For example, while I share a certain sense of frustration that SV seems to spend a disproportionate amount of resources on mobifotosocialgames, smartphones and their downmarket progeny are an enormous quality-of-life improvement for broader America. There's virtually nothing a cash-poor-responsibility-rich person needs to do that having a smartphone does not make them better at.
Commute to work? Apply for benefits? Schedule appointments with doctors? Successfully keep those appointments? Keep tabs on kids while working/errands? A smart phone makes you better.
As an entrepreneur who makes stuff for people who are not the usual suspects, the challenges to doing this are numerous and largely not conducive to the VC-funded trajectory. You have to convince people to pay you money for your services, you have to be able to service those customers profitably, and the customers are disproportionately pathological. Most of the software they consume is getting written by AppAmaGooFaceSoft because they can underwrite it with their massive monopoly rents, subsidize the cost straight down to zero, and deal with the CS headaches attendant in serving poor people by sending them to a call tree / web app backended by a Markov chain backended by /dev/null.
There's also a bit of "every problem has a software solution" enthusiasm which is, well, a bit overstated. (Sometimes this isn't stated outright, but when you expect to do something meaningful on e.g. $500k in an angel round, you implicitly expect to do something meaningful 100% in software, because $500k isn't even enough to launch a single McDonalds in the real world.)
Many problems have an 80% software solution attached to a 20% "interface with the real world" mandatory bit. The marginal cost of that last bit, though, is hundreds, thousands, or tens of thousands of dollars per client served. Or it has highly non-trivial political/regulatory barriers to entry, like "Convince an incompetent, intransigent, and politically invulnerable agency to disemploy half their workforce, who are by the way mostly veterans, whose main professional competence is doing an important thing slowly, poorly, and expensively."
>'Commute to work? Apply for benefits? Schedule appointments with doctors? Successfully keep those appointments? Keep tabs on kids while working/errands? A smart phone makes you better.'
Spot on.
Years ago, I maintained a couple of desktops in a sort of 'job center' where people could submit electronic applications for various low-end, entry-level positions.
The most common issue - no email address. Second most common - has email, but has to take the bus to the library to check it.
Cheap smartphones have been a boon at that level. There's a whole segment of the population that was missing out on all the benefits of being connected until very recently.
> The most common issue - no email address. Second most common - has email, but has to take the bus to the library to check it.
Absolutely. We have come to know a couple of guys, one ex-homeless, who have real troubles here. We lent one an old iPad and that, together will free wifi in coffee shops and malls, has enabled him to talk to government agencies and job centers.
I left the United States to work abroad too soon to get into the project, but Washington DC (if you are in that area) Public Libraries had a very impressive computer literacy program where people were taught all kinds of the skills. I taught for a while.
Things like this will make a big difference. The email thing, as an IT guy full-time, blew my mimd. Many of my students were not stereotyped homeless people, but frustrated people with low incomes and dead end jobs. Some of them really lit up as you showed them how to spend all free time that could be invested in free education and researching better job opportunties. I only wish I had stayed longer volunteering there to make a real difference.
I hope other places start digital literacy courses.
> This morning, small boy had one of the last Weetabix, mashed with water, with a glass of tap water to wash it down with. ‘Where’s Mummys breakfast?’ he asks, big blue eyes and two year old concern. I tell him I’m not hungry, but the rumblings of my stomach call me a liar. But these are the things that we do.
> ...
> Then you start to take lightbulbs out. If they aren’t there, you can’t turn them on.
> ...
> Poverty is the sinking feeling when your small boy finishes his one weetabix and says ‘more mummy, bread and jam please mummy’ as you’re wondering whether to take the TV or the guitar to the pawn shop first, and how to tell him that there is no bread or jam.
Are you seriously suggesting that she's starving herself and her child deliberately in order to score some sort of political point, and if so what point would that be?
Details are slightly unclear because not everyone's employment and sexual history is on the internet for the benefit of their book reviewers, but it appears that the shiftwork required of the job made it extremely hard to find childcare, and the cost of childcare+commuting to work made working non-viable.
I've no idea where the father is, you could ask about for him? As for the "shouldn't have child" argument, you can't return children for a refund when you become unemployed nor can you ebay them to recoup your costs.
> When I returned to work after maternity leave, my relationship broke down, and I found it impossible to cover the irregular night shifts 30 miles from home with any form of childcare. Childminders just don't work all night. Her son's father did and does look after him, but at the time it was impossible to match our work shifts up with friends, family and childcare to cover my working hours. Because he works too.
I was actually surprised when I read the summary, because that would be a surprising level of poverty in the US. If anything, we are unnecessarily generous with the food stamps here. (Which I am not necessarily complaining about, just observing that they are relatively easy to get.) And lo, it turns out this was in Britain, so saying they can't afford $44 is sort of deceptive. I well believe she couldn't afford £44.
There's a certain segment in American politics who really doesn't like to talk about this, but for all the drama, the poor in America are still better off than they are in almost any other country, which, yes, includes all (AFAIK) the European countries, and while that doesn't prove anything about what we do or do not need to do in that area, it does suggest that rhetoric about poverty in the US can occasionally get overblown. (It's a political thing where, let's be honest, there's a lot of incentives to keep promising more. I started listing them all out and the list of people interested in increasing poverty payouts got too long for a parenthetical. Again, not necessarily a complaint, but let's not pretend here that these interests don't exist. If you'd like, celebrate that often comes from something so crass as base political pandering ends up benefiting so many people, instead of a narrow interest group.)
I live in the Midwest and I don't know anyone living in abject poverty, but I know a lot of struggling families (as in, friends of the family that we socialize with frequently, not just "people I've heard of"). There's plenty of them that could afford $44, if you were somehow bringing something to them that was worth it. Which is, after all, the entire point here, to bring them something that will somehow improve their lives more than the cost of buying it, not to just pointlessly drain their wallets. This may very well only work right now in the US, where, yes, even the poor and struggling can afford $44, if it's worth it somehow. And on the flip side, while it's perhaps harder than you might initially think to bring $44 of value to somebody, it is also a very feasible goal. You don't have to work out how to bring them $5000 of value. (Although if you can somehow, awesome. That said the only thing that leaps to mind where you can pay back thousands for a small investment is budgeting apps, and that space is covered. The problem there wouldn't so much be writing the app as getting people to use it.)
I cannot leave your comment unanswered, and do not think I can convince you otherwise without baring more than I probably should.
While in high school, my mother finally left my father, taking my sister and me with her. Shortly afterward, she was incapacitated by cancer. My father would not have me back.
I continued to attend high school in spite of my homelessness. I was able to get a job at a restaurant that was a little lax on following labor law, and, initially, what I ate on the job was most of my meals (it was not allowed). I closed, so had keys to the building, and would come extra early and bathe in the dish washing sinks before the prep cooks arrived, then off to school.
I could never have afforded an electronic toy, and especially not the service plan that would come with it. And, no, minors do not get public assistance, if silly enough to try they will end up in foster care which more often than not means someone who wants the child simply to receive the monthly allowance for his "care". Even homeless shelters must turn away unaccompanied minors who come to their doors.
Eventually, I attended a good public university, but it was a long road. I do not want any longer, but I went hungry plenty-- I was 6 foot tall and 130lbs with as broad a build as you are likely to find, yet a rail.
> There's a certain segment in American politics who really doesn't like to talk about this, but for all the drama, the poor in America are still better off than they are in almost any other country, which, yes, includes all (AFAIK) the European countries, and while that doesn't prove anything about what we do or do not need to do in that area, it does suggest that rhetoric about poverty in the US can occasionally get overblown.
Really? My understanding was that without state-subsidized healthcare, many don't have access to non-emergency healthcare, and so miss out on the kind of preventative measures that can do a lot for your general health. So while the American poor might be wealthier in some narrow sense than the European poor, their quality of life is worse than in nations with state healthcare.
The propaganda about the poor's lack of access to health care is also overstated for various political reasons.
Note the difference between "overstated" and "false", and I'll even more explicitly say that that isn't proof that everything's hunky dory and nothing needs to be changed. But it's hardly like it's paradise for the poor in Europe and in the US you're just left out on your own... it's way more nuanced than that. (Everybody's books have to balance.)
> The propaganda about the poor's lack of access to health care is also overstated for various political reasons.
Brit here. Enlighten me as to how not being able to afford to visit a GP is 'overstated'.
As I understand it, if you are poor in the USA, there's a real chance you won't be able to pay for the pills you need, or for mental health treatment, etc. That simply doesn't happen here in the UK.
> Everybody's books have to balance.
But that doesn't mean anything. Different countries invest different amounts in welfare.
The trouble comes when you are just over the threshold, but still can't afford health insurance, or just didn't bother to sign up. Or have insurance, but the part it didn't cover bankrupts you anyway.
So if we exclude those people from the "poor" category, perhaps "the poor's lack of access to health care is also overstated" makes a little more sense.
Certain US states (the largest ones being Florida and Texas), never underwent this thing called "Medicaid expansion", as a kind of political protest against "Obamacare", and so if you're lucky enough to live in one of these states (very populated states too like Florida and Texas), you're not eligible for Medicaid for merely being in abject poverty. You don't even qualify for healthcare subsidies since the cutoff for those is perversely 133% of the poverty line, or something like that.
SNAP policies (supplemental nutrition assistance ie. food stamps) can vary greatly from state to state too. I've lived in states that provide unconditional benefits to anyone below a certain income level, but my current state (Florida), only provides a few months of benefits at a time, and then after that you have to continually re-qualify, providing proof that you're still looking for work if you're unemployed, things like that. It's incredibly easy to fall through the cracks with these proof requirements though.
Being poor certain places in the US is misery. People do go hungry plenty, and adults and especially children often suffer severe lasting health problems from malnutrition here.
I live in the Midwest and I don't know anyone living in abject poverty But if you looked, I am sure you would see it. The organization http://www.embarcchicago.org/ works with kids who live a couple of miles from Lake Michigan, but have never seen it, nor have they seen a supermarket.
> I live in the Midwest and I don't know anyone living in ajbect poverty
Go to a city. Any notable city. Detroit, Flint, Chicago, Milwaukee, Indianapolis, Columbus. You'll see plenty of poverty, if you spend just five minutes to look for it.
http://www.nytimes.com/newsgraphics/2014/01/05/poverty-map/ click "Number Living in Poverty" and then look at the midwest. It's everywhere. Every major city, and a number of rural areas (Tippecanoe County, Isabella County, Allen County, etc)
There's poverty all over the Midwest. If you don't see it, you aren't looking very closely.
I take it you've never been on the breadline then? There have been times in my life when £5 has been a lot of money, when taking a 2hr walk (each way) to work for the first week, was the only option. It might not seem much, but then if they do buy it, what next? There is no starbucks in their neighbourhood, the library is two buses away, and none of your neighbours have wifi, or are happy to share it with you.
Plus if you are living a chaotic life, keeping hold of something like this, keeping it secure, dry and charged can be a mission in itself. And when times are hard what is going to be the easiest way to get some money (for bus fare to that job)...
So yes, if you are in the right location, with the time and means to get to an open wifi connection, and have the spare money to buy a tool like this, then awesome. But a lot of people aren't.
When you're functionally illiterate and have spent a few years living on the streets, are not good with money, and have a generally chaotic lifestyle, then you may well not think about going to your local supermarket to buy a cheap tablet (even if you know what a tablet is)
For some folks, their lack of ability to cope with (and fit into) modern life is truly incapacitating.
I take it you've never been actually poor? $44 can be a hell of a lot to invest in technology when you don't have enough money to cover the bills every month.
Here's a seemingly rare example of something that has unambiguously and significantly improved the lives of millions of poor people across the world. What lessons can we learn to try to repeat that success?
Agreed. VC's fund companies that target markets that can be served by VC-fundable companies. And most young entrepreneurs from top schools hear that it's easiest to Get Rich Quick by founding a VC-funded company.
But those aren't the only kinds of companies worth building, and "young entrepreneurs from top schools" aren't the only people who can build good companies. We shouldn't look to them (err, ourselves) as "humanity's only saviors". Which I think this article makes the mistake of doing.
A similar problem that I have with this piece is an over-reliance on entrepreneurs - that is, the free market - to solve the problems of "the unexotic underclass". The free market will solve the problems of people (and businesses) who have discretionary income. That's how capitalism works. Capitalism also has a lot of inequality baked-in. He shouldn't be surprised that difficult-to-serve, low-income individuals are failed in America.
Keep in mind, too, that the other part of "discretionary income" is "discretionary". Schools, Hospitals, Government Agencies like the VA? They typically have terrible purchase processes (and generally poor management) that make it almost impossible for entrepreneurs to sell to them. I recently folded an Education Technology company because schools are so difficult to sell to and have so little money. Don't blame the entrepreneurs here; blame a government which over-regulates and under-funds schools, the VA, and other services. (And then vote to make a better one!!)
All that being said, I do agree that there are opportunities for entrepreneurs in these markets. They may be hard to find, but we're not going to do it by holing up in Tech/Wealth bubbles like SF and NYC. Spending some time in the heartland may be a great way to find those rare business models that could profitably serve the underserved.
Agree with the "young entrepreneurs from top schools" bit. Going to a top school doesn't correlate with being a good entrepreneur. It maybe correlates with intelligence and drive, but more closely correlates with privilege and connection.
There's an interesting correlation between immigrants and entrepreneurship (old-school building a profitable business entrepreneurship, not SV-type scaling an unprofitable business entrepreneurship). My take on this (utterly my own opinion) is that immigrants are less likely to get jobs, so more likely to start their own businesses.
So the people who are going to solve these problems are probably not going to be VC's, Ivy leaguers, incubators, or in Silicon Valley. They're probably going to be bootstrapping (nice bonus: if you're used to living on a very low income then bootstrapping is a lot easier). Maybe the problem here then is not the entrepreneurs, but the media and reporting. We only hear about young entrepreneurs building something awesome with technology. Maybe there's an interesting story about poor, underprivileged people dragging themselves out of poverty with technology?
>>There's an interesting correlation between immigrants and entrepreneurship (old-school building a profitable business entrepreneurship, not SV-type scaling an unprofitable business entrepreneurship). My take on this (utterly my own opinion) is that immigrants are less likely to get jobs, so more likely to start their own businesses.
As an immigrant, I think it's more that we're more comfortable with taking risks (leaving one's home country and emigrating anywhere is a huge risk, after all), so we don't have a big problem with abandoning steady paychecks and diving (back) into a sea of uncertainty.
These are some interesting insights, but I wonder: can "bootstrapped" businesses really tackle big problems? Part of the frustration with SV isn't just the kinds of "problems" they're "solving," but also that they're taking up all the oxygen (read: funding capital) that, if applied differently, could fix more meaningful problems.
>can "bootstrapped" businesses really tackle big problems?
Eh, most of your "funded" cash is spent on labor. What does someone working for a funded startup cost? $200K/yr if you skimp on office space?
Figure that as a bootstrapped company, you spend 1/3rd of your time earning money to feed yourself (Without dependents, you can live pretty okay off of 1/3rd of a competent coder's salary, even in SV.) Note, it may be easier, say, if there are three of you to rent out one of you as a contractor full-time and use that money to pay everyone else, rather than all of you working for other people 1/3rd of the time. Getting part-time work that pays good is a significant marketing effort, while $90/hr corp to corp full-time work is easily obtainable through the body shops.
So to compete with a company funded with a half-million bucks, you and your partners need to be willing to put in almost four years of your time.
this is not unreasonable. I've done rather more than that. and there are many advantages; getting contracting work, in my experience, requires a hell of a lot less marketing effort than getting VC money.
Of course, the difficulty increases as your funded competitor gets more funding; if, say, your competition has tens of millions in funding, say, rather than just half a million? yeah, that's going to be rather more difficult.
I'm curious why funding is needed to tackle big problems? Or indeed any problems? What part of the solution does the funding provide?
Funding makes it easier to pay your bills while you work on a problem, but can also remove a lot of the urgency about finding a solution that customers will love. If you depend on customers to pay your bills, however...
