
The Unexotic Underclass - spitfire
http://miter.mit.edu/the-unexotic-underclass/
======
patio11
I like parts of this article more than others.

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."

~~~
incision
_> '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.

~~~
julian_t
> 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.

~~~
narrator
These days you can buy no-name android tablets from Walmart for $44. For
example: [http://www.walmart.com/ip/Ematic-7-Tablet-with-4GB-Memory-
an...](http://www.walmart.com/ip/Ematic-7-Tablet-with-4GB-Memory-and-Google-
Mobile-Services/23350692)

That's cheap enough that there's no reason for a poor person NOT to have one.

~~~
rmc
For some $44 is a lot.

Jack Monroe was poor and a blogger. She wrote a powerful piece about it once:
( [http://agirlcalledjack.com/2012/07/30/hunger-
hurts/](http://agirlcalledjack.com/2012/07/30/hunger-hurts/) ):

> 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.

These are the people who can't afford $44.

------
burgers
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?

~~~
facepalm
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.

~~~
jonrimmer
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.

~~~
facepalm
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).

~~~
garrettgrimsley
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.

------
tinco
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)?

~~~
wolfgke
> I imagine them needing to spend money on food,

accepted

> education,

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?

~~~
pjc50
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.

~~~
happyscrappy
PBS alone is reason enough not to sell your TV.

------
bokonist
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.

~~~
idlewords
Your assume that poor people are poor because they lack the savvy to be born
into the upper middle class. That's a common misconception.

Poor people are actually poor because they don't have any money.

The easiest way to make money is not by tricking the poor, but by tricking the
rich (they're the ones who have most of it, after all).

Unfortunately, that same money allows even the dumbest rich people to
aggressively defend their interests against savvy people like you.

While no one gives fuck all about the poor.

~~~
rattray
> no one gives fuck all about the poor.

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.

~~~
IkmoIkmo
> 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.

~~~
km3k
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.

~~~
IkmoIkmo
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:

[http://www.givingwhatwecan.org/research/theory-behind-
effect...](http://www.givingwhatwecan.org/research/theory-behind-effective-
giving)

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.

~~~
lilsunnybee
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.

[http://www.kivafriends.org/index.php?topic=3403.190](http://www.kivafriends.org/index.php?topic=3403.190)

This pretty recent article though makes it sound like it's still a big
problem.

[http://www.nextbillion.net/m/bp.aspx?b=3726](http://www.nextbillion.net/m/bp.aspx?b=3726)

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.

~~~
IkmoIkmo
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)

[http://www.grameenfoundation.org/blog/david-roodman-does-
his...](http://www.grameenfoundation.org/blog/david-roodman-does-his-due-
diligence-and-gets-it-mostly-right#.VAhz1MXm7QA)

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:

[http://www.npr.org/2014/07/30/336361778/bolivia-makes-
child-...](http://www.npr.org/2014/07/30/336361778/bolivia-makes-child-labor-
legal-in-an-attempt-to-make-it-safer)

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:

[http://www.nextbillion.net/blogpost.aspx?blogid=3731](http://www.nextbillion.net/blogpost.aspx?blogid=3731)

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.

------
jbackus
> 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](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.

~~~
lotsofpulp
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.

------
disjointrevelry
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.

~~~
jrochkind1
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.

~~~
corford
Don't normally do "pedant" posts but this is the second time I've seen it in
this thread. The author is a she not a he :)

~~~
jrochkind1
thank you! Will correct in my post with gender neutral wording, which I should
have used from the start.

------
declan
>what with government penniless and gridlocked

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.

~~~
onion2k
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.

~~~
refurb
But the gov't _creates_ the budget. They _choose_ what to spend that $20 on.

~~~
marcosdumay
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.

------
3pt14159
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.

~~~
aianus
> Show me the path to get people off of sugar diets.

[http://www.soylent.me/](http://www.soylent.me/)

I think we'll start seeing a difference when the economics improve making it a
lot cheaper than fast food.

~~~
ibrahima
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.

~~~
rmc
_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.

------
callmeed
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.

~~~
Nursie
>> 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.

------
7Figures2Commas
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.

~~~
idlewords
I would expand your argument to say there are more effective ways to serve the
underclass than entrepreneurship.

------
firstOrder
> 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...](http://www.frontpagemag.com/2014/dgreenfield/cbs-colbert-and-
contempt-for-america/) ). 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.

~~~
dasil003
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.

~~~
ivv
>>"I'm not fool enough to believe I can solve (eg) poor single mothers'
problems in this country with an app."

I've recently done research specifically on this topic, and here are three of
single moms' many problems that probably could be solved with an app:

\- Training for a job

\- Reliable (as in timely and as in not about to fall apart) transportation to
a job

\- Childcare so that she can attend a job

~~~
VLM
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.

~~~
ivv
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.

------
tsunamifury
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.

~~~
exelius
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?

~~~
alasdair_
>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.

~~~
mjevans
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.

------
Afforess
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.

