work hard and explore other areas.
(b) If you are stuck in the same puddle with our high-tech folks you don't get to see the real world and the real problems.

Stephen Cataldo

March 31st, 2015

I'd break your question into 2 parts: what inspires developer/designer bootstrappers, and what do investors fund. So one answer is what someone whose profession is web development will know about and use ... photosharing and consumer apps, or github and tech tools. (Also, many vanity-apps are often easier, and partly a learning process for developers, rather than real businesses.)  And I think a big part of the problem is investors preferring a slim chance of making astronomical returns instead of a good chance of making good returns, trying to be the next big thing instead of just meeting a niche need.

Mir H

March 31st, 2015

I think it's more about time and money issues. Large projects require a lot of money. Most small apps are done by folks who never quit their fulltime job. Also many entrepreneurs see small projects as a stepping stone to something bigger through right pivot once they meet right partners, get right funding, etc.

Mike Green Co-founder, ScaleUp Partners LLC

April 1st, 2015

I cannot presume to know how much of SV is obsessed with vanity apps and small ideas, but that focus dovetails consistently with our societal trajectory, which may explain why startups are playing to the lowest common denominator in the American market. That's where consumers are willing to spend their dollars. And founders are catering to consumer trends in a "Me" era. That said, there's room for counter-culture innovations but those kinds of market introductions have a higher risk associated with them. Additionally, they require founders with extraordinary vision and capacity to fully articulate how such an innovative platform can not only penetrate a target market, but create such a disruption of the current societal trajectory that it leads a new trend that it dominates. That's a billion-dollar idea but requires such a monumental leap of faith for investors that most founders won't bother. And sadly, most investors aren't interested in such world-changing socially redeeming market innovations when there's lower risk returns on catering to the vanity culture.  

Stephen PMP Project Management Professional

April 1st, 2015

Why? Because they can. It's also encouraged and "cool" in SV, and what's worse, it's now much easier to create these meaningless apps than ever before. So for them, it's like "why not" -  all my buddies are doing it! 

I agree, it's frustrating to see all of the repetition and thoughtless apps developed, but it's a launchpad for many of them to be able to say "Founder" on their resume. And hey, it's a dice roll that could just pan out and make them a lot of money.

Indulge us, what's your big idea, Rohit? :)

I know I've got a few!