This isn't a slight on you(r post) but I just wanted to point out that nobody (at least nobody outside of the startup/tech world) believes that SV is a savior of humanity, much less the only savior.
The article resonated with me when it mentioned "(or, because they suspect no one will invest in what they really want to do)."
>Many problems have an 80% software solution attached to a 20% "interface with the real world" mandatory bit.
My "Big Problem" is Education. I'd almost flip those numbers -- 20% software, 80% "interface with the real world." Throw in non-trivial entrenched interests including existing teachers who think they know the best way to teach, and a significant fraction of people in this country who went through a public school education and who might be prone to object to teaching kids in a new and different way.
But I still want to try. I think that it's a problem that will actually address many of the "unexotic big problems" plaguing the world today.
The big fix is for the poor. Get education right and you can make strides against poverty from multiple directions. The educated adults you produce will be more able to be employed, or to create employment opportunities (depending on temperament and opportunity). That would help single mothers and the rest -- eventually.
I run an education startup and respectfully disagree -- parent poster is correct that the industry is really not welcoming for entrepreneurs, at least for people who have ambitions for things like home ownership or healthcare or relationships.
The major problem is that people who need to learn something are by definition the least able to evaluate what they need. So the dominant incentive is for companies to produce crap and then market the hell out of it, or develop connections and feed off public credit ("you may qualify for state assistance!")... almost anything except for producing stuff people actually need and trying to sell it on its virtues. And then there is the lack of money, because student budgets are often directed elsewhere, such as to their expensive but ineffective accreditation programs and university classes.
This transforms meaningful work in the education space into an uphill struggle against funded businesses with predatory business practices, and while word-of-mouth can benefit you over them in the long-run, the viral loop goes slower in education than in other areas and it is very, very difficult to build effective placement in commercial sales channels like search engines.
More direct connections between education and employment would help, but the connection is often weaker than one would think from the political rhetoric thrown around, especially considering that education is often a proxy term for "credentials" or "signaling" in public rather than knowledge.
>The major problem is that people who need to learn something are by definition the least able to evaluate what they need.
I have to respectfully but firmly disagree with this assertion.
Kids are born to learn. They seek out experiences that involve learning, and they lap it up voluntarily when given the chance.
School, as it's currently designed, does its best to remove all of the natural fun from learning.
Read about Sudbury Schools if you don't believe this can work. [1] They have no curriculum or standardized testing, and yet 85% of the kids who graduate go on to get higher degrees.
>More direct connections between education and employment would help, but the connection is often weaker than one would think from the political rhetoric thrown around, especially considering that education is often a proxy term for "credentials" or "signaling" in public rather than knowledge.
You're referring to the current (i.e., completely profoundly broken) educational system. The current system was designed for the industrial age to create interchangeable cogs in the manufacturing machine. It actively suppresses creativity and individuality. It requires all the various kids to learn in lock-step, which in reality they never do.
So of course what currently passes for "education" is poorly correlated with employment results. But what I want to do is fix education so that it does a good job, not optimize the current IMO broken system.
I was thinking more of adult education, the same principle applies to children. Socrates had the example that if schoolboys could choose their teachers, they would elect the pastry chef.
Just focusing on the adult education market, it is extremely clear that the most well-known educational products are those associated with non-educational marketing factors: institutional prestige (MOOCs), television advertising (Rosetta Stone), famous people (Bill Gates & Khan Academy).
You rarely, rarely, rarely hear about educational startups that are excellent, financially independent and successful. It CAN happen, but if you are planning to build a startup with that in mind, you will have a much harder time than if you raise cash and put education behind marketing, marketing, marketing....
It sounds like you actually largely agree with SomeCallMeTim. His point above is that solving Education is a Big Problem that has many non-trivial issues involved (entrenched interests, low budgets, slow purchase cycles, etc.), yet he "still wants to try." You make the point that the "industry is not welcoming for entrepreneurs", but at the same time, you are running an education start-up, which suggests to me that you believe it is possible to make a dent in the problems plaguing education.
My Big Problem to solve is education as well, and currently, I'm still trying to figure out the best way to tackle the root cause. I feel we are all inclined to use technology as the path to success, but perhaps more fundamental issues need to be dealt with first. If this is the case, then which issue do we initially target -fighting predatory business practices, creating a culture that values education, establishing employment credibility for non-traditional education, something else?
As I just mentioned in another response, you should look at Sudbury Schools [1] for inspiration on how education should work.
The entire current educational system is based on creating interchangeable docile workers for manufacturing jobs.
What we need moving forward are creative, intelligent, and self-motivated individuals who will create value in a service/information economy.
I just listened to a story on public radio that talked about business-without-employees, and referred to the new "Participation Age" as the future. It's worth a listen. [2] He also brings up Sudbury Schools as an example of this philosophy as it applies to education.
Yes, I agree with both of you about the desired direction of change. Where I disagreed was with the assertion that the problem with edutech companies is one of putting technology ahead of "interface". I also hope that innovative school structures help solve some of these problems.
I can sum this up so very simply. The way to make the most money is to get as close to money as possible. Hence why finance is such a lucrative career. We are seeing the obvious flaws of capitalism now that capital is no longer tied to low skill labor for manufacturing.
Want to make a ton of money 1 year from today and have good credit? Spend your days with an MLS subscription finding under-priced homes to flip in a couple weeks. You'll be a millionaire in a year I guarantee it.
Want to help single mothers for the rest of you life? You'll barely get by, I guarantee it.
Why? Because its further from a transaction. Nothing more, nothing less.
EDIT: I'd love it if the person who down voted me would explain why so much money is flowing into blockchains. You don't think that has anything to do with how close it is to the transaction?
Are you a millionaire real estate speculator? Knowing something about it, your scenario strikes me as neither low-risk nor guaranteed. If it were low-risk and guaranteed, it would be profitably scaled -- capital is available in abundance.
why so much money is flowing into blockchains
It's an asset bubble backed by an extraordinarily sophisticated emergent P2P Internet marketing operation which is a quantum leap improvement over a boiler room. Like many asset bubbles, it is snaring both the rich/savvy and the non-wealthy/non-savvy.
My parents eventually made "millionaire" status on real estate investments.
And you're 100% right.
The reason my parents did well is that:
a) Few people (at the time) knew about tax and bank auctions
b) At the time both kinds of auctions required that you show up and pay in cash equivalent. They had a worker's comp settlement that allowed them to invest in properties where others didn't have the cash. Now banks tend to let you finance REO properties.
c) My dad was a competent home inspector/contractor who could tell (within reasonable margin of error) if a house was a good deal, and could do the work himself to fix it up
d) It was the Right Time to be investing in their geographical area
So yes, it's possible to do something like this, but for the most part you need to have access to a source of properties that is not already being shopped by a ton of competitors, have access to a building inspection skillset (or pay $400+ per property you inspect), have access to inexpensive contractors (or they'll eat up your profit), and to a certain extent, you need to be lucky and invest in the right market at the right time.
Though I have to say that I'm now investing in real estate, based on my own observations of the area I live now, but I'm not taking a buy-and-flip approach. Instead I'm trying buy-and-make-12%-ROI-on-rent. The rental market is extremely tight here. But it's not going to make me a millionaire in a year.
Where I live, many landlords prefer tenants who are on welfare. The state pays their rent, so it's practically guaranteed.
So I think single mothers might be a lucrative market. Especially if you can get the foot into the door for some government contract.
Another data point: I think Warren Buffet got rich with Coca Cola and chocolate bars? That's basically selling crap to the poor.
The government being a lucrative market isn't the same as single mothers being a lucrative market.
And yes, you can make money from an underclass by exploiting people's weaknesses for sugar, fast food, gambling, alcohol, drugs etc. But then you're not solving their problems, you're adding to them.
Sure, I wouldn't want that. But it shows you can sell stuff to the poor and make a profit. If you can sell them crap, it seems likely you could also sell them useful things.
The mothers: where I live the single moms are often on welfare (at least the media says so), that's why I thought of the government. Because the government feeds them directly. So if you could convince the government that every mother needs X (I don't know, free baby bottles because research has shown kids teeth deteriorate because poor moms don't buy bottles often enough bla bla bla), you would be on your way to a government contract of sorts.
The point is that if they are a big enough group, and you provide something they need, you can make money (I suppose).
You are still selling things to the government in your example.
The final recipient of the product may be the mother, but your pitch is to the government.
Coca-cola is where he parks excess cash. He got the cash using insurance cash-flows (get cash now, pay out later) to fund utility building (needs cash up-front, pays out cash reliably for a long time)
> Where I live, many landlords prefer tenants who are on welfare. The state pays their rent, so it's practically guaranteed. So I think single mothers might be a lucrative market.
Doesn't this have a side effect of locking those single mothers into poverty? A place to stay offers stabilization, but that alone doesn't help if trying to find a job means losing benefits and not being able to afford a cheap flat, because suddenly landlords don't like you anymore.
Not just single mothers, everybody who is on welfare. I suppose it is always tricky to set up such a system with minimal side effects. I'm not saying the system is good, but it exists.
There were cases here (Germany) where people had to leave their flat for one with higher rent, because the old flat was too big (welfare recipients being entitled only to so much space). But that was the government forcing them to move, not the landlords.
Not sure if the other thing would happen, landlords throwing out tenants when they don't receive welfare anymore. There are laws to protect tenants once they are in the house, too.
> There were cases here (Germany) where people had to leave their flat for one with higher rent, because the old flat was too big (welfare recipients being entitled only to so much space). But that was the government forcing them to move, not the landlords.
I know personally of a family in a similar situation in Poland. A single mother living with with three children; the moment the eldest will leave house to live on his own, the family will have to sell the flat and move to a smaller one, because with one less person living there, the flat will be considered a little too big and suddenly, all benefits related to it will evaporate.
> Not sure if the other thing would happen, landlords throwing out tenants when they don't receive welfare anymore. There are laws to protect tenants once they are in the house, too.
It doesn't necessarily have to be throwing out, it might just be "renegotiating the contract". Also the person who just switched from welfare to a job might not have a very stable income at the beginning. Unfortunately, welfare trap is a real thing.
Hmmm- there is perhaps some merit to your theory but I doubt its as easy buying an MLS subscription and flipping homes.
Some of what you are saying is applicable to Advertising as well. See Chris Dixon's posts on why Google is so profitable because its closest to the transaction.
For example, an average camera buyer takes 30 days and clicks on approximately 3 sponsored links from the beginning of researching cameras to actually purchasing one. Yet in most cases only the last click gets credit, by which I mean: 1) if it’s an affiliate (CPA) deal, it is literally usually the case that only the last affiliate (the site that drops the last cookie) gets paid, 2) if it’s a CPC or CPM deal, most advertisers don’t properly track the users across multiple site visits so simply attribute conversion to the most recent click, causing them to over-allocate to end-of-funnel links 3) if it’s a non-sponsored link (like Google natural search links) the advertiser might over-credit SEO when in fact the natural search click was just the final navigational step in a long process that involved sponsored links along the way.
What this means is there are two huge misallocations of advertising dollars online: the first from intent generators to intent harvesters; the second from intent harvesters that are at the beginning or middle of the purchasing process to those at the end of the purchasing process. This is not just a problem for internet advertisers and businesses – it affects all internet users. Where advertising dollars flow, money gets invested. It is well known that content sites are suffering, many are even on their way to dying. Additionally, product/service sites that started off focusing on research are forced to move more and more toward end-of-funnel activities.
I used to be a real estate agent. As I recall, pretty much every home shopper was looking for something underpriced. You'll face a lot of competition on that route.
>Want to make a ton of money 1 year from today and have good credit? Spend your days with an MLS subscription finding under-priced homes to flip in a couple weeks. You'll be a millionaire in a year I guarantee it.
Considering only 3% of Americans are millionaires, and assuming >3% of Americans would like to be millionaires, in order for your statement to be valid is if whatever you wrote was some sort of never before thought of revelation.
The problem is capital. It takes a lot of capital to flip homes. Most of the people I know are in a pretty good spot financially, but almost none of them could afford to flip homes unless they got a really good deal on a teardown and they did all the renovation manually (and you're certainly not going to become a millionaire in one year at that pace).
How about the skill and risk involved in being able to determine what is "under-priced"? The way I'm reading these posts, it seems as if all it takes to make money is money (at least in flipping homes).
Perhaps I'm thinking of a different notion of flipping homes. I might be the one confused here.
I was thinking of buying old homes, possibly teardowns, in a rapidly up-and-coming area, renovating them, and then reselling them at a much higher price. I feel like there's less risk involved here as long as you have strong data showing the area is becoming popular and you can act quickly (i.e., before the boom ends).
If you want to simply isolate an underpriced house, buy it, sit on it doing nothing, and then sell it a few months later for twice what you paid, then I agree -- a considerable amount of skill would be needed.
Absolutely right. Find opportunities to either facilitate for pay or to tax transactions between other actors. Try to convert facilitation situations in which you have to be the lowest bidder into taxing situations where you only accept the highest bidders.
The only way to come across these opportunities is to socialize with the wealthy.
I would really love to cater to the unexotic underclass, but how? I mean he goes on and on about how much opportunity there is, but I don't see it.
I know how to get 500 white liberal suburbanite young males to pay me $10 per month. They have the money and they love to spend it on tech and gadgetry that makes their lives even more comfortable. But single house mothers? Poor Romanians? How would I even get them to pay me half a cent.
In my mind, all these people really want and need is money, they are a receivers market, not a spenders market. I imagine them needing to spend money on food, education, housing and entertainment. All incredibly tough nuts to crack. If you even succeed at coming up with something those people want to spend money on, you're directly competing with the poor people dominators like Coca Cola.
The IT startup scene we're in is just a kids playground, do we really believe someone like Mark Zuckerberg could survive in the business of making money off poor people (directly)?
Fair point. Maybe the answer is, instead of trying to sell something to the poor, look for a way to enable the poor to sell a service to the rich?
I mean, two of the biggest success stories in the recent startup scene are Airbnb and Uber. What do they do? Provide a way for people who don't have much money but do have a useful asset (a spare room, a car, respectively) to make a bit of extra cash selling a service to those with disposable income.
What other opportunities along those lines are still open?
Unfortunately, this is the future. I say unfortunately, because I think if we could see the final version, we'd recoil.
The sharing economy, at heart, is about the monetization of spare capacity. So far it's mostly been physical assets, but spare time is next. Anywhere you find a poor person watching TV (or, god forbid, reading a book) there's spare capacity ready to be monetized. And, why are they sleeping so much? They could be working.
The sharing economy is also about getting around transaction costs. Ideas like "minimum wage" and "minimum shift length" can be viewed as transaction costs that services can route around.
A marginal hour's unskilled labour isn't worth very much. There's always been exploitation of this fact, but web services have the potential to scale it up.
I agree that a future where millions live in poverty, working insane hours for minimal wages is repulsive and definitely the sort of thing that the next generation of web services might bring closer.
But this future is going to come anyway, in the near future automation and centralization of production are only going to increase, leading to much increased joblessness.
The only way we can combat that is if more wealth leaks down from the top, be it through labor services or social government.
Future? Everything I've heard about society and the economy in the US says it's the present, without Web services coming into the picture. Web services don't make that aspect of things either better or worse, but what they do have the potential to do is make it so you don't have to endure a grinding commute and abuse by a sociopathic boss as well as the poverty and excessive hours
I ask this because I have never seen a decent answer to this question: how does that make the poor people worse of? I mean I can sorta see it with the spare room (rent goes up because your neighbor has a little extra cash, now you _have_ to rent your room out too) but your car? Swinging by with my groceries on your way home from work? Swing by with some ready-to-freeze homecooked dinner for me[1]?
[1]: Yes that is illegal, but I would _love_ for it not to be. Cooking for one is a waste of time.
Your question makes sense. It is more work for people who desperately need work.
The problem is that dollars have marginal utility. The first $X you make per month is your housing and your food. People who are not getting that livable minimum are at a huge disadvantage in negotiations. They will do almost anything to get that $X. This means they will accept low pay, poor conditions, awful hours - anything you can think of - to make it. This also represents a massive subsidy to businesses that have good economies of scale.
