The Unsolved: Why Startups Are Failing Us
Here’s a short story. Johnny is in NorCal for a few days and wants to know what the waves are like at Mavericks, one of the most famous beaches in the world, just north of Half Moon Bay. Johnny’s following Bhodi on Instagram who posted some “sick” wave shots but that was a few days ago. “If only there was some app for Mavericks to check the surf conditions” Johnny thought. Then it hit him “Brah, what if all surfers had an app to check conditions of local beaches and hear how the waves are riding, straight from the surfers there.”
Johnny drops everything, including his long-board. Teaches himself to code. Builds a prototype of “Waves.” A designer friend joins his venture. They raise an angel round. They hire a few more developers and release social features. Top professional surfers join and promote it. They start pitching for a series A round of venture capital funding to accelerate growth but are finding it hard because the product isn’t going viral like they hoped. It solves a need, just not a big enough one to justify millions of dollars. There are pockets of rabid fans but after another few heartbreaking months, it’s clear that Waves will never be considered a successful investment. Johnny posts a heartfelt blog post, they turn the service off, and return what’s left of the investment.
A week later another surfer, Tyler, is in NorCal and wants to know what the waves are like at Mavericks, just north of Half Moon Bay. Same problem, different day.
No matter where you are, or who you are, we are all awash with problems to be solved. Surfer problems. Celebrity problems. Food shelter problems. Kansas City problems. Trans-gender problems. Republican problems.
These problems are unsolved, and they will remain that way as long as we concede our problem solving ability to startups.
With more startups than we can keep track of and more apps than can fit on our phones, maybe it’s time for a deeper look at what we are getting for all of this activity, and more importantly, what we are not getting.
Software is Eating Someone’s World
A few years ago, the phrase “there’s an app for that” became popular.
Originally, it was a marketing slogan. But it represented much more; it was an expression of the idea that software could solve all of our problems, and that anything in the world around us could also be found and accessed online.
In the universe of technology giants like Google, Facebook, and Apple, that expression is summed up in Marc Andreessen’s now famous line about software…
If you live and work in Silicon Valley or within its gravitational pull, “software is eating the world” is a constant mantra. If you’re nowhere near California and don’t work for a technology company, it affects your life too, not because of what happens but precisely because of what doesn’t happen.
Most of the frequently used apps on your phone don’t represent a lone coder working in their spare time. Behind that app icon is a team of developers, designers, growth hackers, angels, and often, venture capitalists. That means your problem better be worth a lot of money to a lot of people. If it’s not, then no, there probably isn’t an app for that.
A more realistic refashioning of “is there an app for that” is one that talks in the language of economics, of supply and demand, since with very few exceptions, money (or the lack thereof) is what drives app or software creation. In other words, technology solutions are often spun up and executed not because someone asks “is there an app for that?” but because someone is asking “is there a market for it?”
That question in turn raises another: who, exactly, is asking the question? And what threshold of users and dollars have to be met before your problem is worth solving?
We Solve the Problems We Experience
People tend to solve what they know about, and what affects them on a day-to-day basis.
For many of us this means figuring out when to exercise, how to set aside time for friends, and our financial plans for the future. But if you’re an engineer or developer the solutions you create in the form of an app or software ripple much further than the pond that constitutes your daily life.
A 22 year old white male living in the San Francisco Bay area with some serious disposable income would have to dig deep to find a need unmet by software. Fresh juice delivery? Done. Valet delivery? Done. Delivery delivery? Done. Can’t decide what new tech gadget to buy? Done. What clothes to wear? Done. Need to send flowers in the next hour? Done. Your child’s private school not alternative enough? Done. Need to rent a house cleaner, a wardrobe, or even a landlord? Done, done, and done.
Of course, these services theoretically could be enjoyed by anyone, but the intersection of various forms of privilege creates a powerful market opportunity, so that is where our solutions gravitate.
The hard truth is that the reason we constantly get apps that solve the problems of 22 year old males (for example, a readily available supply of dates without having to do a lot of work) is because that’s whose building them. They seem important and world shattering because that’s what they are, to the people who created them.
We Need Diversity… in Markets
One way to combat this narrow / privileged set of problems & solutions is to widen the field of people working on software. More diversity in life experience and in problems encountered help us create better, more representative solutions. While teaching the world to code has its applications, if you don’t have the time or even know about the opportunity, then you don’t get to participate in the solving of problems with software. You must concede your solutions to software developers, and that’s troubling with or without a diverse group of coders.
There’s no question it’s important that we take inclusive approaches in supporting women, people of color, trans individuals, and other underrepresented groups in tech. But software still requires an army of developers, designers, growth hackers and other professionals to scale. Simply put, we are still subject to that all powerful question, “is there a market for it?” or even further, “is there a billion dollar market for it?”
“But.. but… this is just the free market economy at work!”
Of course it is, and that’s what happens when our solutions are bound to startups bound to venture capitalists bound to limited partners who are wholly disconnected from the original problem. The problems that the transgender community faces shouldn’t need to wait until there is a large enough market. Nor should solving the problems of Latino ESL students in Chicago require a billion dollar opportunity or be left solely to the generosity of non-profits.
Investors Ride Unicorns, People Ride Horses.
The jet fuel that keeps the startup ecosystem floating is venture capital, a high risk investment that requires out-sized returns.
A solution to an investor looks very different than a solution to the end user. The venture capitalist is looking for a unicorn, that rare and magical company that is capable of returning many times their investment. Often the unicorn will make up for all the failed investments in their portfolio, the “failed” solutions.
