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Why we can’t solve big problems

I just re-read an excellent article in Technology Review titled “Why we can’t solve big problems”, discussing why the world is not able to tackle big problems anymore like it was 50 years ago. When Kennedy announced that the US would put a man on the moon “in this decade”, NASA indeed managed to send Apollo 11 to the moon – and back. But since I was born (in 1972) nobody has been to the moon anymore. What happened?

The article discusses several reasons, one of them that VCs don’t want to take big risks anymore. To quote the article, “venture investing shifted away from funding transformational companies and toward companies that solved incremental problems or even fake problems . VC has ceased to be the funder of the future, and instead become a funder of features, widgets, irrelevances.” Computers and communication technologies advanced because they were well and properly funded. But what seemed futuristic at the time of Apollo 11 remains futuristic, in part because these technologies never received the sustained funding lavished on the electronics industries.”

My VC experience started about 8 years ago, so I am not sure how VCs did their investments before that, but I wonder if it may partly be because LPs want faster returns? There are so many funds out there that VCs may look for easy returns instead of big problems – big problems with a high risk and many years before returns could be made. Or maybe it has to do with the fact that the investments in big problems would be way too high, and it’s easier to put smaller amounts in smaller companies.

Next to that the (US) government played a big role as well. In the 1960s it was still possible to get the public behind an idea to put a man on the moon, something that would be much harder right now. People feel there are more important problems to solve. Maybe – but only in the short run. In the long run we need to solve big problems to make sure this earth will still have human inhabitants a couple of centuries from now. Maybe China will be the one that will tackle and solve the big problems humanity is facing?

Of course some funds are still working on big issues, one that immediately comes to mind is Intellectual Ventures that has among others developed relatively simple solutions for global warming that were featured in SuperFreakonomics. But generally VCs seem to be focused on apps and simple problems with quick returns.

Another exception is the Founders Fund, a VC fund set up by Silicon Valley’s Paypal mafia (the Paypal employees that got rich after Paypal went IPO). Their motto is the title of this piece “We wanted flying cars, but instead we got 140 characters”. They feel meaningful disruption is necessary, but most founders have no real intent of doing big things. But it may be a chicken or egg problem: do founders not look at the big problems because they know they won’t get funded or because they don’t want to do big things? I think the first part may be more important, because most entrepreneurs that I know want to change the world.

Sometimes disruption also happens by coincidence. Looking back at the founding of Tudou, the initial idea for that company was not to disrupt the traditional way that people consume TV and other visual media (it was actually something similar to what iTunes became for podcasts). You realize the potential of what you are doing only over time and then you start really thinking big.

When the Internet started I don’t think anybody could have imagined the impact it would have on this world. Although the article does not agree with me, I feel the Internet is at least as important as putting a man on the moon. It’s a different scientific field, but the Internet completely changed the way we communicate and how (and how fast) we get our information. The Internet may also help us to solve the big problems we are facing much more quickly.

If you’re interested in this subject you should read the full article here:

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