This kind of brinkmanship with total collapse has very personal consequences. If a parent can't do it for more than one or two days a year (if that), their kid(s) may become homeless or stuck in the foster system. You should care about that because society bears a large portion of the costs (the costs are high). That level of stress causes people to make mistakes, sometimes about things you care about.
The goal of labor protections is to ensure some minimum level of human decency and allow people time to improve their lot. Aside from the risks to us outlined above, the risk of a population that is too beset with surviving to pay attention or vote should be pretty obvious.
I'm not aware of much like this besides mechanical turk. In any case, no one is forcing people to work, it's just an option they otherwise wouldn't have. You can argue their lives won't be any better with it, but I can't see how they would be worse. You make it sound like they are going to be rounded up by slave drivers, and otherwise would be pretty well off.
The worst case would be existing industries that are currently bound by minimum wage and working laws, that then find ways around the regulations. But new industries that didn't exist before mostly add new jobs, not replace existing ones with worse ones.
> Rich American buys a kidney from a poor African, feeding his family for a decade in the process. Nobody dies.
Until the poor African's one remaining kidney goes bad, he can't get a transplant (nor the lifetime of expensive drugs to retain one), and his family starves for lack of a breadwinner.
I think that organ sales are substantially more complicated than this conversation is making it, but your point here could not possibly make less sense. It should be obvious with a moment's thought that "My family and I will starve right now" is way worse than "there's a small chance my second kidney will fail and then my family will starve" (and that's without considering the effect on the person who got a transplant).
Thanks for sharing this blog. It really jived with me how we could be in a dystopia no single person is responsible for creating, but which inertia keeps bringing forth untold misery.
It's a false premise - the "Rich American" has a duty to help those who are less fortunate (poor Africans), and that duty extends further than just quid pro quo transactions.
We don't know that. In any case, the example is too simplistic anytime there is a lucrative market in organs, there will be middlemen who coerce victims into donating. That will / does kill people, no doubt.
Whenever you're thinking about human systems, you need to think about how humans will game the system. Essentially, you're not facing a static adversary, but an adaptive, motivated one.
In my opinion, all they really want and need is _land_.
The real people squeezing everyone else are the landowners, and the landlords. With enough land, anyone can support themselves: chickens, vegetables, hunting and fishing, etc.
Mortgages in exchange for housing ("death pledges") exploit the poor, indenturing them to overemployment at insufficient wages. The novelty and promise of technology are part of the system that works like a carrot on a string enticing us toward so-called "higher standards," which we only think we need. The rest of the system is security/fear. These are the forces governments and corporations use to keep themselves secure. Anything we're going to do to escape it will be much more like what Jesus of Nazareth, Gandhi, Martin Luther Kind or Malcolm X did than what Paul Graham or Scott Adams did.
Technology and SV makes an easy whipping boy because they're in the crosshairs of the media (all the "billion dollar" buyouts), but we're just another pawn in the game the powerful landowners, governments and corporations are playing. In fact, we're playing along to their rules.
We are talking about the problems of modern America, not feudal Europe. Land is not particularly scarce, and the poor don't really want to become subsistence farmers or even regular farmers. Just owning a plot of land is not enough to support a middle class family, if it ever was. There are also significant political issues like property taxes, estate taxes, etc, that make owning land more complicated and expensive.
Capital in general is what you mean I think. But even then interest rates are not particularly high, and if you give people money/capital, most people will not invest it to live off the interest.
Our entire society is now based upon the idea that you need to find an employer to pay you to do something. If no one wants/needs to pay you to do things, you are screwed.
Well are you going to sell your land at a price poor people can afford or only the wealthy? You're going to sell it for the "best" (measured by maximizing dollar amount) price you can.
So, read my comment carefully, you're not ruling by security/fear, you're squeezing the poor by playing along with market rules, you big squeezing squeezer.
If you give someone land below market value, they will probably just sell it and pocket the difference. It's functionally equivalent to just giving them cash. If they want land they can go buy it.
If you sell land below market value to someone who already has a place to live they will probably just sell it and pocket the difference.
If you sell land below market value to someone who has no other place to live, they will live on it and use the money to buy books, healthcare, tools, nutritious food and cooking utensils.
Thus stands my statement that landowners squeeze the poor.
Anybody with money 'squeezes the poor' by not giving it to them. Land is no different. You don't have to 'live on land' - most people don't.
So if by 'land' we mean 'any place to live' then why not make that a civil right, instead of putting the burden on landowners? E.g. people need tools, books, education too and the folks that 'own' those aren't being criticized as squeezers.
If you sell land below market value to someone who has no other place to live, they will live there only so long as it will take to arrange to move somewhere cheaper when they sell their land for market value and pocket the difference. They will then have money left over to spend on healthcare, tools, etc.
I'm not sure I agree with your statement that landowners squeeze the poor more than anyone else does.
If all you need is _land_, there is plenty of cheap land in the US. But you just have to live away from the big population centers. But then if you are going to be self sustaining, you don't need to near a big population center.
Agreed. The core thing that any business has to do is make a product that people will pay for at a price that at least breaks even. You can't sell salvation to a person that doesn't have any spare cash.
This sort of thing is the role of governments, not businesses. The core problem you have in the US is that your government is one of those incumbent inefficient dinosaurs that doesn't really do much of anything useful any more but is so big that it's hard to topple.
Any solutions to the problems discussed in this article is inevitably going to look like politics, not business. This is a problem because in the US, it's "cool" to say "pfft, politics, it's awful why bother?" which means that competent people are driven into business instead.
Why does the US government insist on being an "inefficient dinosaur"? Stacks of paper forms processed by hand? It seems as though the process is designed to be as inefficient as is possible. Perhaps the US government delays paying the war veterans on purpose because it saves money. 9 months of being unemployed and disabled with possible mental trauma from war:
>In the past 5 years, the number of vets who’ve died before their claim has even been processed has tripled.
...can be restated:
>In the past 5 years, the number of vets to whom the US government has avoided paying disability (due to their death) has tripled.
absolutely true. For the poor and the elderly, the money comes from the government (as you noted). Tapping into that should be straightforward, but it must be incredibly difficult. Otherwise, it seems that VC's would have invested heavily into tapping that. I suspect that the last thing the government wants is (more) scrutiny about its business practices from the private sector.
It's a comprehensive course on putting your finances in order. $100 per person or family taking the course. Scholarships often offered to callers to his show and others who demonstrate motivation but lack of means to pay.
Many Americans are poor not due to having no income, but getting themselves into too much debt through scams like credit cards and student loans.
Of course this is also useful to people with decent incomes, which means the business is not exclusively reliant on the low income market.
Maybe that's one trick for serving the "unexotic underclass", a problem experienced by enough non-poor people to pay the bills, but also offered to poor people at a lower price or free.
Maybe there are some high income single mothers to subsidize a business solving a problem experienced by all single mothers? Etc.
"Many Americans are poor not due to having no income, but getting themselves into too much debt through scams like credit cards and student loans."
See, the poor are already well-served by entrepreneurs! ;) Would make for a tough fight against that given that everyone wants to live ahead of themselves, have the latest things, impress their friends, eat more, take it easier, etc.
You don't get the money from them, that's the point. You build a system that helps them,and then sell it to the government or any organisation which has the money to pay for it. You get your money, and they get the help they need.
Let's say you create an application which allows unemployed find jobs easier - you go to your local council, say that by deploying this app in all local job centres they can reduce unemployment by 50%. By doing so, they increase their own popularity with people, and every politician likes that.
Obviously this is just a made up example, but I am saying that there is money to be made on helping poor people,it's just not their money, because they don't have any :P
(Dis)claimer: I do real-world, boots-on-the-ground, ministers-in-government politics.
If solving poverty and unemployment was really popular, we'd have done it already. It's not, in the population. It is popular with a vocal minority of wealthy middle-class people who occasionally vote.
If you go to voters with a plan for this stuff and start knocking on random doors, I can tell you what you'll find because we find it all the time: "Where are they going to live? Not near me I hope."
I wish I could fix this, but we have to run the campaigns that people will vote for. That's democracy, and in our democracy, people are far more interested in voting against things they don't like than in voting for ideas to make society better.
I suspect the key to making money off the poor is buying from them low, rather than selling to them high. In other words...sweatshops. Pimps. Mechanical Turk.
These are all distasteful, but what makes them unsuitable for the task of Helping Humanity is that these transactions are really bad transactions to be making, for reasons the financials don't show. A 3rd-year developer is worth more than a 1st-year developer---is a 3rd-year sweatshop laborer worth meaningfully more than a 1st-year sweatshop laborer?
There is so much educational stuff available on the internet and public libraries that I can't see a reason why there is a lot money to spend on.
> housing
Accepted
> and entertainment.
May I tell you something: As a graduate student I have so much work to do that I hardly have any time for entertainment. Thus rather little money is spent on it. Could this be a hint for curbing the expenses for this kind of people?
> May I tell you something: As a graduate student I have so much work to do that I hardly have any time for entertainment. Thus rather little money is spent on it. Could this be a hint for curbing the expenses for this kind of people?
No, it is a hint that you are making the wrong choices in life.
Entertainment in the form of television is cheap and widely available. Somehow people still like to argue that the poor should sell their televisions and stare at the wall.
Children also have a pretty constant demand for entertainment.
Entertainment is a necessity. It has always been this way. From the Colosseum of Rome to Shakespearean theatres to television.
People need it to relieve stress.
> You've presumably spent money on college, textbooks, etc.
First: You have to distinguish between learning stuff (which can be done mostly freely or at least in a rather cheap way) and getting social recognition for it (the latter is why you go to college and pay masses of money for tuition).
Thus: You don't have to pay a lot for education but for getting social recognition for it.
Otherwise: I admit that in Germany, university is nearly tuition-free. I only bought few textbooks, since many of them were either available in the library or the lecture notes were pretty good. If no "official" lecture notes were available, students often agreed that everybody TeXes notes for one week to make an unofficial student-made lecture notes.
Thus: Yes, some money was spent, but there are options to keep the spending down.
Here is the basic problem. When you build a product for savvy people, your interests are aligned. Savvy people will only pay you money when you build a good product. Thus, the only way you can make money is by actually doing good, by creating a product useful to other people. This is the happy coincidence that draws so many to entrepreneurship - we get to build things, create value, and get paid $$$.
When you build a product for less than savvy people, the easiest way to make money is by tricking them. Even if if you do not want to play dirty, you will be driven out of the market by people who do. You will be competing against people who make something look like a great deal (no down payment, zero percent APR!) but where it turns out the customer is getting screwed in the long term. You might want to sell a fair product, but since you are selling to less than savvy people, they ignore your product and buy the product that is tricking them, that looks like a better deal than it is. When less savvy people buy good products, it's usually products that are being passed on via reputation by the more savvy set. Thus if you want to build good products for the underclass, build it first for savvy upper-middle class people, and if it is good, it will eventually filter down, like email, smart phones, and a hundred other technologies have.
That's blatantly untrue. People care. Ask yourself; how many of your friends "don't give fuck all about the poor"? I find it hard to believe that a majority of people would not wish a better life on poor people.
But solving their problems is intimidating, difficult, and probably unprofitable. If the true problem is that poor people are poor because they don't have any money, the obvious solution is to give them money (eg; EITC, UBI, free healthcare, free education etc). If all people have money -- and if you're correct that savviness doesn't really play into it -- all people will have companies trying to solve their problems.
I think Silicon Valley needs to wake up to the fact that some problems aren't best solved through technology, or through "people caring", but simply through better governance.
> some problems aren't best solved through technology, or through "people caring", but simply through better governance.
And here you run up against a religious belief named "The Government Is The Problem", which is utterly intractable and ineradicable in someone with an advanced case, and will never die off because it's founded on either blatant self-interest (A regulatory body is harming my profits!) or soured optimism (I thought everything was perfect until the scales fell from my eyes! Now I think everything is perfectly horrible!).
It's related to cynicism, which has posed as maturity for so long some people honestly cannot tell the difference.
I can't tell if you're accusing me of this religious belief or not, since I framed this as "the government is (could be) the solution" - a rather opposite attitude to the one you described.
There are many sorts of cynical, overly sour people. The kind you describe is certainly one of them. But I don't see the relevance of their existence?
I'm a "believer" in TGITP as you say it.
It is not based on "blatant self-interest" but on moral principles (don't harm people, don't take their stuff, etc).
Keep in mind what you're doing with that message is trying to discredit a whole school of thought by throwing ad hominem arguments. You are saying those like me have an advanced case of a cultish disease, and that we are selfish and cynical. You're entitled to those opinions, but this strategy of trying to taint a philosophy by attacking its messengers does not work on free thinkers like me that actually try to focus on arguments.
You're distracting and not helping the discussion. This is still an open discussion in philosophy and you're welcome to participate if you can argue with civility.
> I'm a "believer" in TGITP as you say it. It is not based on "blatant self-interest" but on moral principles (don't harm people, don't take their stuff, etc).
So how does that work when the government is the one preventing people from hurting people and taking their stuff?
How does that square with the fact you can hurt people and deprive them of things without doing the kind of stuff NAP fundamentalists rail against, if you've rigged the game in your favor? If I own the only employer in town, and I don't like your face, you're going to be pretty damned deprived unless you magically work up the wherewithal to move.
> You're distracting and not helping the discussion.
There is no discussion with the people I'm describing. They're utterly dogmatic and will ignore or twist anything you tell them so their worldview isn't challenged.
"The government is preventing people from hurting people" is not a binary assertion, but a spectrum. An agency can have a success rate of 20% at preventing violence (in which case they are lousy at it) or they can have a 70% or 80% rate or higher and so on. So sure, the government is preventing people from hurting people at some particular rate. Your question is, how can we make sure people don't hurt other people if there's no government. Well, let's say we all live in this city. Do we want a police force? If we do, we can fund one and have it. Then it will protect us. Same as current taxes for police forces, only at local level. It's no different than having tinier countries. Switzerland is tiny and peaceful and they have a police force but they also have everyone armed and so everyone can help protect others that may be being harmed. And in general you will see less people being harmed if everyone is able to help.
Now on to your example. You're the only employer in town. Maybe you even own the land where people live, just to make it more challenging. Now you can "exploit" people all you want by choosing not to employ someone you think is ugly or annoying, let's say. Well, let's say I'm ugly and you don't employ me. I'm ugly but I have friends. People know me and because I'm a nice guy they like me and are willing to help me. Several things can come from this. If everyone likes me then now we're all the more empowered as a town to go on strike and advocate that the company change their hiring policy. But let's say the town hates me, I'm a terrible person. I can try to redeem myself in the eyes of my town by providing services to my townsfolk, slowly building up enough savings to perhaps move out of town.
I've tried my best to honestly answer your questions. If I haven't addressed your core concerns I invite you to rephrase and we can try again. :)
> Your question is, how can we make sure people don't hurt other people if there's no government. Well, let's say we all live in this city. Do we want a police force? If we do, we can fund one and have it. Then it will protect us. Same as current taxes for police forces, only at local level. It's no different than having tinier countries. Switzerland is tiny and peaceful and they have a police force but they also have everyone armed and so everyone can help protect others that may be being harmed. And in general you will see less people being harmed if everyone is able to help.
So... are you an anarchist, or just a big fan of small governments? :) I ask because I've seen people who essentially define anarchism as "direct democracy in a town hall model", which is still a government, but try getting them to see that.
Anyway, one problem with this approach is the small government that isn't as small as your government and decides to take you over by force. And then keeps going until it's a large government again, and nobody who disagrees too loudly is left to complain.
Another problem is, well, what if one small government isn't expansionist, but is basically North Korea? Nobody leaves alive, nobody complains and lives, and nobody but the oligarchs has a say in government.
> If everyone likes me then now we're all the more empowered as a town to go on strike and advocate that the company change their hiring policy. But let's say the town hates me, I'm a terrible person. I can try to redeem myself in the eyes of my town by providing services to my townsfolk, slowly building up enough savings to perhaps move out of town.
