Since Yo announced its $1M raise last month, there has been no shortage of commentary weighing in on whether Yo - an app that does nothing more than send a “Yo” push notification to one’s friends - deserves a dollar of investor money.

But the real story, in my opinion, is how Yo indicates that, for better or worse, today’s entrepreneurs are this generation’s most influential artists.

Somewhere between Google and Yo, startups, and our speculation around them, became less about technical ability or business acumen and more about creative output.

Collectively, we’re captivated by the potential of technology, a place to let one’s imagination run wild and envision the world as it should be rather than as it is. It’s as easy now to turn those ideas into code as it is to put a paintbrush to paper.

Hackers have known this for years, but now that the bar for software development has been lowered, it’s easier for anyone to tinker with code. And so the creative minds have flocked to tech, to gently test and probe, to throw ideas out there and see what sticks.

The exploding appeal of entrepreneurship in the wake of the 2008 recession lies in the relief: a place to think creatively, live freely, and influence society…not to mention a semblance of a real job to write home about.

Location influences the entrepreneur, just as Paris influenced The Lost Generation of writers like Hemingway and Fitzgerald in the 1920s. I find myself sending relevant startups to founder friends not as competitors, but as “inspiration”.

Most importantly, startups have had an undeniable influence on culture and conversation, as the public relishes in contemplating, consuming and dissecting them. Founders, on their part, delight in pushing the boundaries of our comfort zone. The heated debate over whether Yo is a joke or the next billion-dollar idea is not unlike the public reaction to post-WWI Dadaism, whose avant-garde “anti-art” approach challenged what we considered to be an acceptable art form and paved the way for other experimental movements such as surrealism, modernism and post-modernism.

In all the hand-waving about tech bubbles and overhyped valuations, I can’t help but smile. We’re so focused on making history for technology that we forget we’re making history for culture, too.

Is Yo worth a $1M investment? I don’t know. Was Marcel Duchamp’s “Fountain” worth $1.7M?

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(Source: Wikipedia)

There have been a couple of Product Hunt data projects floating around the internet lately. Leo’s analysis looked at trends in product names and taglines. Mattermark’s analysis looked at the correlation between Product Hunt and fundraising. And Artiom’s project visualized metrics around products and contributors.

I wanted to look at who was posting and what they were posting. There was just one problem: there are no tags for products posted to Product Hunt.

According to Mattermark, over a third of products on Product Hunt aren’t listed on places like Crunchbase or AngelList (and that’s after cleaning the data to only look at startups), so tapping into other APIs was out.

I could have outsourced the task to a VA, but after tagging a few to test out my methodology, I realized picking just one category per product was more art than science, and I didn’t feel comfortable outsourcing.

So, I did it myself. I tagged 1,023 products on Product Hunt, posted between 5/14 and 6/18 this year. (I only looked at products in this date range because of a 5/13 algorithm change that compensated for time-of-day affecting upvotes). With that data in hand, here’s a look at the categories and contributors of Product Hunt.

(Don’t want to read the whole post? See the tl;dr of observations at the bottom.)

Who’s Posting, and Does It Matter?

Firstly, I wanted to get a better sense of Product Hunt’s contributors. Only 1-2% of Product Hunt’s 25K+ members can post. I looked at: A) who was posting and how often, and B) whether a contributor’s reputation correlated to a product’s popularity on the site.

In my sample of 1,023 products, there were 345 contributors. I don’t know the exact number of total contributors out there, but assuming it’s between 250-500, this probably represents most of them.

Just over half (55%) only posted a product once during this period. The top 10% most frequent contributors (34 people total) had posted 6 or more hunts, but they had a decent spread. Jack Smith, the #1 contributor, posted 62 products in this period. Geoffrey Weg, at #2, posted 36.

The top 10% most frequent contributors posted just under half (48%) of all products, which actually makes for a pretty good spread among all contributors, if you consider the 1% community rule.

I also pulled everyone’s gender (via Twitter) out of curiosity. 91% of contributors are male; just 9% are female. I was a little surprised at the disparity. I’m curious to know how the gender of contributors compares to the gender of the Product Hunt community at large.

Wednesday is the most popular day to post, followed by Tuesday and Thursday.

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I didn’t find any correlation between a contributor’s internal reputation (measured by frequency of posts) and a product’s upvotes or comments. The products with the most votes and comments came from contributors who had only posted once or twice. I also didn’t find any correlation between a contributor’s external reputation (measured by number of Twitter followers) and the popularity of the products they posted.

In other words, it’s possible to post something just once that turns out to be popular. How well the product is received probably has more to do with the product itself.

Leo has already covered commonalities among popular products’ names and taglines, so let’s take a look at product types.

What Types of Products Do People Post?

