I find the tech scene to be focusing on many smallish insignificant projects like foolish apps rather on ideas that really mean something. And VCs seem to be supporting such startups with money, while not investing in better more meaningful ideas.


  • Many of the “better, more meaningful ideas” are to vague or broad in scope. I wouldn’t invest in them either. However, there are startups like Watsi that are doing meaningful work and are funded.

  • De-fog your glasses: the most meaningful thing to VC is money and ability to make lots of it quickly. Which does not compute to the time and effort required for making most meaningful biz ideas.

    • Plus, it’s only expected, given the extent of age discrimination going on. Think about it: When industry focuses on funding and hiring only the young, the biggest companies or funding stories will be centered around frivolous ideas, as is expected from young people. It’s what they do; they simply don’t have the experience/maturity/inclination for serious problems at that age.

    • I’m not speaking about my ideas. It just seems that in general there are many big investments and acquisitions of startups that produce no revenue whatsoever, but have high valuations. Instagram would be a good example. You can make a good case for Facebook’s high valuation, they have changed the way we communicate after all, or for WhatsApp’s, which has lowered the texting costs for millions of users around the world, but a photo sharing app that doesn’t even make money? Quite silly.

      There are many ideas out there. Startups that work on new transportation technologies, on improving energy generation technologies, and many etceteras which are undervalued and underestimated for the potential change they could produce. Of course, a team of 4 can’t make them work, and far more money and infrastructure would be needed in order to develop them, but still..

      • Instagram was purchased for close to a billion because they had tens of millions of users and were growing at a rapid rate. Pre-revenue businesses can have high valuations if they reach a large audience because you can instantly start generating money through advertisements. Nobody pays for Facebook but it makes a ton of money because of ads.

        Also, your basic premise is wrong. VCs are responsible for the money that wealthy people have invested with them. Their job is not to advance technology by investing in meaningful businesses. Their job is to get a quick return on their investors money. Many of the startups that you think are meaningless like Instagram do exactly that; less than 2 years after it was founded it sold for close to a billion dollars.

        It’s not easy to build a Tesla type of company; it takes a huge amount of investment and a proven entrepreneur like Elon Musk to do it. Not many VCs will take that risk.

        • Of course not. But Tesla will most likely still be here 20 years from now, servicing a massive market. Instagram? Not so much.

          • Well Fisker and a ton of failed clean-tech startups beg to differ. Tesla and SpaceX are an outlier. If you follow both companies you’d know if Elon didn’t risk his own money when they hit rough patches in 2009 – both would not be here today.

            Meaningful startups that change the world are by definition risky and investors’ goals are to find the highest return for the lowest risk and unfortunately it often results in fad investing.

  • Venture capital is an investment vehicle designed to fund the type of risk that traditional capital won’t touch. It is by it’s very nature highly speculative in nature and as a result requires higher risk adjusted returns to attract capital to fund the VCs.

    Historically, the types of companies capable of producing the outsize returns needed by VCs had really deep technologies. Today however the market is such that there are entire classes of consumer apps whose valuations aren’t based on technical depth but instead on user acquisition – which by the way isn’t easy either.

    As long as the broader market values these consumer apps highly the VCs will keep backing them. Why? Because VCs care about returns not changing the world. They may offer window dressing to the contrary but there’s no Nobel prize for venture investing.

    As an aside, I’d also argue that there has been a massive influx of new VC shops run by folks who don’t actually understand really deep technologies. That causes a bunch of companies to get passed over in favor of an app that causes text to disappear. Perhaps this is why venture capital as an asset class hasn’t actually performed well as of late. Perhaps if we got back to investing in long term bets instead of near term fads we would reward durable innovations and see new classes of game changing companies emerge.

    • I have not tried Cyber Dust but I understand why most chats, texts, pics should disappear. On the Twist (thisweekinstartups) video with Mark Cuban it is explaind well plus you get to see Cuban being Cuban………

      @kaffegeek

  • Why does every tech startup have to be meaningful or impact the world in a positive way? It is a noble cause to demand for more VC’s to invest in such products but there’s probably thousands of reasons why they don’t. The most common reason has already been mentioned: the product might not be economically feasible.

    Looks at all of the products that exist in the world today, not just the ones in the tech industry, but everything in the world. There is a lot of useless crap that we dont need – but people have invested money into it to get a greater financial return in the future.

    Its good to be socially responsible and to want to make a positive and meaningful impact on the world. However, you should not get upset or angry or want to change peoples beliefs because you think that they’re wrong.

    Rather than talk or complain, do something about it.

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