How about this: Some people like you, but not enough. If they strike, or demonstrate, my police forces kill them and everyone else goes back to work, suitably chastened. My company takes a small hit, but compliance among the workforce is more important to my bottom line than not killing your supporters.
Also: Your plan to scrape up enough resources to leave is overly-optimistic, especially given how much of a following the KKK had in some towns in the 1920s. Do you know what a "sundown town" was?
> I've tried my best to honestly answer your questions. If I haven't addressed your core concerns I invite you to rephrase and we can try again. :)
I do appreciate your honesty. I'm also trying to be honest in this, and to explain myself well.
My core concern is this: We tried it your way, more or less, back in the Gilded Age, a time of big companies largely untroubled by governmental regulations of any kind and local governments largely left alone by state and Federal actions. Why do you think going back to that would not cause a return to the serious social and economic problems the Gilded Age had?
> So... are you an anarchist, or just a big fan of small governments? :)
I'm looking to minimize the amount of force used in the world. Increasingly smaller governments are in the right direction, and without central governments I believe we'd still organize ourselves in enclaves or archologies that would trade with each other.
> one problem with this approach is the small government [...] then keeps going until it's a large government again
People would only allow to be governed with explicit contracts and insurance in place. This gets into dispute resolution, which I'm still studying, but there are definitely ways to set incentives in place so that "becoming a large government" becomes a terrible course of action (economically, not just nominally and flexibly as is with law today).
> If they strike, or demonstrate, my police forces kill them
You can't initiate force in a libertarian society, or you will be inviting problems/conflicts. It's not economically advantageous to wage wars in a free society, so this won't be chosen often. The reason people go to war is because they want to make money selling weapons. This model only works with fiat money (historically, as wars are usually much more expensive than anyone could pay for). Real money can't pay for wars. Wars are really expensive.
Sundown towns were an explicit death threat to people who did not initiate force.
> We tried it your way, more or less, back in the Gilded Age
I'm reading a lot about the Gilded Age now and I'd really emphasize your "more or less". There was a lot of government meddling in the market at the time (railroads: government land grants and subsidies; in 1873 the Coinage Act demonetized silver [this is a huge intervention], which raised interest rates [artificially, which is why it's bad], which contributed to the first "Great Depression" until 1879). And that's not even the beginning of government interventions within 1860-90.
The Gilded Age is not an example of the free market. I'm looking at Celtic Ireland for something more like it.
> how many of your friends "don't give fuck all about the poor"?
Almost all of my friends. And I'm from Amsterdam, the Netherlands, generally considered a pretty open-minded, progressive, tolerant and caring place. My friends are educated, middle-class. They're caring and generous to friends and family and have disposable income.
But they're extremely hesitant to something even like Kiva - a charity which allows you to lend money to business projects, and actually get your money back. I've lent thousands and got all of it back and relent it over and over again. Worst case is you miss out on $0.10 a month in interest while putting $100 to work charitably, infinitely, in a way that can't in any way be described a handout, as going to corrupt governors, as creating a relationship of dependence or be used to buy drugs.
But they really don't give a fuck. Trust me. May not be the case for everyone, buy my very generous friends are only generous to the people they know and love. Outside of that, they don't give a shit.
> That's blatantly untrue.
I disagree. The numbers are clear. About 5 thousand people die each day from preventable causes, such as a lack of clean drinking water. That's 9/11 every single day, completely preventable, mostly children.
On that statistic, here's a quote
> It is estimated that it would cost about US$ 23 billion per year to achieve the international development target of halving the percentage of people unserved with improved water sources globally (currently at 18%) and improved sanitation services (currently at 40%) by the year 2015. But governments presently spend US$ 16 billion a year in building new infrastructure. The additional US$ 7 billion a year needed to supply good water and sanitation to some who lack it is less than one tenth of what Europe spends on alcoholic drinks each year, about the same as Europe spends on ice cream and half of what the United States spends each year on pet food. Compared to what governments expend on military weapons, the cost of providing people with the means to improve their health is small.
Yes, one country spends twice as much on our pets than is necessary to spend to worldwide solve one of the biggest tragedies the world knows, that kids die each day from entirely preventable trivial issues like diarrhea. That's why the whole ice bucket challenge rubbed some people the wrong way, because it was one big tragic joke that was hard to criticize because at the end of the day, it did raise money that wouldn't otherwise be raised.
These quick notes are but the tip of the iceberg. There's a lot of data and we can do a lot more with very little, but people don't care, and don't seem to care enough to know or consider to change their mind, either.
I donate money to various charities and causes and do use microlending too, but it's not something that I end up talking about with my friends, so they're probably not aware that I do it. Maybe that's the case with your friends too. I probably look like I "don't care about the poor" because I usually don't give money to random people asking me to support causes (like at events or stores) if I'm not familiar with the cause because I prefer to research where my money goes before giving it.
No in my case I've had these conversations and they've always dismissed them. Even my girlfriend who liked the idea hasn't bothered with something like Kiva while she's asked for an invite and I've sent her a few and told her several times, and she's done years of community service and studied international development. Somehow a lot of people dismiss participating outright despite saying it's awesome and saying it's cool I'm doing it and appreciate why Kiva's model, and some willing people seem not to be able to be bothered.
I'm not much different by the way. I've been participating in Kiva for quite a while and donate monthly to doctors without borders since I was a teenager, but despite being interested in the topic of development, I am barely motivated to learn the nitty gritty and get more deeply involved. I'm only barely beyond the point of superficiality to be honest.
Hope you'll talk to your friends about it, too!
As for not giving to random things at events, I don't either. Effective giving is extremely important. Here's some great talks to start with if anyone's interested:
For a quick bit of context, here's a very rough example. A guide dog for a blind person typically costs upwards of $20k for raising, training (both the dog and the blind person) etc. This improves the quality of life of a blind person considerably. Alternatively, we can spend about $30 per person to operate on people's eyes who are effectively blind due to a vitamin deficit and allow them to see again. This literally restores their vision. The latter is almost two orders of magnitude cheaper meaning you can help that many more people with every dollar spent.
That's one of the most extreme examples of why effective giving matters.
Has Kiva gotten better about choosing their lending partner organizations? It was big news a few years ago that Kiva was partnering with in-country lenders charging extortionate interest rates.
Kiva is a great idea in concept. They just need to take a firm stance against corrupt lending practices, especially since they present themselves as a charity and so no middleman should really be profiting incommensurately in the process.
I'm not too up to date, I should do some more reading. Without having researched this thoroughly, I can say this though:
The first link you posted shows some 'portfolio yields' (pretty much interest+fees, which can kind of be summarized as interest rates anyway) of up to say 80% in South Sudan for 2012.
But that's not as crazy as you may think. After all, South Sudan has an 80% inflation rate in 2012, meaning the two are cancelled out.
This may not be true for every year, for every partner, for every country, but inflation rates of 20% are pretty average and typical for a lot of developing countries. Accompanying interest rates of 20% may sound ridiculous to us, but it's not considering all prices and income in nominal terms rise by 20% per year, too, making the ability to pay off your loan similar to if income/prices and interest rates were 0 throughout the year.
The second link you posted is hyperbolic bullshit (like microfinance producing 'zero impact on a good day' or irrelevant facts that are clear ad hominem attacks, like how the founders have 'newly minted MBAs', which we all know has become the international and universal sign of 'inexperienced privileged rich people without a clue' and just a cheap shot. He doesn't for example mention he himself is writing the article with a 'freshly minted MBA', because he indeed has an MBA himself)
David Roodman has written a great book, but any nuance it may have had is completely thrown out the window by the writer of the article. For a more substantial view read the following article for example (which is far from unbiased by the way, as Grameen was the genesis of modern microfinance, but it struck me as fair)
It continues about a crisis in Andra Pradesh, a region my girlfriend just came back from, on suicides related to microfinance. There's no link to Kiva at all, therefore it's thrown out there just to defame Kiva, it merely proves that not all lenders are good lenders, which isn't news. Loansharks have existed for thousands of years.
In India specifically I can recommend the documentary nero's guests. It's been a long-term problem even before microfinance took off and has caused hundreds of thousands of suicides in the past decades. It's tragic, but simply not indicative of Kiva. It's an illustration of globalization's need to compete with factory farms, requiring large investments in land and fertilizers, and a single drought can ruin 10 years of profits, and Indian farmers with no social security, no welfare, no pension, no savings, no insurance, they have zero opportunity to recover from that. That's horrible, but I hope it's clear the solution isn't to not allow any financing of any farmers. The solution is not to stop programmes like Kiva. These problems are unrelated.
It then talks about things like cockfighting loans on Kiva. There was one and promptly pulled, the lenders were refunded. Again, no substance, just an article trying to attack Kiva.
Then it mentions child labor, that's actually not on Kiva as child labor is illegal by international legal standards and Kiva abides by such standards. But it's an interesting discussion. A friend is traveling to Bolivia next month to report on child labor laws there, as it has just legalized the practice. I'd be happy to have a larger discussion on this, but as crazy as it may sound, I'm not of the opinion that child labor should be illegal everywhere. Yes, in a perfect world, child labor should be illegal. It oughtn't be dismissed so easily, here's a quick overview, some comments might be good reading, too, one from a former child laborer himself:
Then it attacks Kiva for keeping $88m in the bank in order to raise money from interests by investing that money. It's just utter bs. You can read about it here:
Anyway I can go on and on, but it's quite clear that Kiva is not the 'scam' that he literally calls it without nuance. I'm not championing Kiva as the perfect solution to all problems. It's just a tiny NGO that does some good work by lending a relatively tiny $50m a year worldwide.
There is - sadly - a hierarchy of insight which privileges self, then family (sometimes), then friends, then associates and coworkers (more or less), then local community, then country, then other countries, then species, then planet and ecosystem.
The basic problem is that economics rewards smart choices for the earlier items on the list and punishes smart choices for the later ones.
So it's 'not efficient' to think about them.
One hypothetical solution is to make distant pain points personal. If you're directly, immediately impacted by someone else's misfortunes you're going to want to do something about them.
It's possible technology could help with this. But it may have to do it in some unexpected and new ways.
Absolutely, there's a joke on journalism that newsworthiness = death / distance. Evolutionarily that makes a lot of sense, for immediate selfish reasons it makes sense to pay attention to that which directly impacts you.
The tragedy here is that we're not really very moral creatures. Somehow when we see a child drowning in a nearby pond, we jump in, despite ruining our smartphone, expensive watch and new jordans in the process worth $1000 together, to save the kid.
And if we ask someone 'would you do it again, knowing it'd cost you $1000 of your stuff', they'd smile 'of course'. We celebrate this, and we call them heroes, and when we tell them they're a hero they smile 'anyone would have done it'. And if it was a boat, and 100 children were in the water, we'd still go in and save as many as possible, even if you're alone and can only save 3 kids.
But when we are presented with data that $60 can save a child from a painful death through the purchase of Malaria nets, we say no. We come up with many reasons. One is cost, people can't afford the $60. (Note in the previous example someone was willing to pay $1k to save nearby child). We might say there's too much suffering, we can't solve the problem. (Note in the previous example, someone would be killing to save even a few, as every life counts).
Technology could play a role. The big internet utopia is that we're all connected, and the world becomes a smaller place, a world in which everyone is a neighbour we care for. To a small extent that can be achieved. It seems we give more to our overseas allies, friends and those with historical ties. France is more prone to give to an Algerian earthquake than one in Tunisia, due to colonial, cultural, political, historical ties, for example. So cultural exchange through technology can help bring us closer, but only on a macro-level.
More specifically, we're seeing blogging slowly take off. You know how CNN etc now have twitter feeds, and a portion of the news is reported by citizens? That'll take off everywhere, as publishing (blogging, vlogging, tweeting etc) becomes easier and cheaper. That may shorten the distance between the needy and those with disposable resources, a role normally suited for NGOs that try to bridge the gap. Storytelling, reporting, data collection etc will become cheaper and easier, and that affects people's willingness to give.
> If you're directly, immediately impacted by someone else's misfortunes you're going to want to do something about them.
Indeed, although I don't really have any clue how technology could achieve it, or if we'd even want to. For now there's the correlary, which is that as countries become richer, natural family planning occurs and the birthrate goes down. The tendency for illicit outlets (like crime and indeed terrorism, e.g. check out the movie Horses of God) decrease. The level of education increases. Look at China, suddenly we get 300m extra middle-classish people whose children go to school. The point here is that rising tides lift all boats. And all ideas (and thereby all knowledge), Chinese ideas or otherwise, are like a candle, you can light someone else's candle without diminishing your own. So while I may not be hurt if a country is poor, I look forward to a country's development, as it benefits me, too. I hope that becomes a slightly bigger element in our rhetoric on things like national security, because we could partially displace military action with more international development.
> But when we are presented with data that $60 can save a child from a painful death through the purchase of Malaria nets, we say no. We come up with many reasons.
One very good reason involved that you didn't mention is that action at a distance like this has significant drawbacks. Since you mention mosquito nets specifically:
http://articles.latimes.com/2010/may/02/opinion/la-oe-shah-2... "In Africa, anti-malaria mosquito nets go unused by recipients".
There are several classes of problem you completely bypass when you're dealing with a drowning child a few tens of meters away. You can anticipate and reason about outcomes in a very tight feedback loop. You don't need to worry about intermediaries, the inscrutability of your impact or about the inherently different risk profiles of immediate interventions versus those that require significant ongoing commitments (to say nothing of corruption or fraud).
To put it in less-human and more-economic terms, the market for immediate interventions better meets the preconditions for efficiency. If you'd like to make remote intervention more common, perhaps you could do something to reduce the costs associated with the transactions involved, including non-financial costs associated with the opacity of the process. Many charities are already researching new structures and applying lessons learned from various trends elsewhere, like crowdfunding.
Governments spending money poorly has to do with poor governance, not necessarily people being uncaring. I don't want to support foreign wars, but lo and behold, my government spends half its budget blowing up civilians!
I also think there's a big difference between "caring" in the abstract and "doing something". It's a shame that more people don't part with more of their money for other people, it's true. But even the stingy likely wish others well, at the very least. Maybe people don't care "enough", or maybe people are too lazy to donate, but it's there.
Your take on that quote is very literally "glass one-third empty". It says we spend as much building new infrastructure as we do feeding our pets! I love little Rosie!! You can't accuse someone of not caring about something if they spend as much on that thing as their pet. Relatedly, it may be a bummer that we don't donate more, but the US at least still donates 2% of its GDP every year. That's not nothing.
The people of the US donate about 2% a year to various charitable causes, that's where his figure comes from, it's separate from what the government does. That includes a lot of internal stuff like people giving to their local church. Such charity is respectable, too, it helps e.g. the homeless Americans living on the streets, but it's separate from international aid.
The US's international development budget is only 0.2% which in my opinion is a disgrace. It's defense spending by comparison is 3.8%, more than an order of magnitude larger. That's for 2013, for 2012 for example it was 4.4%, in the sixties it was nearly 10%, and the 45-year average is about 5.5%. It makes that 0.2% look pretty puny.
As for the recipients, indeed military aid is larger than US Aid aid (the governmental agency of the US that does humanitarian/economic development) by a few billion. And so it's no surprise that foreign aid is very much tied to national security interests, which themselves are tied to US economic interests, making the 0.2% not a very benevolent figure beyond the fact that it's relatively small.
You mentioned Israel/Palestine, interestingly the WB/Gaza are the only group in the list of 25 top recipients that receive no military aid at all, only economic aid. For perspective, Palestine receives 20x more economic aid than Israel from the US. And Israel receives 6x more military assistance than Palestine receives economic aid. It's a bit of a weird situation indeed, as every few years the one army destroys infrastructure of the other territory, the US for part of that army, and then pays for the rebuilding of the infrastructure. Leaving politics outside of this, it's weird indeed, if I were a martian looking down from my spaceship, I'd have taken humans for quite silly creatures!
Also in this top 25 list of aid recipients, not a single country receives more economic aid than military aid. Every single country receives more military aid, often by a large margin. Except Palestine and Sudan (which receives as much military as economic aid).