I broke up the products into 76 categories, using AngelList’s market tags as a gut check. Here are the most frequently-hunted product categories:

  1. Developer Tools

  2. Design

  3. Product Updates

  4. Hardware

  5. Food and Beverage

  6. Music

  7. Sales and Marketing

  8. Photography

  9. Utilities

  10. Entertainment (note: this means “primarily for entertainment purposes”, not “entertainment industry”)

  11. Sports (skewed by the times - over half of these had to do with the World Cup. Fun fact: golf is popular among product hunters!)

  12. Personal Productivity 

The top 12 categories made up just over one-third (35%) of all products posted during this period.

I’ll refrain from posting the entire list of categories here, but these categories also deserve a shout-out:

  • Kids (#14). There are quite a few posted products geared toward kids and/or parents.

  • Collaboration (#17). Products that help teams collaborate better (mostly project management software). Originally tagged as SaaS, but there were so many that they became their own category.

  • Analytics (#13) and Data (#16). Includes data visualization. The popularity of these categories might speak to the hacker nature of the Product Hunt community (more on that in a bit).

  • Social Media (#15) and Messaging (#20).

  • Health and Wellness (#18). I was surprised this wasn’t higher, actually, considering Food and Beverage is at #5.

And here are a couple on the bottom of the list that might surprise you: 

  • Advertising (#68). There are a lot of advertising companies out there, but they’re not commonly found on Product Hunt.

  • Reviews & Recommendations (#76). This one bottomed out the list.

Which Categories Are Most Likely to Get Upvoted?

The categories above represent the types of products that are most likely to get posted to Product Hunt. But which types of products are getting votes?

I wanted to correlate the two, but the number of products per category varies so widely that I couldn’t do it without invoking the wrath of the Statistics Gods. For example, Q&A has the most votes, but there are only 4 products in that category, whereas Developer Tools has 55 products in its category. It doesn’t make sense to compare them. 

So instead, let’s just look at the variance between votes and comments in the top 12 categories above.

Among these categories, the highest median of upvotes went to Product Updates (19), Personal Productivity (17), and Photography (15). By comparison, the median of the overall sample was 11 votes. Not much can be said about the remaining categories with statistical confidence, but these three are markedly higher than the rest. (Notice that Personal Productivity ranks #12 on the list of most-frequently posted categories, but is the second-most upvoted category.) 

Sales and Marketing ranks the lowest of the top 12, with a median of 9 votes. While I can’t say with strong confidence that this is definitely the least-popular category, it is certainly markedly lower than the top ones. I have two theories around why this might be the case: 1) This is the wrong crowd for sales products, if it’s more of a hacker-focused community, and 2) Not all, but some of the sales-related products come off as aggressively sales-y or off-brand, which might turn people off from checking them out.

As for which categories had the highest number of comments, there wasn’t enough variance to draw conclusions with statistical confidence, with the exception of Personal Productivity, which had a median of 6 comments. By comparison, the median of the overall sample was 2 comments. 

As you can see, there’s not much that can be said about correlating votes or comments to product types, because there just isn’t enough data on Product Hunt yet. In that sense, I echo Leo’s comment that, “This was fun to do with a dataset of 3000 products, but what really excites me is the dataset that Product Hunt will have in a year or two.” 

So let’s dig in to the stuff we can talk about, because I think the top 12 categories are very telling of the kind of place Product Hunt is. 

How Does Product Hunt Compare to the Startup Community At Large?

As one might expect, many of the top categories on Product Hunt are very consumer-focused (Hardware - which often translates into retail; Food and Beverage; Music; Photography). Outside of these areas, I see a couple of other buckets here.

Stuff that’s useful for work. The Developer Tools, Design, and Sales and Marketing categories certainly fit into this area. Examples include Card and The Noun Project.

 I was initially surprised to see how many design- and developer-related products were posted because I figured most products would have a consumer bent. But it makes sense if many contributors to Product Hunt are hackers or designers (which I suspect they are)…so they post things that they found useful themselves. 

Updates to existing products. The #3 most-popular category was product updates - for example, Apple’s iOS8 or Amazon’s new Prime Music. I didn’t expect to see so many product updates posted to Product Hunt, which suggests the community has a secondary function: not just a place to discover new products, but also to discover the latest updates to existing products.

(Side note: It was tough to distinguish what counted as a product update. For example, Amazon’s new music service is technically a standalone product, but it comes from a huge company that’s primarily known for something else.)

Stuff that’s personally useful or entertaining. The #9 and #10 most popular categories were Utilities and Entertainment, and Personal Productivity took the #12 spot (which really should have been #11 - see note about Sports above). Examples include Stache, SHRTURL, and Assistant.To

Like the “useful for work” bucket, it makes sense that many of the products posted to Product Hunt are immediately useful and actionable. A new community product might be interesting, but signing up and testing it out is less gratifying than installing a Chrome plugin that instantly replaces your new tabs with a beautiful photo. The excitement of discovering quick-fix products (whether for personal or work use) that make life better is, I imagine, what keeps many Product Hunters coming back.