At the same time that investors are looking to ride a unicorn to victory, most of us would be just fine with a horse. Horses look just like a unicorns, except they are missing that billion dollar horn. They are the everyday solutions that make our lives better. Local restaurants that feed us, businesses that serve our needs humbly and honestly, friends and family that help us solve problems, whether they are fundamentally scalable or not.
Startups almost always start out as horses, solving someone’s problem. But they usually don’t solve it for everyone (or everyone fast enough), and that’s where it falls apart. Only when value for people and for investors aligns do we get a horse that can escape the glue factory.
Most startups fail not because they fail to solve the users’ problem, but because they fail to solve it in a way that delivers out-sized returns to their investors. While the users matter early on, it’s the investor’s problem that drives the company forward.
“But can it scale?” is just code for “but can investors make huge returns?” which is unfortunate because a generation of creative and talented people have convinced themselves that problems that can’t scale aren’t worth solving.
When a startup fails, everything must go. If you have ever used a service or app that was shutdown, acquired and discontinued, or failed to be supported, then you know whose problem was left unsolved.
When a startup ends up in the deadpool, its solution does too. The problem becomes unsolved again. One step forward, one step back. This is hardly the technological advancement we’ve been promised.
99 Problems and an App for Each One
So, what about those apps mentioned earlier? Are they really capable of being a market unto their own?
For a long time it was assumed they could solve every issue, especially through customization and location…but they’re turning out to have ugly side-effects. Apps are expensive and time consuming to create and maintain. iOS users get their problems solved first, then Android users. Windows and other OS users are the untouchables of the platform caste system. Simply by opting into a smaller market opportunity, these users drastically reduce the value of getting their problems solved.
On the open and free web, net-neutrality is seen as a fundamental right, but in the free market of mobile platforms, app-neutrality would be an egregious violation.
Within our phones these apps act as physical artifacts that need to be installed, and then have to be updated or replaced when they are out of date, which is constantly. Each must be downloaded, installed, permissions granted, and then we get to see if we actually enjoy using it.
The web isn’t dying, it’s as useful as it’s ever been. But on our phones it is being replaced by hundreds of little single purpose browsers, each with their own user interface to learn, network effects to build, and investors to feed.
But this isn’t just an ‘apps vs web’ debate, these problems also can’t be solved by the World Wide Web because…
Most Problems Aren’t Really World Wide
Nowhere is this contrast more stark than in the interactions of daily life, in our connection to what’s around us.
Aside from the fact that many local problems don’t generate the numbers to justify creating a new app or company, they also don’t automatically require someone to swoop in and fix them with complicated code. Sometimes the need for a solution, especially a local one, is for and by a handful of people. Many problems and solutions are unique, ephemeral, local, and shouldn’t require the time it takes to write 1,000 lines of code, let alone to learn software development in the first place.
The pothole on Front St. The long line at Bill’s Bar. Reality is, most Millsmont problems require Millsmont solutions. If you haven’t heard of Millsmont, don’t feel bad, neither have software developers in San Francisco, just 15 miles away.
World Wide platforms like Twitter are filled with these sorts of misplaced questions.
Mobility and location on our phones are a powerful opportunity, but the apps and software we have now are often too narrow and difficult for a user to shape to their individual needs. The fact that such tropes as “Airbnb for X,” “Tinder for Y” or “Uber for Z” even exist at all serve to re-enforce how inflexible our current solutions are.
Wordpress is the biggest workhorse on the internet. A platform simple enough to be used by almost anyone and yet solve 1,000 problems (with the right plugin). It’s no wonder that it powers 23% of the web. But it’s open source, and over a decade old. In its place we’ve been given a model of “one problem — one startup.” If the vast majority of startups fail, than this level of inefficiency should be nauseating to anyone who’s not a venture capitalist, and maybe to the venture capitalist too.
Solving Our Long-Tail Problems
There will always be an endless supply of problems in need of a solution. Those on “page one” will find their solutions, but the rest, what you could call ‘long tail problems,’ will largely go unsolved, especially with technology.
This long-tail is often beyond the province of startups and venture capitalists because they will never be worth billions of dollars. Many are not even worth $100. They won’t be featured in tech news publications or championed by rock stars or social media gurus. Many of them will never be noticed by anyone outside of the people solving them. But they still matter.
At the root of any systemic problem there is not a singular underlying factor, but instead hundreds, sometimes thousands, of unsolved long-tail problems. None of which are attractive to venture capital investors. Systemic problems seem intractable because they are… to a mindset that requires everything to be solved with scale.
The ability to code matters, but people also need to be able to solve their own problems without elaborate software development or millions of dollars to confirm that it’s worth solving in the first place.
Ironically, one way of dealing with this is actually through software. Instead of creating yet another specialized app and startup, we need more workhorses that enable people to solve the problems they know best. Simple, flexible, and well designed networks/platforms that allow people to ship and start using their own raw and unvarnished solutions, rather than wait for others to deliver a shiny new app or startup to save the day. We need more wordpresses, more open platforms, and more decentralized problem solving.
At localweb.is we are working on something that will solve many of those problems that we mentioned earlier. The ones that aren’t world wide and the ones that will never be unicorns. We believe the people that have these problems are also the people who have the solutions. It’s time to enable them. It’s time to solve for the unsolved.
Humble thanks & appreciation to the following folks who provided us with feedback on a first draft: Carla Willard, Dave Domm, Katie Lents, Shawn White, Cristina Juesas, Laura Horne, Romy Misra, and Martin Cyster.