Interesting factoid: remittance from the US (e.g. relatively poor Mexicans sending money back home to friends and family) surpasses the totality of all American military aid and US Aid, each, and, every, single, year.
I agree from a distance people don't care. What I've learned is we have to actually live it, for some time, for it to register. Short term experiences people count as inconvenient. Long term experiences people realize it's a problem.
It probably depends where you're from, but where I'm from, anecdotally, the poor lack money because they're "stupid". Of course it's not really that simple, it has more to do with confidence, stereotypes and drive, but they do have themselves to blame if you consider people have any responsibility for themselves.
That said, I believe most people are just a construct of where they're from and some of us are just luckier to have been born into a culture of drive, some the opposite, and we'd live in a better socitey if we tried to tackle those differences, instead of finger pointing.
> Your assume that poor people are poor because they lack the savvy to be born into the upper middle class.
You're the one making that assumption here. The parent commenter was just assuming that the two co-occur; the causal relation can easily flow in the other direction.
It should hardly be a stretch of the imagination that being poor gives you far less opportunity for a good education and far less time to do research. Not to mention the fact that the day-to-day stresses and crises of poverty make complicated decisions much more difficult to deal with succesfully[1].
TL;DR: Parent commenter assumed the two were correlated. You assumed that the causal relationship went "not-savvy decisions --> poor". "poor --> not-savvy decisions" is a much more well-supported direction for the causal arrow.
It's not that it's easier to make money scamming poor people. It's just easier to make money scamming people period.
Rich people and poor people tend to fall for the exact same scams. The Vast majority of VC's are really running get quick scams to separate people / institutions with money from it. And if you dig into it so is much of the banking sector.
EX: Morgage backed security's are really AAA. See savings and loan crisis part 237: http://en.wikipedia.org/wiki/Savings_and_loan_crisis Yes, the banking sector collapsed twice in 15 years, look out 2020. Or roll back to the stock market crash of 1973-74 where the dow lost over 45% of its value. Followed by 14% annual inflation!
Budweiser is a classic example of non scam product targeting that demographic. And there plenty of others. Just think bingo card creator not twitter.
> The Vast majority of VC's are really running get quick scams to separate people / institutions with money from it.
What you're saying is a calumny against VC's. VC's have helped create plenty of businesses and assets that investors value and have poured money into - like the whole Bitcoin ecosphere. Why, I have heard the top VC's, angels, and even YCombinator high mucky mucks raving about Bitcoin. If people listened to you, they might not pour their money into such valuable assets like Bitcoins.
Budweiser is swill that passes for beer in the USA, because it is cheaper than what most of the world recognizes as beer -- until savvy people made microbrews popular in USA, and they are not in grocery stores.
All over the world you can find people drinking similar lagers. Bubbly, mild flavor, easy to drink. They have mainstream appeal. Quilmes, Singha, Asahi, King Fisher, Labatt, Skol, Tsingtao, etc. There are too many to name. You can find at least one in every country I've been to. I would say Budweiser is one of the better examples of this style.
The Boston Beer Company (maker of Samuel Adams) is still technically a craft/micro brewery, since they produce (intentionally) less than 6 million barrels annually. The entire craft brew industry produces less than 8% of all domestic beer.
Calling Sam Adams a "major brand" is a bit of a stretch.
I disagree. There's a lot of pain that you can solve in everyday peoples' lives that people could create businesses around. Look at patio11. He builds appointment reminders.
Can you believe that's a real feed-your-family business? It is.
Here's what I think he was getting at. Build a solution to problems normal people have. An example of this: A jobs site that works for everyday people. IE: Monster.com that doesn't suck.
There's all sorts of developer rank and 37signals job boards for you to go to if you're one of the supermen(women). But if you're a normal person, There should be.
I don't think your first paragraph is true. Plenty of companies targeting savvy (read: up-market) consumers still use "dark patterns" to try and trick them or rip them off: Free trials that bill you unless you cancel, opt-out special fees, shady marketing that borders on spam.
Honestly, when I think of the things I regularly spend money on, there are precious few where I feel "This is a great product that I am happy to support" much more common is the feeling "Well, I really need X, and they're the only ones that make an even halfway acceptable X." or "I guess Y is okay, but it's overpriced for what it does."
> too many brains and dollars have been shoveled into resolving what I call ‘anti-problems’ – interests usually centered about food or fashion or ‘social’or gaming
A few things come to mind when I hear people say things like this:
1. This type of complaint usually indicates observer bias. People don't read about, or share, news about boring industries. Go look at the last 25 investments on https://twitter.com/VCdelta and see how many are truly "anti-problems."
2. People who look down their nose at entrepreneurs who don't pursue "Big Problems" probably don't realize how hard the "Small Problems" actually are.
3. If you think smart people are missing out by not pursuing some massive task, like helping veterans, then I have good news for you: that means you believe there is an opportunity for someone to improve society and make a lot of money in the process. Go invest your time and/or money, improve the world, and reap the rewards. If you don't know how to fix the problem then maybe things aren't as simple as people choosing not to make the world better. If you know how to fix these issues, but you don't know how to make money doing so, then you are really just saying that investors should instead be philanthropists. If you don't think you're smart enough/strong enough to solve these problems then maybe you shouldn't be telling others you know what is best.
Excellent post! The easiest way I can think of to help the poor is to change their core values which lead to things like being single mothers and joining the army as a last resort. However, that will seemingly require a ton of investment in education and birth control, which is political suicide for now. You can give them money and time, but you can't give them the ability to disregard their peers' values towards unprotected sex and getting married at 18 and not caring about school.
The article boils down to a basic fact: "The unexotic underclass are unexploitable." Despite all the dancing around this fact, it pops out in the article like a pimple on an ivy leaguing debutant's nose in their weekly dermotalogist face cleansing.
There is more than a hint of the populist a. randist philosophy throughout this article. Maybe this is a cult, and it goes without saying.
The privileged group (such as the author's) consider themselves hero's and the saints of today's countries, the ultimate problem solvers that defeat the overbearing complications of governments and regulation. The expectation of privilege versus the torrent of their own baser instincts that pervades their own reflection, is one even a clever author can not mask with the vanity of the wealthy with the needs of the exploited and poor.
Lets get straight to the point. The 'exotic' underclass are in resource rich regions. Investments into these 'entrepeneurs' is miniscule to the massive profits from the resources from the "emerging third-world countries".
The article is a complaint, that the unexotic underclass is unexploitable. Nothing much else is expected from the a group of sycophants whose main desire was to wheel and deal financial sludge on wall street.
I think you are rough on the author -- the author doesn't know they're complaining that the underclass is unexploitable -- they actually believe that 'entrepeneurs' can help the 'underclass' by selling them the right products, if only they'd try harder.
The author diagnoses the disease, but their prescription, 'innovating' new things to sell to the underclass (whether in the first or third world) -- will never cure it.
The unexploitable is a sad, basic fact--our system is set up to move heaven and earth to facilitate the transfer of wealth out of people who've accumulated it.
If you have little or no wealth, hardcore free-market civilizations have little to offer you.
Um, the U.S. federal government will be spending something like $3.4 trillion in the fiscal year beginning at the end of this month.
That's pretty much the exact opposite of truly "penniless."
As for gridlocked, sure, it's going to be difficult for the Dems to expand Obamacare, and it's going to be difficult for the GOP to repeal Obamacare, so by that crabbed version of "gridlocked" the author has a point.
But in reality, you'll see 99% of appropriations bills (measured by pages of text) over the next few months become law with enthusiastic bipartisan votes. You'll see the NSA's budget increased for next year by an enthusiastic bipartisan vote. You'll see the number of new federal regulations expand every year with no outcry from any U.S. senator of either major party. Etc.
That's pretty much the exact opposite of truly "gridlocked."
On a more HN-relevant point, the author's suggestion of fixing the VA is something that needs to be done by the Feds, not an app. They created these serious, systemic problems for veterans and they're the only ones that have the legal authority (and responsibility) to implement a fix. The WSJ has been writing for years about sensible plans for VA reform but nobody in D.C. seems to be listening.
Imagine I give you $20. Then I tell you that you have to spend all of that $20 on x, y, and z. Are you penniless? Yes. You have no money.
All of the government's $3.4 trillion is budgeted for, allocated and spent. What makes the government penniless is the fact that they can't do anything else because they have no budget for it.
And then we go into the usual falacy. No governemnt is a single coherent entity.
The people creating the budget aren't the ones doing the spending. And the ones planning the outcome of the spending are even a thrid, disjunct group.
If you try to sell something to the first group, you'll discover they are separated from the outcome by (at least) two layers of intermediaries, and probably have no idea about the problem. If you try to sell it to the third group, you'll discover that they have no power at all to put resources onto a solution. And if you try to sell it to the second group, you'll discover that they only care about accounting, and have no desire do think about resource allocation or real-world problems.
The whole point is to look at the budgeted allocations - if it has budgeted $100 million on foobar, then that's a $100 million marketplace for foobar-replacing products and services.
Need to distinguish between legislators and administrators. Selling a solution to latter is a losing proposition, because they are usually struggling to accommodate all the spending mandated by former.
Let's take a look at the real problems facing America and the rest of the developed world:
1. Mismanaged IT in critical infrastructure.
2. Misallocated funds in programs helping the destitute.
3. Cyclical loops of depression-lack of opportunity-lack of skill building.
4. Health disorders on a massive scale, like metabolic disorder, that can be solved with very simple things like diet and exercise.
These places are not where a bootstrapped startup can make a difference. They are mired in red tape and ignorance.
Show me the path to get people off of sugar diets. Show me the path to get the VA to modernize their forms and applications. I'll do it right now for free. It isn't just me, so many of us are ready and willing to help.
The truth is that we build Instagrams because people will use them. We build them because the biggest hurdle is Apple's insane app verification process; but the bigger problems are so much harder to solve because the blockades are human and political. Barriers that most of us can't hope to cross.
>that can be solved with very simple things like diet and exercise.
"Very simple", applied to diet? Try very controversial.
There are tons of different "good diet" theories, and many of them are mutually contradictory.
I've tried several, and done a lot of research. I've settled on "low carb" as sustainable, healthy, and actually effective -- and it doesn't need to be terribly expensive (though it's likely more expensive than subsisting on grains).
But getting people to change their diet -- really change -- is really hard. For low carb, it means no possibility of fast food (except the occasional burger or grilled chicken patty sans bun -- no fries with that!), so you have to plan more carefully. And if you don't want to be eating all-meat, you have to cook low carb vegetables and eat salads.
When I tell people how I eat, they generally tell me they couldn't eat that way, and the reason is that they have their own food habits/rituals that involve carbs. And it typically ends there.
If there were more places that were low-carb-friendly, it would be much easier. But aside from the occasional BBQ joint that offers non-sweet sauces, it's really hard.
[By the way: when you say "sugar diets", are you including all simple carbs in that? Because eating cooked potatoes gives you a faster "sugar rush" than eating sugar; to really fight metabolic syndrome, you need to get rid of high glycemic index foods as well, and ideally just eliminate carbs entirely. Natural fats, on the other hand, are fine if you eliminate carbs. I refer to my diet as the "bacon and dark chocolate" diet, because I can pretty much eat as much of both as I feel like -- and yet I've lost more than 30 pounds.]
I think with "sugar diets" he specifically refers to diets that contain a lot of Fructose, cooked potatoes contain starch, the liver and muscles convert an excess of that in glycogen and a relatively small amount of fat. Glycogen is actually really useful. Getting a rush afer having eaten an energy rich meal is what is supposed to happen. It's Fructose which is dangerous in large quantities and is linked to type 2 diabetes and metabolic syndrome. Among other things it also blocks Leptin signalling to the brain, so the brain does not properly register how much energy it just gained, leading to overeating and no desire for physical activity.
I didn't really want to get into the weeds with the comment, but every single diet starts with the same thing:
Eliminate artificial sources or additions of fructose / sucrose.
I'm not advocating cutting glucose or even the elimination of starch. I'm saying cutting out the Coca Cola and the sugar we add to yogurt / chocolate milk / pies / ice cream / sauces / candy / cake / muffins / donuts / pizza (sugary tomato sauce) / glazed meats / etc. is step one in stopping metabolic disorder. Basically anywhere you have sugar in the absence of water soluble fibre.
Even if everyone went to eating potatoes and steak every day, that would be a vast improvement. Obviously there is more that can be done, and this is where people start to disagree (dairy good vs dairy bad, meat focussed vs vege focussed, fruit good vs fruit bad, nuts good vs nuts bad) but all that stuff is secondary.
Eating bacon will definitely lead to weight loss, but it's high in cholesterol and saturated fats, usually high in sodium, and devoid of many nutrients that are good for long term health and exercise (like potassium, fibre, vitamin k).
But sure, you are already doing better than 70% of North Americans if you're staying away from fructose / sucrose.
>high in cholesterol and saturated fats, usually high in sodium
...which are not bad for you. That's part of the controversy.
Eating cholesterol doesn't raise your cholesterol. Piles of studies show this. Eating carbs raises your cholesterol.
There are basically no studies that show eating saturated fat is bad for you. The one study that was pushed by industry (and a SINGLE nutrition researcher who happened to be leading the FDA) back in the 50's was using hydrogenated coconut oil. Even the recent FDA guidelines admit there's no research-based reason to avoid saturated fats.
And salt turns out to be fine for you unless you've already got high blood pressure.
>devoid of many nutrients that are good for long term health and exercise
I do eat vegetables. I eat almost zero fructose (what you'd find in a small handful of blueberries, once a day or so), and less than a couple of teaspoons-worth of sucrose in a typical day. And I get about 6-8 hours of intense exercise in a typical week.
But all of that was true before I went low-carb, and I was stuck around 200 lbs unless I effectively starved myself. With no other lifestyle changes, switching to a low-carb (and high fat) diet caused me to drop 30 pounds in six months; my memory improved, my thinking is more clear, and I've been healthier (and lighter) than I've been since high school.
No other diets I've tried have worked (including going nearly vegan at one point, and trying to go low-fat caused me to sink into depression, which is a known side-effect). This one works and is awesome. I don't see ever going back.
that can be solved with very simple things like diet and exercise.
Not everyone can afford to buy low fat organic produce at a boutique farmer's market that's open when they're at work, or requires a car to visit, and charges a fortune in terms of price-per-meal.
Not everyone has the time, money or knowledge to make a home cooked vegetable-rich meal.
There is vast opportunity to improve portion sizing.
It won't fix everything, but people that don't realize their fast food soda has 500 excess calories in it will benefit from pretty much any reduction in soda intake. Those calories probably aren't even contributing much towards satiety.
(I'm not claiming every fast food customer is consuming 500 excess calories of soda with each meal, though I'm sure some of them are. The point is that there are very straightforward opportunities that don't involve major lifestyle changes or added expenses.)
The solution to the western diet is right there around the edges of the supermarket, and probably most people by now realize it's there, but they keep buying the flavor-enhanced processed grains because they taste good and are addicting. There is no red tape from people solving this problem for themselves, and that problem (#4 from pi) is about 10000 times greater than whatever problems people have or had with taxi provisioning.
But how do people know to go to the edge of the supermarket when the government has been telling them, and schools have been teaching them go to the middle? This is the food pyramid the government was pushing from 1992-2005. You should have 6-11 servings of bread, rice, pasta, and cereal a day! It was red tape and ignorance that pushed people to the middle of the market.
That's still not very bad advice. I'm guessing it would be a great improvement on the average lower class American diet. Cut out most of the fruit, fish and vegetables, increase sweets and meat and you've got the average modern lower class diet. Carbohydrates make you eat a bit more, but they're golden otherwise and they're really cheap. And if you look at the other categories it seems they use the word "serving" a bit different than you and I.
Obesity isn't confined to the lower class. Go to any Olive Garden and watch someone eat an "Endless Pasta" bowl (all you can eat if you are not an Olive Garden fan), white bread sticks, and diet coke. Low sugar, but still horrible. It is a trap to think of sugar differently than other simple carbohydrates in your diet.