There’s also something else to be learned about the popularity of this category grouping. Much has been made of the fact that many products on Product Hunt were not already listed on AngelList, CrunchBase, Mattermark, or other popular startup databases. However, unlike those other places, not everything posted to Product Hunt is meant to be a startup.

I doubt the creators of @pmarca tweet-essays or Emoji Zone are trying to raise a $1M seed round for their ideas. They’re just fun, quirky, wonderful places on the internet. There is joy to be found in opening up Product Hunt and finding yourself unexpectedly wandering through the solar system or experiencing a light year. While these products don’t make up the majority of what’s posted to Product Hunt, you’ll never find them on AngelList or Mattermark.

Product Hunt overlaps with the world of startup databases and sourcing tools in a big way, but we shouldn’t forget that at its core, it’s a place for product lovers: for people to share the things they discovered that helped them out at work today, made their lives a little more efficient, or just made them smile.

tl;dr

  • A contributor’s internal (measured by frequency of posting) and external (measured by # Twitter followers) reputation doesn’t correlate to how well the product does on Product Hunt.

  • 91% of people who post products are male, 9% are female.

  • Wednesday is the most popular day to post, followed by Tuesday and Thursday.

  • Top Product Hunt categories fall into these buckets:

  • Consumer-focused (Hardware - #4, Food and Beverage - #5, Music - #6, Photography - #8)
  • Useful for work (Developer Tools - #1, Design - #2, Sales and Marketing - #7)
  • Personally useful or entertaining (Utilities - #9, Entertainment - #10, Personal Productivity #12)
  • Updates to existing products (#3)

Not everything posted to Product Hunt is meant to be a standalone company. PH overlaps with startup databases, but it’s also a place to discover fun and useful products.

Questions, concerns, reactions? Comments welcomed here or on Twitter.

We’ve all heard the refrain, "You can’t fight progress", in response to dialogue about the tradeoffs between technology and a healthy, balanced society.

It’s true that progress is inevitable, but advancing technology is not the sole goal for humanity.

The sole goal of humanity is to survive, which means that technological innovation must be weighed against consideration of our moral and physical limitations. Only the former keeps our numbers growing; only the latter keeps us from destroying ourselves too quickly.

There are a number of stories from recent history where we’ve intentionally backed away from innovation in order to protect the greater interests of society.

Chemical warfare was used heavily by both sides during WWI, but the effects were horrific. In 1925, the Geneva Protocol banned the use of chemical and biological weapons in international armed conflicts. This taboo against using chemical weapons was reinforced by the countries participating in WWII - even Hitler didn’t dare to use chemical weapons on the battlefield.

Over the following decades, the so-called “chemical taboo” grew, culminating in the 1993 Chemical Weapons Convention, which outlaws the production, stockpiling, and use of chemical weapons. 190 nations have signed the Chemical Weapons Convention, and over 80% of declared chemical weapons have now been destroyed.

We had the technology to mutilate our enemies, but we decided not to.

On a more granular level, consider food processing, which saw rapid development in a post-WWII consumer society, boosted by the Cold War space race. We learned how to package and preserve food and nutrients in entirely new ways - things already deemed disgusting by today’s standards, like canned hamburgers or canned PB&Js, and things we still enjoy today, like instant mac-n-cheese or frozen pizzas.

Society at the time was infatuated with food processing. The sentiment of the time was the triumph of man over nature through science, and artificial food fit right in. 1960s and 1970s science fiction is littered with references to meal replacement pills and cubes, with even Pillsbury developing and selling Space Food Sticks.

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(Image source)

Yet, by the 1980s, we started to realize that we didn’t really want to eat artificial food all the time. In fact, the trend began moving towards slow food and local produce. We discovered there was intrinsic value, both mental and physical, in eating a meal prepared from fresh ingredients.

We had the technology to do away with food, but we decided not to.

Today, there is a surprising lack of conversation about the societal implications of big data, advertising and privacy. We love the idea of adding a data-driven curation layer onto everything. We want data to recommend to us what we should read, what we should wear, what we’re searching for online. We don’t even mind advertisers using our data to help serve us more relevant ads. “The thing that we have heard from people is that they want more targeted advertising,” insists Facebook.

There have been some ominous rumbles from activists about the "filter bubble" and "becoming a gadget", but even the NSA scandal couldn’t unlock a civilian uprising. And maybe that’s because we’re still in the infatuation phase, basking in the glow of a screen that knows exactly who we are and what we want, food scientists gazing blissfully upon our glorious, jiggling Jell-O molds.