~~~
johngalt
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.

~~~
chillingeffect
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.

------
ilaksh
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.

------
gyardley
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.'

------
mbesto
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._

------
arh68
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.

------
rayiner
I like the cut of the author's jib.

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.

------
DanielBMarkham
Oh boy. What a mess.

So there ARE two sides here.

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.

------
BrandonMarc
The previous discussion of this article is actually quite fascinating, itself
...

[https://news.ycombinator.com/item?id=5782704](https://news.ycombinator.com/item?id=5782704)

------
nickthemagicman
There's a lot of people interested in helping the poor. There's humongous
social and political barriers that make it almost impossible.

Ideas I have:

-Make a centralized site for homeless people to find resources. At the moment they're all scattered.

-Make an easy to use food stamp app.

-Ride sharing apps

-Apps showing where buses are and how far away they are so poor people aren't just sitting at the bus stop waiting.

-and there's a lot more.

However a quick look at all these requires technological literacy by the poor,
governmental cooperation, or both.

It's not just an easy tech problem to solve. It's a social problem.

------
vinceguidry
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.

~~~
TheOtherHobbes
I'm impressed by the number of commenters who didn't realise the author is a
woman.

>There are no end of problems to solve in the world, but only a very few of
them are profitably solved.

They're (not) profitably solved because the economic and political systems
have been designed to make them unprofitable.

The basic problem is a feedback system which rewards certain activities as
'profitable' and punishes others as 'unprofitable'.

Nothing about this is impossible to change. It's a political choice, not a
scientific law.

~~~
vinceguidry
> 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.

~~~
TheOtherHobbes
>That's the basic reason why we have markets.

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.

------
lotsofmangos
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.

------
mahyarm
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?

------
WalterSear
It's a lot easier to get money out of people who have some to spare.

And people say Big Problem when they are embaressed to admit that it's Big
Money that they are really after, when you get down to it.

That said, I know quite a few people trying to solve big problems in SF.
[http://www.handup.us](http://www.handup.us) for example.

------
scythe
>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.

~~~
tragomaskhalos
We _did_ need cars - the problem of horseshit in cities was becoming
unmanageable. But the rest of your point is well taken.

~~~
akgerber
That, too, was as much a political problem solved politically; here is
Harper's illustrating the effect of NYC getting a well-run Sanitation
Department: [http://www.collectorsweekly.com/articles/wp-
content/uploads/...](http://www.collectorsweekly.com/articles/wp-
content/uploads/2013/06/harpers-june-22-1895.jpg) from:
[http://www.collectorsweekly.com/articles/when-new-yorkers-
li...](http://www.collectorsweekly.com/articles/when-new-yorkers-lived-knee-
deep-in-trash/)

------
gphil
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!

Source:
[https://en.wikipedia.org/wiki/Distribution_of_wealth#mediavi...](https://en.wikipedia.org/wiki/Distribution_of_wealth#mediaviewer/File:U.S._Distribution_of_Wealth,_2007.jpg)

~~~
joshuahedlund
Wealth != income.

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...)

~~~
gphil
According to data pulled from here:

[http://www.wealthandwant.com/issues/income/income_distributi...](http://www.wealthandwant.com/issues/income/income_distribution.html)
(Summary Table 1. Effective Federal Tax Rates, 2005)

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.)

------
jonnycowboy
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...

~~~
lilsunnybee
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.

------
mb2100
Surprised that nobody has mentioned Ushahidi yet, seems like they are doing
great work in Kenya:
[http://www.ushahidi.com/mission/](http://www.ushahidi.com/mission/)

------
mathattack
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. :-)

------
eddyparkinson
"Make something people want." \- is on Y-combinator t-shirts. It is not about
class, it is about solving a want or a need in a sustainable way.

~~~
potatolicious
> _" 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...

Deliberately or not, this is _all_ about class.

~~~
aianus
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.

~~~
jarek
> All progress is aimed at the rich

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?

~~~
aianus
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.

~~~
jarek
> 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

------
gp2gp
Ugh.

Just see...

[http://bt.tn/](http://bt.tn/)

------
javert
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.

Wouldn't be the first time:
[http://en.wikipedia.org/wiki/Bonus_Army](http://en.wikipedia.org/wiki/Bonus_Army)

~~~
declan
>Wouldn't be the first time:
[http://en.wikipedia.org/wiki/Bonus_Army](http://en.wikipedia.org/wiki/Bonus_Army)

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.

------
carsonreinke
`There is life, believe me, outside of NY, Cambridge, Chicago, Atlanta,
Austin, L.A. and San Fran.`

------
squidmccactus
Why is this posted to HackerNews? This isn't innovative.

------
bettyx1138
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. :-\

------
x0x0
fta:

    
    
       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.

~~~
jamesash
>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.

~~~
PeterisP
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".

~~~
jamesash
Point taken on lower efficiency of US health care spending.

[http://www.vox.com/2014/9/2/6089693/health-care-facts-
whats-...](http://www.vox.com/2014/9/2/6089693/health-care-facts-whats-wrong-
american-insurance)

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.