Obese Americans are not obese because they eat too much pasta and bread, but because they eat thousands of extra calories in the form of raw sugar and fat.
A 330 ml can of cola is about 140 calories. A "Big Gulp" with 15% ice is about 360 calories.
This may be true in a strict factual sense, but I think the interesting question is why people are eating thousands of extra calories on an unprecedented scope.
Is it simply because more calories are available or is it because industrial foods that are scientifically designed to trigger an addictive response are completely devoid of the nutritional value that their flavors signal? The metabolic and satiety response to 360 calories of carbs in the form of a Big Gulp is completely different to the response to 360 calories of carbs from potatoes.
Sometimes it's hard to tell if someone on this site is parodying an out of touch techie or actually is one. It's a lot easier and cheaper to just eat fresh, healthy foods than it is to try to invent a new food alternative.
It's a lot easier and cheaper to just eat fresh, healthy foods
"fresh foods": So now you need to have enough space in a working freezer to store all the fresh vegetables/etc that you buy at a much higer price then junk food. Or you need to have enough time off to go to the boutique farmer's market that obvioulsy isn't in a poor-person area like where you live in.
Soylent is fucking expensive and it is ridiculous to suggest that people eating kfc / mcdonalds / etc and drinking liters of soda a day will convert to Soylent.
$3/meal is more expensive than kfc / mcdonalds? Maybe if you live in the US and only eat a couple of items off the dollar menu every time. In Canada a meal at McDonald's is $10...
And I am one of those people that used to live on McDonald's and Burger King all day every day.
To those who commented on the financial or regulatory hurdles in serving these people:
Maybe another way to look at this is: instead of creating a startup to serve veterans or single mothers–why not create a startup that can employ veterans AND single mothers?
One of the biggest problems facing single mothers is the high cost of childcare. In many instances, it makes going to work almost pointless because it eats 50%+ of your paycheck. So, why not a crowdsourcing service (a la mechanical turk/crowdflower) that employs single mothers at home in the United States? (personally I think people would eat that up and even pay a premium for US-based workers)
Veterans could also do crowdsourcing work, on-demand security, and on-demand driving/moving off the top of my head.
Yet another way to tackle this could be to go into an industry that already has the means/access to help these people and partner with them. I'm mainly thinking of education. California's community colleges (there are over 100) cater to these people already. They have night classes and veterans offices. They have programs for in-demand jobs like nursing. Yes, there's the same bureaucratic/regulatory issues since they're a government institution ... but if Starbucks can do a deal with Arizona State, surely a founder who is ambitious enough can get something done.
>> Maybe another way to look at this is: instead of creating a startup to serve veterans or single mothers–why not create a startup that can employ veterans AND single mothers?
I have a friend who does something similar to this. It turns out to be really hard, and not exactly hitting the exponential growth she wants despite being in the media frequently. Keeping the cash flowing is hard.
The reason the startup scene is comparatively easy is that everyone is motivated, energetic, young, very intelligent, able to work long hours, and the products can scale without needing a mirrored scaling up of staff, structure, management and materials. Aiming to employ large numbers of people is a very, very different proposition.
A very obvious solution would be to have some proportion of single mothers watch the children of the other single mothers while they work outside the home.
I wouldn't be surprised, however, if there's a metric shit-ton of misguided regulation around running home daycares that makes this impractical.
> Maybe another way to look at this is: instead of creating a startup to serve veterans or single mothers–why not create a startup that can employ veterans AND single mothers?
An even better question is, why aren't businesses and start-ups today employing veterans and single mothers?
Unfortunately (or fortunately, depending on your viewpoint and how the profits get distributed) there tends to be more money in replacing people with automation than in employing them. And even when employing them there is always the incentive to pay the least amount that the market will bear. Crowdsourcing etc also provides very little in the way of job security.
The "unexotic underclass" that the author refers to is already being served by a multitude of entrepreneurs and businesses. The degree to which it is served well varies considerably from demographic group to demographic group, geographic region to geographic region.
What the author apparently fails to recognize is that the biggest challenge for the entrepreneurs and businesses trying to serve her "unexotic underclass" is access to debt financing.
Venture capital is not appropriate for every type of venture. While there's a strong argument to be made that venture capitalists would be wise to make a conscious effort to give greater consideration to businesses run by and targeting people who don't look and live like they do, the reality is that the economic structure of venture capital is incompatible with the majority of businesses that require capital. Put simply, for every business for which equity financing is appropriate, there are probably a hundred or more for which it is not.
If the author wants to see more businesses serving the "unexotic underclass" and serving it well she should focus more on the market for debt financing and not the market for equity financing.
> If you're itching to start something new, why chase the nth iteration of a company already serving the young, privileged, liberal jetsetter?
Because those are the projects which angels and VCs bankroll. Because those are the people who have disposable cash.
I was just reading an article on a conservative web site, actually one run by Ben Horowitz's father ( http://www.frontpagemag.com/2014/dgreenfield/cbs-colbert-and... ). It talks about how TV doesn't care about older viewers, rural viewers, and increasingly only cares about young professionals on both coasts, and how television programming is being focused on such people. Not sure how true it is but it makes sense.
Audre Lorde once said that the master's tools will never dismantle the master's house, and capitalism is not going to solve the fundamental contradictions of capitalism, other than by imploding, as so many economic systems before have done (feudalism, slavery, primitive communism).
Also, anyone who has done work organizing working class people knows the solution is not for a genius from MIT to swoop in with some corporation to try to fix problems wrought by corporations. You see what is possible and organize around that. The American white working class once had power, and it chose to send bombers north of the Yalu river, support a war in Vietnam, on and on up to modern day with Obama's support of the Honduran's military overthrow of Honduras's democracy etc. The AFL-CIO saw it's steepest decline under someone who never worked or ran a union, but was involved undermining foreign unions in cahoots with the CIA and American big business. And on and on. Now they go down to fundamentalist churches and watch Fox News as they age, and slowly become a minority in their own country. Empowering white, blue collar Americans gave us No Gun Ri and My Lai. Thanks, I'll pass. I'm glad to see the sun setting on the white American working class.
Yeah, as someone who qualifies as privileged having grown up firmly middle-class and blessed with computers and the interest to learn them since the 80s, I am not incredibly inclined to channel my entrepreneurial spirit into something unfundable to satisfy the moral call of an ex-Goldman MIT graduate on a guilt trip. Put simply, I can not move the needle through self-sacrifice. That doesn't mean I don't have ethics and integrity about what I choose to do, but just that I'm not fool enough to believe I can solve (eg) poor single mothers' problems in this country with an app.
The problems are not going to be solved until culturally we come to a common understanding about what the concentration of wealth is actually doing to the country, so the zeitgeist can move past this sort of ra-ra Fox News pro-corporate anti-socialist propaganda that millions of people believe on principle because it appeals emotionally to their rugged individualist values, but actually only serves as an idealogical wedge to distract the proletariat while the oligarchs continue with business as usual lining their pockets behind the scenes.
I have personal experience with this from working with multiple single mothers while working retail as a starving student and the most effective way to get single mothers out of poverty is to get rid of the single part of their description. Patching the symptoms temporarily didn't seem to help much.
I'm not talking about some retroactive guilt shaming idiocy or a very niche dating website (although I've seen that work...) just from personal observation one chick and one kid in one apartment is just doomed, absolutely doomed, but you get three of them in a house having each others back and watching each others kids when they have to, and they get somewhere, at least better than the one trying to go it alone. And from direct personal observation, usually way the heck too much interpersonal "reality TV show" class of drama. Maybe the key is fixing the drama, somehow.
I know this sounds hideously 2009-ish but a social network for single moms is probably not the worst idea ever. Once you organize them, your list of three problems kind of takes care of itself.
Precisely that: a way to pool resources plus a bridge loan to cover a year of mortgage payments that are now her sole responsibility following a divorce.
I built language learning applications that reached over 10 million users in the developing world and my brother built a startup that employs only ex-cons in one of the worst neighborhoods in America.
We learned a few things from actually doing this:
TL;DR its really expensive to make products for the 'forgotten underclass' due to many unforeseen issues.
1) Poor areas are overrun with corruption and graft. Its very hard to do the right thing, when individuals with power will actively work to put a bribe barrier between you and your work. Its like these individuals smell out good intentions and attempt to tax them for the perceived weak-minded good intentions. An example would be, after my brother created several successful startups using ex-cons, he wanted to turn the program over to the City. He quickly learned without a politician attached and 'sitting on the board' you couldn't do this. The price of this? Paying him 70% of the donations coming in to support the program. I have numerous examples more blatant in 2nd and 3rd world nations.
2) Economy of Scale. You must serve more customers in order to make up for lower prices the market will bare. This is easy to say and very very hard to do. As you scale, you can't afford more workers, so your quality inevitably goes down. Other things like support, QA and tasks that don't scale past 1:10 user rations become very poor quality, turning off people to the product and making you ashamed of your work.
3) Not knowing what the problem is. You can guess at problems for a class of people you aren't a part of, but its pretty hard to design a new solution for them. Your instincts are often wrong and you have to do a lot of expensive testing and research you can't afford to get the right solution. See problem 2.
4) Distribution to customers. Want to get the product to this underclass? Do they have smartphones? Do they have computers? Often no. How are you going to ensure they see your product let alone purchase it? Maybe they do have smartphones, but they use everything from dumb-phones to android 2.3 devices to Nokia-whatevers. Development for all those things will cost you 5x as much as just making a food iPhone app. (see 2 again)
5) Value offer. This becomes very very hard when your target market is low on funds and often makes anti-self-interest choices. The individual who uses what little money they have to feed their family with fast food is going to pay money for your education app? Its pretty unlikely, they have more pressing needs in their hierarchy that they are often too scared and desperate to solve properly.
6) Their problems can't be solved with software. Often these people have real-world problems that require hands on work and real product to solve. My brother worked very hard to add software where possible but needed to do mostly 'real world' labor to get to his customers. Software is inherently cheap to produce compared to hardware and manual labor.
Finally, this work will eat you away until you have very little left. Your rent will go up as your friends sell their startups. You won't have time or money to rebalance your life with exercise or entertainment. You will becomes socially isolated from those who have the money to support your work. You will put immense pressure on your significant other to either make up your losses financially or support you. You will put your children's future in jeopard. You won't have children. You will see little return on your effort. You will be fighting a society which applauds your effort but is unwilling to help you continue.
In short, you might become part of the class you are trying to help.
One other thing here: credit. It relates to #5, but drastically increases the cost of doing business.
The "unexotic underclass" tends to not be very prompt at paying their bills. They often don't have credit cards (or even enough credit to get one), so the typical billing mechanisms are out of the question. Things get prioritized, and a lot of people will choose to let their bills go to collections before they pay them (if ever).
Sending debt to collections means you only get about 50% of what you're owed (and sometimes far less). It's usually not even worth going after people for less than $100. If this happens to even a small percentage of your customers, it can wipe out all of your profits.
There's a reason nobody goes after the "underclass" at any scale: even a minor downturn in the economy can cause a large spike in the payment delinquency rate. The only companies that seem to have success with these customers border on criminal enterprises: places like payday loan shops, pawn shops, etc. are popular because they provide temporary relief for the biggest problem most of these people have: where is the money for rent going to come from?
>There's a reason nobody goes after the "underclass" at any scale
There are plenty of companies that go after the underclass at scale - things like "no bank needed" debit cards, prepaid phone cards, payday loansharks, western union-style money transfer businesses, public transport companies etc.
Eliminate things from the list that are payment at service time (fast food, transit, stores, etc).
Even cable, America's biggest luxury addiction, has some trouble obtaining payment.
However what I'd like to see far more is a systemic solution. Instead of permatemps, part time workers, new hire probation (sort of), or even wellfare, 'unemployment' should mean more like a new deal program. There will be something for all workers to do, preferably in/near their training. If there is not, based on aptitude, retraining will be subsidized while more generic work is scheduled around the training. All initial hires/temps/etc will be paid for at full pro-rated cost (but less inherent risk/mutual solidity) by companies in question. The government will also pass on only a discounted rate of payment (but full benefits otherwise) to encourage the worker to land a job outside of the support system.
Very well said. I greatly respect you for what you are doing/have been doing. It's obvious from your comments that you are not just talking nice, but have been there.
I'm pretty sure no one has responded because no one knows how to respond to your bleak ending. Probably because it exposes our selfishness. I know I don't know what to say.
Do you have any further info about the work you and your brother are doing/have done?
I couldn't continue, partly because I had predetermined risk going into this (Strongly recommend a dollar figure in loss and time limit before you try helping society) and partly because I just burned out.
Google reached out to me, and after a short interview made me an offer.
My significant other and I are now officially 1%er DINKS over night and are constantly working on what it means to continue to do good in our situation. She has focused on using her position in management to find unemployed talented folks to add to her teams. Right now she distributes nearly $1m in total yearly income to very talented individuals who also tried to do good but found themselves unemployed and in the same position as myself.
I have been trying to do honest work and learn at Google, while studying a society that is post-resource -- specifically how it reduces conflict and issues. I try to think about how some of these structures could be applied in places with need.
My brother, with a family, is walking on water. Over the last 2 years he has put over 100 ex-cons and homeless through his program with 0% recidivism. At a total cost of 40k per person this reduces their cost to society by 50% in the first year then often 100% by the second year.
He is, however, burned out and looking for an exit. His real world meaningful labor doesn't map as well to easy Silicon Valley hiring and he continues to try to find a way to move forward.
My great worry is we are doing what our educated class always has done. We try to help, get scared off when we get too close, then retreat to our safe enclaves of high pay and social walls -- then close the door behind us. I feel so guilty about this it keeps me up at night. My only hope is that we can somehow continue to thrive, but keep the door open to anyone who wants to be a part of it.
Don't feel guilty; it's not a problem that can be solved overnight or only by a small handful of wealthy people. It's going to require a shift & change of thinking by society in general. It's going to happen very slowly and it starts with people like you showing compassion & understanding; instead of making comments like this[1].
When you have conversations with other wealthy & powerful people, you'll be able to correct them when they make negative stereotypes comments about the poor. Slowly, very slowly, your knowledge of what it _really_ means to be poor and all the corruption around it will help others at your economic level understand what it's like down there. That kind of knowledge has an effect on decision-making and when wealthy & powerful people make decisions, it affects us all. Hopefully some people in your social circle have shown at least a little interest in knowing about your experiences.
Consider writing a book. It sounds like you have enough material to do it.
I'm hoping that new, more effective and cost effective educational methods like Khan Academy and the like at least help keep that door open. Gotta get everyone internet access though.
Maybe that's not your fault. Maybe it was wrong (albeit forgivable, of course) to blame the other people who did that. Maybe they all did it not because they're bad (or weak) people, but because the system is set up in a way that there's really only one possible outcome.
Maybe voting to change the game is the answer, rather than playing with crooked rules.
Unfortunately 40k per person isn't likely to get the attention of the someone trying to maximize the amount of good done per dollar (those of us who follow GiveWell) when the money would go further with the charities they currently recommend. The "exotic underclass" has the "advantage" if you can call it that of benefiting a lot from small amounts of money per person, so you can help more people.
We need different arguments for why we should help people closer to us. One reason might be that it's less abstract than people in a different country that you'll never meet, but I think that argument needs to be developed.
It already costs the city 70k per person per year to go through a recovery program, this reduced it to 40k the first year then 0 the second year -- netting large municipal and state savings.
That's an excellent reason why the city or state should fund it.
For a private charity, net gain is one person helped and 70k / year spent with average efficiency by the government on something else (or spent by taxpayers if it's returned). That's somewhat hard to judge versus alternatives.
I'd like to find out more about your brother's program. How does he find work for them? What are the key barriers to their finding and keeping effective employment? What are the important factors that contribute to the 0% recidivism he sees?
He starts his own small businesses and employs a set of ex-cons while mentoring them. He then turns management over to the most talented over the year, and finally hands the entire company over to the most senior person in the program. Meanwhile ownership is retained by the parent non-profit. He has done it three times and the key to low recidivism is his hands on approach. He spends time with every worker, has a magnetic personality, and is able to speak and inspire people who are at the very bottom.
