Can Silicon Valley Really Change the World?

The FrontlineSMS:Medic team, one of the most disruptive groups of entrepreneurs in the world, meets for the first time in person after months of online meetings. Via Daniel Bachhuber

On Monday, Mint.com announced that it had sold itself to Intuit for $170 million. While numbers like those make most of us who work with nonprofits blanch, the relatively low number for one of the most promising young tech companies, the fact that it sold to the rival it was trying to take down, and the less than enthralling batch of startups that took the stage at TechCrunch50 on Monday and Tuesday have some in the web tech world whether today's generation of startups have lost some of their disruptive swagger. The real question, though, is whether Silicon Valley is only imagining that it's in the business of "changing the world."

The Mint announcement came in the form of a blog post by CEO Aaron Patzer that made it seem like a fairy tale: a company that started in someone's kitchen, millions of happy users, $0 to $170 million in three years. This was the quintessential Silicon Valley story. Right?

Wrong, at least according to folks like tech journalist Sarah Lacy and 37 Signals founder Jason Fried. Fried ranted in a blog post titled, "The Next Generation Bends Over." His basic criticism is that, while $170 mil is a great pay day, that's not what it's about. What it's about is building solutions that are fundamentally better than what the old guy offered. In his estimation, Mint had the wind in it's sails and Intuit was running scared, but by selling, they lost it:

Mint was a key leader of the next generation of game changers. And now it’s property of Intuit — the poster-child for the last generation. What a loss. Is that the best the next generation can do? Become part of the old generation? How about kicking the shit out of the old guys? What ever happened to that?

Lacy riffed on similar themes, but kicked up the criticsm beyond Mint. In her post, "Memo to Start-ups: You're Supposed to Be Changing the World, Remember?," Lacy railed that while $100 million exits were great, what made Silicon Valley a place unto itself was the idea of a bunch of kids in a garage building something that made everything else that came before it fundamentally obsolete. Her point was that if we start to have a group of people emulating Mint (as opposed to emulating Google), there's going to be less and less disruptive innovation. As she put it, "A start-up’s only edge is that it’s not built into legacy businesses and preconceived notions and can do something, well, crazy."

So what was behind the sale of Mint? Fried speculated it was pressure from a venture investor in the company, but in the comments, Union Squares Ventures Partner and well-known blogger Fred Wilson speculated that something different might be at work. He wrote "This smells to me of a young founder facing the prospect of making enough money at an early age that their life will be changed forever and not being able to resist it."

As for the rest of the group of startups at TechCrunch50? After trying my best to write about the most interesting ones, I have to agree with Lacy's (and it seems like most of their expert's) analysis that it was a pretty timid group of "10% better" entrepreneurs. Certainly it was hard for me to find many that actually fit into a "world changing" category.

Which actually brings up another, perhaps more important point, which is the occasionally deluded self-intoxication that the Valley has with the notion of what it means to "change the world." I genuinely believe that Lacy, who has spent much of the last year globe trotting to see how the developing world is entering the tech startup world, gets it, but she uses the unfortunate example of Zappos Tony Hsieh as a world changer.

All due respect to Zappos, a better way to buy shoes is not the same as changing the world. It's a great company, and relative to their field, they deserve the money they got in their recent sale to Amazon. But an easier way to buy stuff - particularly stuff that is not necessarily essential - is simply not world changing. If anything, the most transformational part of Zappos may be the way they evangelize their corporate culture.

But this hyperbole is why the nonprofit sector can have such a hard time interacting with the corporate world. It's hard to spent time with groups like Samasource that are trying to fundamentally shift the paradigm of outsourcing to create real growth and development opportunities for the developing world, or the Acumen Fund that is investing in local market solutions to water distribution, and then to be told that easier, faster, funner consumption of stuff is in the same ballpark. It's not even the same sport.

Or at least, classically, it hasn't been. I have absolutely no animosity towards the for profit world, or the profit motive driving companies. If I was Aaron Patzer and I was staring down the barrel of a half decade to beat out the current champion of finance software or $10+ million right now, it'd be hard for me to turn the money down. I don't begrudge them at all. Nor, by the way, do I begrudge Zappos for creating the most kickass shoe buying experience on the planet. I think it's an awesome company. And I also totally agree that companies like Google and Facebook are weaving a social infrastructure through which the world can change in totally new ways.

But if people are really, really interested in where the next generation of truly disruptive innovation is going to come from, it's not Silicon Valley. At least not this iteration. If people really want to see the next generation of disruptive innovators, they need to look at the thousands and thousands of undergraduates all around the country who are taking advantage of new opportunities to get abroad. They need to look at the students who are coming face to face with poverty, injustice, and all of the warts of an unfair world, and are returning to restless nights where they realize they can't do nothing.

It's these students - and after 7 years at Northwestern University I know just how their numbers are increasing - who have the intensity, the passion, and the absolute total and utter unwillingness to not succeed that will help them create the organizations, and yes, products, that will really change the world.

Some of them will come down the pipeline of Silicon Valley; hell, that's why I'm here. I'm incredibly bully on the potential to use the new architecture of the social web to expand access to information, democracy, participation, and creativity. But their dreams will not just center on the big pay-day - at least not alone. Instead, they will be looking for the moment when everyone in India has access to clean water, or every health worker in Africa can automatically call up their patients health records via SMS, or some other moment in which, because of what they've helped build, the location on a person's birth certificate no longer determines their destiny.

And they'll probably figure out how to make money along the way. Get your checkbooks out.