It’s Time for Tech to Step Up

There are many sad truths about the state of tech today:

It’s this last point to which I want to speak more about here (though I could talk on end about the first two). In fact, the first two are in many ways feeding the third. It has been acknowledged that the center of the tech industry, Silicon Valley continues to be obsessed with myopic first-world problems in part due to an ongoing lack of diversity (gender, race, and socioeconomic). This is the reason I have chosen to focus on rising tech cities — to avoid some of the past mistakes in these new ecosystems and broaden the scope of companies that are being funded.

Impact is not a dirty word

We understand that it’s easy to go after frivolous and trendy problems, but to leave the greatest issues to non-profits, philanthropy and governments to solve is putting us greatly at a disadvantage as a society. Further, the myth that alpha cannot be gained in a mission-based company needs to be debunked if we are to see this tide change.

Melinda Gates recently drew light on this issue, stating:

One thing that does bug me is that, even for the big world problems Bill [Gates] and I are talking about, sometimes the tech world thinks the solution is to give somebody an app. Well, that’s not going to change everything. I would also love to see more tech innovation on behalf of the world. “Let’s create the next thing that tracks my dog” — that’s fun and nice, but come on, there are people dying.

Melinda Gates on Tech Innovation, Global Health and Her Own Privilege
You would perhaps be demonstrating an excess of sympathy to feel sorry for ultrawealthy philanthropists. But it’s fair…www.nytimes.com

Entering the VC space, I have been bothered by this as well. I am considered an impact investor, which can often seen to in be in conflict with venture and as deleterious to returns. But why? Are we to believe that asking ‘does the world need another one of these’ is a bad thing that can reduce potential profits. 

I often advise companies that if the way you make money and the way you positively impact the world are in-line, or better yet interdependent, then your triple/double-bottom line will grow together. 

These are the kinds of companies that we must seek to make the new norm. We need to stop believing that conscious companies are bad investments. And we certainly must stop being complacent with the deficiencies of tech based on historic biases.

The future is in the whitespace

In the same way that data is compiling to support that startups led by women outperform (returning 78% of every dollar vs. 31% otherwise), that diverse teams outperform (35% more likely to beat national average performance) and rising tech cities can produce higher multiples (Midwest and South yields the highest multiple in the US), so too do I believe that investing in mission-based companies can match or outperform the status quo. 

It’s time for both founders and investors to start digging deeper and acknowledge that the way capital is concentrated today is not the most efficient and a better path is emerging to follow if we wake up. Creating a better world and making a profit are possible, but it requires us to step away from the biased track record of the past.


Podcast: How to solve your startup’s Catch-22 conundrum – Startup Basics Podcast

A very common conundrum for startup founders–particularly non-technical ones–is: “How do I get investment, when investors want to see a product and traction, but I can’t build my product and get traction without money?!”

In this episode of Startup Basics we will explore three possible workarounds to help you make progress and break out of this classic Catch-22 situation.

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Why the next tech boom will be led by a different type of founder

The tech boom of the 1990s was largely driven by “business guys” with MBAs or career experience as well as entrepreneurs that crossed over to tech from unrelated industries such as real estate and consumer packaged goods. As the tech boom euphoria rose, venture capital and angel investors showered these business types with capital based on their pedigrees and beautifully-designed business proposals rather than the merit of their innovations in meeting customers’ needs.

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Can I get funding for my startup with just an idea?

It’s quite common that I meet founders that are seeking capital for their startup idea. I love talking to these founders, but I inevitably tell them the same thing: It’s exceedingly rare, these days, to raise capital for just an idea but not impossible. Moreover, there are ways that founders could finance initial product development without equity-based investment. 

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Want your startup to succeed? Know thy competition

Too often startups tell me that they have no competition. I write those startups off right away because I can guarantee that not only do they have competition, but the competition is a worthy opponent that must be taken seriously.

Rather than convincing me that your startup is special, stating that you have no competition tells me instead that you are either ill-informed, unrealistic, delusional, or too lazy to perform a thorough analysis of your competitive landscape. I’m sure the motivation is often just trying to impress the investor, but I am infinitely more impressed when a startup rattles of a dozen competitors and tells me everything there is to know about them. The startup journey is a competition, and it inspires substantial confidence when a team has thoroughly studied their adversaries.

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