This is awesome. It probably won't work without him. Maybe a serious vacation and renewed focus on work-life balance & delegation could help with burnout? I've been very surprised at how much those can help.
> An example would be, after my brother created several successful startups using ex-cons, he wanted to turn the program over to the City. He quickly learned without a politician attached and 'sitting on the board' you couldn't do this. The price of this? Paying him 70% of the donations coming in to support the program. I have numerous examples more blatant in 2nd and 3rd world nations.
That sounds like an excellent situation to gather the evidence and get some newspaper coverage.
Guess who's more important to the newspaper: this one guy who encountered some "you were naiive to not expect this" corruption, or the senior city hall politico? And what did he do, anyway, ask for a seat on the board in return for his help? and that position comes with a salary? We can't run that story, quit wasting our time.
Its more that its never explicitly stated at any point in time or by any individual.
But if you've ever worked at this level, you know the connections made by those brokering deals or in close proximity to dealmaking is often the only way to find success. You need these people to connect you with the wealth or opportunity, and they charge for that connection.
There is a difference between stopping an instance of a problem, and an entire species of problem. Just because the species of problem (municipal political corruption) persists in various forms, doesn't mean any individual corrupt politician will get off scot-free. They go down all the time, removing the particular barriers they had put in place.
Do you think it's safe to target smart phones on the assumption that they'll be reasonably ubiquitous reasonably soon? And is there any major price threshold where a decision goes from being a casual purchase (only requiring reasonable confidence that the product might be useful) to being a serious decision that might be nixed even if the product is attractive?
Yes, the market is shifting towards affordable smart devices, but there is still a lot of fracturing that makes development hard enough even for premium audiences.
I think that finding this classes problems, a good solution, and mapping them to software is the real problem -- the device proliferation and connectivity is just a compound issue.
There are others that believe the inverse though, devices and connectivity proliferation are the primary problem and solving it will allow for the next generation of startups to address this classes real-life issues without the hardware overhead.
Politicians trying to leech off entrepreneurs trying to help the poor. Where are the folks that say Libertarianism can't work because we can't expect private enterprise to help the poor, and only a centralized government has the incentives to do it?
I applaud your and your brother's efforts. Hopefully this will help people realize who has an incentive to keep the poor poor and who actually wants to help them.
Maybe I lack vision - but I don't see how any of the problems of the white collar and working poor can be solved by Silicon Valley. It would be impossible for a startup to work with the government in processing Veterns claims, for example. The regulations barriers are immense and the security and compliance problems are legion.
Similarly, how are startups supposed to improve the earning potentials of the working poor? MOOCs? Don't make me laugh. Most of these people wouldn't want to take one, they are not interested in an Education. They can barely fit in their current paycheck to paycheck lifestyle into their current schedule. And even if we could retrain them - as what? Coders?! Most people do not have the aptitude or patience nessecary.
Domain specific knowledge would help. Find a vet that landed on their feet and ask what worked. Talk to a few people inside the VA and figure out what makes claims go faster vs slower. There are businesses that exist today where their sole revenue stream is providing accurate and up to date court forms.
To think that technology can't help the poor or unskilled is ignorant of history. The assembly line was a means to use unskilled labor to produce a skilled piece of work. Same reason you can have bankers who can't calculate an amortization by hand.
Articles like this one paint the situation as a moral imperative, but its actually an opportunity. If you can design a tool to make people at the margins more valuable or competitive, you'll be able to capture some of that value as well.
I feel you're dead-on about domain-specific knowledge.
An effect of hyper-capital (not a problem with moderate capitalism) is that everyone gets hyper-specialized. No one experiences the Veteran's Administration until... they're in it with brain damage and can't write code for it.
But I would bet that any who regularly reads this website could hang out in the V.A. as an intern for 30 days and add at least $100,000 worth of annual value.
Even if it was just improving paperwork - machine learning for diagnoses - delivering education - encouraging exercise.
These problems are unexotic at first glance, b/c our society's values are so crazily skewed.
> Articles like this one paint the situation as a moral imperative, but its actually an opportunity.
I guess the author failed in this regard, b/c I read it as trying to show how it's an opportunity, although the article itself lacked your insight about domain-specific knowledge.
Not every solution takes the form of a startup. And there's always the lifehack of asking the working poor what they think, and listening to them. Maybe some of them have the vision we lack.
> MOOCs? Don't make me laugh. Most of these people wouldn't want to take one, they are not interested in an Education. They can barely fit in their current paycheck to paycheck lifestyle into their current schedule.
That's an obnoxious and senseless statement. A MOOC is (1) lower cost, and (b) more flexible than existing *very popular education programs (ITT, DeVry...), solving the two problems you called out.
Studying using MOOC requires level of self-motivation that most people - both poor and rich - simply lack. Realistically speaking most MOOC do not add much value on top of a book you can get for free from any public library or buy for $30 on Amazon. Every time new medium is created people think that it will revolutionize education but the last time it was true was when printing press was invented. Radio lectures, TV, CD lectures and now MOOCs are fads and nothing more at that.
I think they require time. I started a Coursera machine learning course, then had a busy couple of weeks, where I couldn't do it. Got another week on, then another busy week. Makes learning a lot more difficult;t if you only get small fragments of time to focus on it.
> The regulations barriers are immense and the security and compliance problems are legion.
Paging Uber ... I am kidding, kind of. I do wonder what would happen if a well-capitalized startup did something in this space. Provide services directly based on the hope/promise/belief of future repayment?
> I do wonder what would happen if a well-capitalized startup did something in this space.
There's a problem with this line of thinking... A statup is a company that lacks capital, and compensates that by an improved supply of other kinds of resources[1]. Compared to a mid-sized company budget, VC rounds are change money.
Red tape and government bureocracy are common examples of problems that can be solved with money (== people's time, not competency), and nothing else. Startups in that enviroment either discover one of the few exceptions or die.
[1] Besides other constraints you may want to apply to that term, like high growth potential. The point is, that one constraint is there.
The big problems are structural. And the first structure that needs to be fixed is your belief system, which supports the existing structure.
Start with the word "developing nation". I believe that is a racist term that is used to cover for gross inequality of resource distribution between relatively rich nations and poor ones.
Social Darwinism is another belief system that causes quite a few problems. Basically, anyone who isn't doing well financially, at a root level, many believe that they should either die, or live in squalor, because obviously they have little worth to society. People won't say that outright, but when you get right down to the details, most believe that.
You really have to look at the function of money in society and how it connects to the structural belief frameworks.
Also, in the existing framework, the general availability and buying power of money (which currently has been going down for some time) affects everything and everyone.
The _vast_ majority of people on this planet do not have any security for basic necessities. That is a result of the basic organizational principles of our "civilization". And the belief system assumes they are inferior and that helping that majority of people is a charity effort.
I look to technology to continue to mitigate these structural/cultural problems.
Yes, somehow the vast majority of investors and entrepreneurs out there have continually overlooked this truly great area of opportunity.
That's totally the most plausible explanation here - certainly more plausible than 'this market isn't being served because serving it is largely a sucker's bet.'
What people fail to realize is that Facebook/Google/Twitter/<insert every other digital advertising company that exists in SV> are solving the greatest business problem that exists - how to create a customer.
Peter Drucker:
There is only one valid definition of business purpose: to create a customer.
It is the customer who determines what a business is. For it is the customer, and he alone, who through being willing to pay for a good or for a service, converts economic resources into wealth, things into goods. What the business thinks it produces is not of first importance—especially not to the future of the business and to its success. What the customer thinks he is buying, what he considers “value,” is decisive—it determines what a business is, what it produces and whether it will prosper.
The customer is the foundation of a business and keeps it in existence. He alone gives employment. And it is to supply the consumer that society entrusts wealth-producing resources to the business enterprise.
Because it is its purpose to create a customer, any business enterprise has two—and only these two—basic functions: marketing and innovation. They are the entrepreneurial functions.
I'd just like to point out the simple fact that veterans do get one certain type of benefit coming home, and it's that they get automatic preference for any federal job placement they apply for. The preference doesn't expire on placement, but exists for promotions too. Plus they can get ~0% down mortgages, no problem. So it's not all doom & gloom.
One of the things I think is under appreciated is that it's not like the poor don't have money. They do, they just can't afford to waste it on $15 a pop food delivery. But at the same time, it's hard for poor people to spend money efficiently. The yuppie who shops at Costco is getting a better price on food than someone who lives in an urban food desert. Is there a technical solution to these inefficiencies? I bet there is.
I think the biggest, most fundamental problems facing at least the urban poor is the breakdown in social structures in these communities. And social networking technology could help here. There just needs to be a focus shift from helping teenagers sext each other and get laid to helping their parents make sure they're not cutting class.
Side 1 is the "I want to have a startup so that I can do something important to me.
Side 2 is the "I want to have a startup so that I can do something important to others. I will find some way to make this important to me as I go along.
Side 1 folks are tweaking on a moral crusade. Let's change the freaking world, folks!
Side 2 folks are deeply ignorant. I do not know what people want that I can make. Maybe they want better restaurant recommendations based on blood type. Maybe they want job recommendations. Maybe somebody would want jobs for cats. Has anybody done that? Beats me.
If this were a war to improve the future of humanity, Side 1 folks are always the ones charging up the beach on D-Day. Rally after me, men! The cause is just and victory awaits!
Side 2 folks are always trying to find a better way to make the machine gun fit to the machine gun mount. You know, if the bearing fit this other way, machine gunners would have a bigger field of fire....
Side 1 guys are the evangelists. Side 2 guys are the plodders, plodding along. Tinkering.
There is no right or wrong answer here. One out of every 10K or so of the change-the-world guys actually change the world. Very cool! One out of 100 or so of the better machine gun mount guys actually do something that somebody, somewhere finds useful. Very cool!
My problem is when the Side 1 guys go on these long tears about what the rest of us "should" be doing. Dude. I've been working and living in the startup scene for a long time. Am I supposed to get all emotionally fired up because of social injustice? Or perhaps just go do something other folks might find useful? Because that thing where you run on passion for a year and burn out? That's not so much fun.
I love charities. I love hobbies. I think it's fine to have something that's a cross between a hobby and a charity. Perhaps this is what the side 1 guys really want for the rest of us and they are just doing a bad job of explaining it. Or perhaps they should just leave the rest of us alone while we go try to make something useful to somebody, anybody.
I'm not really understanding the author's position. He seems to think the point of business is to solve problems rather than turn a profit. There are no end of problems to solve in the world, but only a very few of them are profitably solved. You can't keep going without profit. If you want to solve a social problem, you need the tools of social policy, which can bring enough resources to bear that you can afford to ignore profit.
> They're (not) profitably solved because the economic and political systems have been designed to make them unprofitable.
Not so, and even if it were, that would only further underscore the fact that you still can't solve them with capitalism. The author is effectively recommending that the local high school football team get out there and fix homelessness in the city. The best you can hope for is that they'll provide a nice photo op for the mayor.
> The basic problem is a feedback system which rewards certain activities as 'profitable' and punishes others as 'unprofitable'.
Could you go into detail? Because to me that "feedback system" just seems to be the market. You can't tell people what to want or what to like. That's the basic reason why we have markets.
You might be able to influence the system in small ways through social policy, but again, you can't dictate to people what they should want or not want, because they won't listen to you. The best you can hope for is something like the Fed. You manipulate the levers you have, not the levers you wish you had.
What the author should have done was offer up some ways for Silicon Valley to solve big social problems in profitable ways. Since they don't exist or are really hard to find, otherwise someone else would have gotten rich already solving them, all she can do is moralize.
No it isn't. There's no such thing as 'markets' and it's sloppy thinking to believe there is. What we have have is a political system that uses a stylised propaganda framework to propagate and reinforce itself - much as the Church did in the middle ages.
Belief in 'markets' as some kind of metaphysical efficient all-but omniscient decision-making entity is central to that, in some segments of the population - just as belief in Church dogma used to be equally pervasive.
The reality from anthropology is that there's nothing inevitable about trade or markets at all. Some cultures don't have any concept of a 'market', or if they do, trade is a peripheral activity, and certainly not used as a tool for centralised decision making.
>you can't dictate to people what they should want or not want, because they won't listen to you.
Which is why advertising is such a huge industry, and all governments use propaganda?
It's actually incredibly easy to dictate what people want. What's hard is creating an educated and informed population capable of original, independent, creative thought and high-quality long-term strategy.
Using the many available tools of persuasion to direct the thinking of a majority of the population isn't difficult at all.
If you believe your culture doesn't do this, it's possible you may not have asked some hard questions about how it works.
One thing that annoys me with this, and I keep noticing time and time again from people who are presumably more used to lecturing selected groups than writing for public consumption, is that there seems to be an assumption throughout the text that the people being referred to within it are not going to be part of its audience, despite it being posted on a publicly accessible web page.
These companies exist, but they don't get hyped that much by the VC marketing machine and are probably funded outside of it. In a way, those companies are like Walmart, MVNOs like republic wireless and apps that are popular, but you don't hear about because they don't target that lucrative market with disposable income. How much do you hear about coupons.com?
>entrepreneurs have stopped chasing and solving Big Problems
What is strange to me is that people believe entrepreneurs ever solved "Big Problems". Who in history falls into this class? Thomas Edison? Alexander Graham Bell? Henry Ford? Guglielmo Marconi?
Nonsense, I say. These men didn't solve the "big problems" of their era -- they didn't attack issues that were popular in the public consciousness. They were really much more similar to today's SV entrepreneurs: they created markets, rather than entering them.
We never needed light-bulbs, and we never needed smartphones. We never needed the telephone, or Google. We never needed radio, and we didn't need Netscape either. We never needed cars, nor did we need Paypal, Bitcoin and Square.
The mistake is that thinking the first inventions are somehow more fundamental, just because they're older. That's nonsense.
Big Problems, to the extent that they are ever solved, are almost always solved collaboratively, by coalitions of scientists and engineers, involving both the public and private sector, and the solution rarely appears by flipping a switch. Norman Borlaug wasn't an entrepreneur and he didn't work alone. Ditto Edward Jenner, James Watt, you name 'em, we got 'em. These men were not entrepreneurs (though Watt worked with one).
>And yet, veterans who’ve returned from Afghanistan and Iraq have to wait roughly 270 days (up to 600 in New York and California) to receive the help — medical, moral, financial – which they urgently need, to which they are honorably entitled, after having fought our battles overseas.
>Technology, indeed, is solving the right problems.
Why on Earth would we expect technology to solve political problems?
>Meet the people who have the indignity of being over 50 and finding themselves suddenly jobless. These are the Untouchables of the new American workforce: 3+ decades of employment and experience have disqualified them from ever seeing a regular salary again. Once upon a time, some modicum of employer noblesse oblige would have ensured that loyal older workers be retained or at the very least retrained, MBA advice be damned. But, “A bas les vieux!” the fancy consultants cried, and out went those who were ‘no longer fresh.’ As Taylor Swift would put it, corporate America and the Boomer worker “are never ever getting back together.” Instead bring in the young, the childless, the tech-savvy here in America, and the underpaid and quasi-indentured abroad willing to work for slightly north of nothing in the kinds of conditions we abolished in the 19th century.
Economics: the only field you don't have to study to rant about on mit.edu.
>“What do we have to do with any of this? The unexotic underclass has to pull itself up by its own bootstraps! Let them learn to code and build their own startups! What we need are more ex-convicts turned entrepreneurs, single mothers turned programmers, veterans turned venture capitalists!
You don't have any numbers, you don't have any sources, you don't have any data. You think my only objection is that it's not my responsibility? My objection is that it's insane.
Khan Academy, though, looking at America's education system. Fitbit, targeting the number one cause of preventable death in the developed world. That e-cigarette guy from China, taking on number two. David Nichols and the psychedelic renaissance (not a company but it can't be), bringing MDMA to veterans. Theranos, making blood tests affordable for the 80% of Americans who make five figures or fewer. Prepolarizing MRI. Various on-demand laundry and cooking servies. It's out there. In some cases it doesn't matter: single mothers'[1] problem isn't that they aren't targeted by startups, it's that they don't have any money!
