Venture Capital Is Built on Serendipity

Software has as much potential as electrification or steam power, but instead the industry ignores markets and whole classes of people, which stunts how much it can affect our world

The venture capital ecosystem bills itself as a meritocratic miasma of genius, with smart founders getting smart money from smart investors. In reality, there is an overwhelming reliance on privileged people bumping into each other at just the right time. This serendipity has spawned some great companies:

• Warby Parker was started because someone in an elite graduate program lost an expensive pair of glasses.
• Apple was started by a couple of guys who met at a hobbyist group in the computer heartland.
• Google’s founders met when one of them toured the other around Stanford for a CS graduate program.

But how many great problems are being ignored because we didn’t get that lucky alignment of particles?

The remodeling industry is a perfect example. It’s an $83 billion market, yet it’s only now starting to see software solutions. The industry itself bemoans neglect by the software industry. The article linked above has some impressive stats about how much waste they experience:

…studies suggest 30 percent of the construction process is re-work, 60 percent of labor is wasted, and only ten percent of losses are due to wasted materials.

Shouldn’t there be companies fighting tooth and nail over that market? Shouldn’t there be tons of solutions out there, spending money like Uber and Blue Apron are to acquire new customers and take a cut of the productivity gains?

I’m in the late-stages of having a garage built at my house and as far as I can tell, software was only used during design, not actual production. One of the contractors we considered seemed to be an Excel wiz, but wasn’t using software tailored for his industry. With better tools, these teams could have spent more hours working and thus made more money, my contractor could have done more jobs in the same amount of time and thus made more money, and yet I could have spent less on all of it and gotten it…