And you know what? It's fucking hard. These companies don't take off like bottle rockets the way Dropbox and Google did. Bringing products to disconnected people in disparate areas who don't like you is a lot harder than selling restaurant recommendations to the other nerds on the train.
[1]: you might be able to make an app so that single parents can find each other and trade-off childcare, but it probably exists already anyway. I'm not exactly Nostradamus, here.
I'm most sympathetic to your argument, but one part is factually incorrect. There are a few examples of people working on the great problems of the day and succeeding, among them:
Fritz Haber and Carl Bosch, who developed the method to produce ammonia for fertilizer still essential today, probably essential for feeding our billions.
And the Wright Brothers, of course.
That said, under appreciated problems are surely worth working on.
This has been alluded to in other comments, but without any data. The "unexotic underclass" has virtually no money to spend compared to the upper classes. The bottom 40% in the US has only 0.2% of the wealth!
Do you know how many lottery tickets are purchased by the "unexotic underclass"? There are those with "virtually no money to spend," to be sure, but there are plenty of working poor with a combined large amount of money passing through their hands that never generates wealth because it is immediately spent, both to meet needs (often inefficiently), and to meet wants (often with little long-term thinking, which for various reasons can be entirely rational in given circumstances). The opportunities lie in trying to identify improvements in that cashflow (which is hard to do if you are so disconnected from the "underclass" that you can't even fathom why someone would spend so much on lottery tickets, and thus how you would ever convince them to spend money on your service instead...)
The bottom 20% makes around 4% of the total income, so I grant that income is not as lopsided as wealth. And sure, you could potentially build a successful business targeting that. But it certainly doesn't seem like nearly as attractive a demographic to target as the other 80% with 96% of the cash flow.
For what it's worth, I favor a greater amount of wealth redistribution than we currently have not only because I think it's the morally right thing to do, but also because I think it would result in greater overall spending. (e.g. people who have a lot of surplus money now are less likely to spend those incremental savings than those who need more money to live comfortably now.)
Why not create a "food stamp" delivery service? Hire ex-cons for delivery & older "unemployable" graduates to manage the whole thing. Deliver in the evening after the parent(s) are back from work.
Better yet, try to change the system to allow EBTs to be used to delivery ready-made meals...
SNAP in many cases isn't enough for the whole month already. Adding restaurant and delivery fees into the mix would really just cause more problems for people running short and going hungry at the tail end of the month.
Deeply left of my politics, but I like the market orientation of the solution. Very well written to get me to agree with a point of view I wasn't inclined to like. :-)
> "It is not about class, it is about solving a want or a need in a sustainable way."
Of course it's about class. YC (and everyone else in this industry) is very good at solving a want that they understand, and very bad at solving wants they don't understand.
And our industry is consisted almost exclusively of upper-middle class white urban men. In fact, this demographic is even more prominent in the entrepreneur class than it is in the general tech worker population.
So quelle surprise when the only wants we seem capable of solving are the wants of upper-middle class white urban men: instant deliver-anything, means of private transport, outsourcing household chores, newfangled ways to display conspicuous consumption...
All progress is aimed at the rich. The first people with light bulbs were rich, the first people with indoor plumbing were rich, the first people with cell phones and automobiles were rich, etc, etc.
It's not nearly as much fun to solve poor people's problems since often the solutions already exist; they just can't afford or otherwise access them.
Well no, for quite a few inventions, the first creation is a toy and the important inventions and actual progress are those that make it cheap enough.
The first cars didn't change the world. The first cheap cars did - Ford deserves more credit than Benz's Patentwagen.
The invention of lightbulbs at early 19th century wasn't a significant progress and didn't solve any significant problems - the cheap lightbulbs that came a generation later, involving Edison among others, did that.
Making stuff possible is just a tiny part of the total solution - making it cheap is what matters. If "solutions already exist" but aren't affordable, then those are not solutions - those are unsuccessful attempts at solving the real problem; and the world is still waiting for a proper solution of doing X in a way that scales efficiently and becomes affordable.
Oh what tosh. Most of brand new inventions might be aimed at the rich. After that, most iterative improvement is aimed at making the invention cheaper, more reliable, and easier to manufacture - i.e., gradually more accessible to poor people. What separates a Benz Patent Motorwagen from a Civic today if not a whole ton of progress?
You're right, I used the wrong word. Doesn't change the fact that working on something revolutionary is a lot more fun than working on something iterative. It's also more accessible to individual entrepreneurs whereas iterative progress is more of a bigco domain.
> Doesn't change the fact that working on something revolutionary is a lot more fun than working on something iterative. It's also more accessible to individual entrepreneurs whereas iterative progress is more of a bigco domain.
Must be news to all these tinkerers playing with and improving their toy drones and people contributing to Linux rather than writing their own kernel
If it's true that 1 in 10 Americans are war veterans, they could literally revolt. They probably have the numbers and potential support from the military needed to succeed.
Because the VA, and by extension the federal government and the American people, treat them like absolute garbage, and this is not going to get fixed in the current system.
Thanks for reminding folks about the Bonus Army. This was a sad day in U.S. history.
But remember the Bonus Army did not revolt. It was, I believe, a peaceful protest. The firepower came from the other side, when Hoover and MacArthur decided to send in the regular army (so much for the First Amendment right to petition the government for a redress of grievances). I wonder how U.S. history would have turned out differently if the Bonus Army veterans actually had been armed and defended themselves against troops that were attacking them and their families with bayonets...
Nowadays, especially after the Gun Control Act of 1968 and additional restrictions under Bush 1.0, the the disparity in armament between civilian vs. military is a bit greater.
the problem is that fixing problems to make the world a better place is not profitable to investors in our system. our system needs fixing.
the important problems won't be solved by products coming out of tech start ups but by service design applied to our dysfunctional social and political systems. imho.
i'd love to ponder and write more about how SD can fix things but i am late for my job designing apps for the privileged class. :-\
But there’s only so much Washington can do to help out, what with government
penniless and gridlocked, and its elected officials occupying a caste of
selfishness, cowardice and spite, heretofore unseen in American politics.
This is pure both-sides-do-it bullshit.
In reality, one side recently passed an amazing transformation of health care to attempt to pull the united states -- still the world's richest large country -- up to the level of any civilized first world country. That is, we've moved towards providing healthcare to all americans as a birthright. One party was unanimously opposed, either for venal reasons, or outright stupidity (Sarah Palin's death panels, and thank's John McCain for that!), or evil (all Republican governors in the south). Somehow Europe, Canada, Japan, etc, all make health care work but we can't.
We could also discuss the ever declining (real) minimum wage, which had it kept up with real income growth in the US economy would be in the $20 dollar range or so.
One side of the government -- and no, the Dems didn't cover themselves in glory, but who exactly decided to spend over a TRILLION dollars on a war in Iraq for reasons that are still up for question, on the basis of flimsy and nonsensical evidence funneled through willing accomplices in the media, against all evidence from people with a history of correctness that both (1) there where no WMDs, and (2) invading Iraq would upset the jenga tower that is iraq and the middle east?
Any article that can describe largely political problems without once mentioning republicans or putting the blame for much of this squarely on them is worthless and frankly part of the problem.
This is good post. I suppose you're prepared for downvotes? ;-)
>Somehow Europe, Canada, Japan, etc, all make health care work but we can't.
The thing is, that's mostly accurate. Those places all have governments that still occasionally get out of bed in the morning and serve the interests of their citizens. America does not. Now, the reason it doesn't in the first place, is mostly due to the actions of the same sort of assholes who would oppose universal healthcare on ideological grounds. So it's rather chicken/egg to be sure, but the fact remains. As P.J. O'Rourke wrote in one of his more self-aware moments (when he was younger, basically), "Republicans insist that government doesn't work, and then they get elected and prove it".
So on the one hand, universal health care is a good thing and Americans should have it. On the other hand, the US government is, at best, barely capable of pulling it off. You praise the ACA, but surely you realize what a piece of shit program it implements? Compared to, as above, Europe, Canada, Japan, et al? It's better than the regime that came before it, probably, but only just barely. It does little to address spiraling costs, for example, which is an enormous problem.
>Somehow Europe, Canada, Japan, etc, all make health care work but we can't.
The countries you mentioned largely have outsourced their national defence concerns to the United States, allowing them to have defence budgets of <10% of spending while the USA's defence spending stands at 17% of spending. That is not irrelevant to this discussion.
Amount of money going to healthcare is actually NOT relevant to this discussion - all the countries are spending less on healthcare than USA, none of those health advantages are caused by being able to afford healthcare because of some or other reason reason.
The call for health reforms isn't "give medicine more money", but "fix the system so that you stop getting shit priced as gold".
Worth noting, however, that Europe, Canada, and the ROW get to freeload on innovative on-patent medicines whose R&D is essentially supported by higher American drug prices.
What does national defense cost have to do with it?
France, ranked consistently as one of the countries with the best health-care, spends 12% vs the US (ranked waaay lower) spending 18%. Several other countries have even better quality-to-cost ratios (Japan, etc)
>What does national defense cost have to do with it?
Uh, more headroom for entitlement programs in general?
I see France at 10%, not 12%,http://fr.wikipedia.org/wiki/Budget_de_l'État_français
but even at the latter number, that 6% difference (280 bn) would pay for a quarter of Medicare+Medicaid. With Medicaid costs set to expand by 12% under Obamacare next year (by 50 bn) eventually leading to 50% reduction in uninsured by 2024, having that kind of room in the budget would easily allow for universal coverage.
I cede the point, made above, that dollar-for-dollar US healthcare spending is less effective, but dispute that health care reform is entirely about making it more efficient. Decreasing the amount of uninsured has been at least as important an issue in the debate.
The only sustainable way to insure everyone is to lower the cost of healthcare. My insurance premium went up 15% since Obamacare was introduced (as opposed to "mere" 11% in previous years). I don;t know what I am going to do next year.
This flies in the face of the claims that "if everyone pays in, it will be cheaper for everyone". Not happening.
I agree that having universal coverage is great (and long overdue), but there are much better ways of achieving it.
As with most issues, there are costs and benefits with the minimum wage. It appears that Norway, Austria and Germany, amongst others, do not see a balance in favor of the benefits. Unsurprisingly their unemployment rates are low. Were I useless to an employer (as once I was) I would rather work for some wage (as I did) rather than exist (and get used to existing) on handouts from the wealth created by other tax payers' work.
> It appears that Norway, Austria and Germany, amongst others, do not see a balance in favor of the benefits.
Germany just approved a minimum wage.
> Unsurprisingly their unemployment rates are low.
I have never bought this argument. A business hires employees because it has some amount of work it needs to be done. The amount of work to be done doesn't change as a function of how much workers are paid.
Arguing that the minimum wage causes meaningful increase in unemployment is just as silly as arguing that paying CEOs huge salaries does.
You can argue that a minimum wage makes things more expensive: that's likely true, but I'm okay with that.
In any case, if a business requires paying its employees pitiful wages in order to be profitable, that business is unsustainable and should fail.
> I would rather work for some wage (as I did) rather than exist (and get used to existing) on handouts from the wealth created by other tax payers' work.
When wages fall so low that workers can't reasonably afford to live, they might as well be unemployed: there is no functional difference.
I agree though that we as taxpayers should not be required to subsidize corporations unwilling to pay employees livable wages. The solution is a higher minimum wage.
The amount of work to be done doesn't change as a function of how much workers are paid.
Whether the work can be profitably done certainly can change.
Arguing that the minimum wage causes meaningful increase in unemployment is just as silly as arguing that paying CEOs huge salaries does.
Could we make it $50/hour with no employment effects?
You can argue that a minimum wage makes things more expensive: that's likely true, but I'm okay with that.
Which means the minimum wage is indirect welfare that redistributes money to low-skilled workers by taking it from some combination of business owners, employees, and customers. That's strictly less efficient than just giving low-income workers extra money, especially since many of the customers now facing higher prices are themselves poor.
I agree though that we as taxpayers should not be required to subsidize corporations unwilling to pay employees livable wages.
This has never made any sense to me. If Walmart pays a cashier $10/hour, they're helping him more than you are, but somehow they're the bad guy.
> Could we make it $50/hour with no employment effects?
No, of course not. Nobody is asking for that.
> Which means the minimum wage is indirect welfare that redistributes money to low-skilled workers by taking it from some combination of business owners, employees, and customers.
That's a stretch... If raising the minimum wage caused a dollar-for-dollar increase in the price of everything then yes, but that would only occur in a business who's only major expense is unskilled labor, and even there it wouldn't be equal to the rise in wage. And for a low-income person, housing is a major expense that has a negligible labor component built into it.
> If Walmart pays a cashier $10/hour, they're helping him more than you are, but somehow they're the bad guy.
If people at Wal-Mart work and don't have enough money, and then they get welfare in order to make ends meet, that's you and I subsidizing Wal-Mart. I would rather that extra money for the worker come out of Wal-Mart's profits than your and my taxes.
There is a clear link between minimum wage and unemployment.
We already have a bunch of automation technologies where machines and software can do a better job than a low-wage person can, simply the people currently are cheaper even at USA minimum wage.
Once the minimum wage rises above that cost (or the tech drops in price), those jobs will be gone for good.
It's not an entirely different problem, the point I'm trying to make is that this single factor causes a clear link between minimum wage and unemployment.
Currently, it makes sense for a poor person somewhere to make a living by sewing sneakers - because that person is cheap. It makes sense for people to work on data entry, it makes sense for people to flip burgers, it makes sense to do a lot of things - but only while the people remain so cheap.
There are many jobs already that are impractical to do in USA, because of the minimum wage - they get done either by automation or by someone in much poorer countries, but never again by a US worker. If minimum wage goes from $10 to $15, then more types of jobs will join that.
The 'entirely different' problem arrives when the true market rate of low skilled labor becomes negative - i.e., an automated process generally costs less than a manual process even if the workers would work for free or for basic shelter/sustenance (order of magnitude less than first world would call a livable wage). I don't want this, but it seems rather likely that it will happen within my lifetime.
> The amount of work to be done doesn't change as a function of how much workers are paid.
It probably does. But at least the number of business do change with salaries; I don't expect the relation to be monotonic, but it almost certainly have domains of negative rate of change.
For example, while I share a certain sense of frustration that SV seems to spend a disproportionate amount of resources on mobifotosocialgames, smartphones and their downmarket progeny are an enormous quality-of-life improvement for broader America. There's virtually nothing a cash-poor-responsibility-rich person needs to do that having a smartphone does not make them better at.
Commute to work? Apply for benefits? Schedule appointments with doctors? Successfully keep those appointments? Keep tabs on kids while working/errands? A smart phone makes you better.
As an entrepreneur who makes stuff for people who are not the usual suspects, the challenges to doing this are numerous and largely not conducive to the VC-funded trajectory. You have to convince people to pay you money for your services, you have to be able to service those customers profitably, and the customers are disproportionately pathological. Most of the software they consume is getting written by AppAmaGooFaceSoft because they can underwrite it with their massive monopoly rents, subsidize the cost straight down to zero, and deal with the CS headaches attendant in serving poor people by sending them to a call tree / web app backended by a Markov chain backended by /dev/null.
There's also a bit of "every problem has a software solution" enthusiasm which is, well, a bit overstated. (Sometimes this isn't stated outright, but when you expect to do something meaningful on e.g. $500k in an angel round, you implicitly expect to do something meaningful 100% in software, because $500k isn't even enough to launch a single McDonalds in the real world.)
Many problems have an 80% software solution attached to a 20% "interface with the real world" mandatory bit. The marginal cost of that last bit, though, is hundreds, thousands, or tens of thousands of dollars per client served. Or it has highly non-trivial political/regulatory barriers to entry, like "Convince an incompetent, intransigent, and politically invulnerable agency to disemploy half their workforce, who are by the way mostly veterans, whose main professional competence is doing an important thing slowly, poorly, and expensively."