Big data and quant-based advertising are less than a decade old, after all.

Maybe now is not the right time to be having that conversation about the pitfalls of sending our personal data into the aether. Maybe, as with chemical warfare and food processing, we curious humans have to make mistakes for a couple more decades first.

But maybe we should at least keep in mind some of the great “technological advancements” made in the past half-century, and how eventually we had to step back and recalibrate. Technological innovation for its own sake is meaningless without context.

Recently, I finished George Saunders’ In Persuasion Nation - a collection of short stories that satirize the American obsession with materialism and frivolities. I enjoyed his writing immensely, but I also noticed that these critiques, published in 2007, are starting to feel dated.

Americans glued to their TVs, dumbed down by advertising, in relentless pursuit of the white-picket dream: that was the post-WWII, pre-Internet motif my generation grew up with, but it’s not the one we’re facing now. Where are the weak spots in today’s society?

In the past decade, the common cultural critique has been addiction to technology, starting with the ubiquitous iPod earbuds of the early 2000s. Events like Digital Detox and Camp Grounded bring people together to technology-free spaces. A popular video called “I Forgot My Phone” reminds us what life was like before mobile phones. Banksy’s latest work features two lovers looking at their screens instead of each other.

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(Source: Street Art News)

But critiques always come in hindsight, which means that even as we react to our society-wide screen addiction, new weaknesses are developing that we aren’t yet aware of. What will satirists write about about our culture 10 years from now?

Here’s a thought experiment. Imagine if all of reddit were computer-generated. All the AMAs, crazy stories, images that make you laugh and cry and share them with friends…imagine if all those things were being created solely for your personal entertainment.

It’s nearly impossible that this is the case, but it’s also nearly impossible to fully disprove.

Now, the follow-up question: would you care? Would you stop using reddit if you knew everything you were reading wasn’t real?

On a lesser scale, this has already been happening. In 2012, the Internet exploded over the Kony 2012 campaign, which urged the US government to help bring an Ugandan war criminal to justice. With over 100M views in just six days, it became the most viral video of all time. The problem was that by 2012, Kony was not as much of a threat as he was portrayed in the campaign. But that didn’t deter some of Kony 2012’s biggest supporters, including nonprofit celebrity Dan Pallotta, who praised the organizers for having "galvanized hundreds of thousands of young people all over the world."

Last year, a woman named Linda Tirado who wrote an essay about living in extreme poverty received over $61,000 in donations from sympathetic strangers. We soon found out (after the money had poured in) that her situation wasn’t exactly as dire as she had claimed. But not everyone was upset. "I sent her some money," wrote one commenter. "Fiction or non-fiction, it felt good then and it feels good now."

The internet presents an unprecedented opportunity for empathy, by connecting us to strangers unexpectedly, and by bringing us closer to familiar faces when we rally around common causes.

However, as we become more empathetic to what’s on our screens, we risk becoming less empathetic to the physical world around us. It begs the question whether Internet empathy is simply masturbatory: a reflexive search to relieve our desires for joy and anger and emotion through external stimuli that could just as easily be fake as it is real. But maybe we don’t care, because we want to believe that it all matters.

The internet allows us to control our empathy. We can limit our outrage to videos from Upworthy that match our political biases. We can follow @EmergencyPuppy on Twitter to give ourselves a daily dose of joy. We can read and share only those articles that hit our hot buttons about feminism, gun control, or whatever else makes us angry.

And in that sense, the empathy that the internet has created may be purely selfish, after all.

This complaint isn’t new. The question of whether giving to charity is an altruistic or selfish act has been debated for ages. And the topic of empathy has already begun to pierce the mainstream, as we debate the ethics of Secret and discuss the cultural foreshadowing of sci-fi drama Her.

We’ll never really know whether we do things because we want to help others, or because we’re trying to better understand ourselves. But the internet has amplified that, made it harder to know when we’re caring about others or just caring about ourselves. How that shapes and changes our society is something the cultural critics will be sorting out in the coming years.

When scraper sites and content farms began to creep their way up the search rankings, Google released the first of its infamous Panda algorithm updates in 2011 to stop them.

When Farmville notifications threatened to overtake our news feeds, Facebook turned the frequency down. The same thing happened with Upworthy-style news articles and meme photos, so viral that they threatened to become a pandemic.

To help us wade through marketing emails to get to our “real” email, Google released a number of changes to Gmail, including the promotion tab and a handy unsubscribe button from the inbox.

These actions suggest that these companies understand their unique position to provide quality control to the Internet. They are more than just another tool or product that we use; they’re a gatekeeper to our experience in the online world.

We don’t want to think twice about having to sort through a crappy newsfeed, inbox, or list of search results to find what we’re really looking for. We just want it to be there. For the most part, these gatekeepers have excelled at that.

Which is why it’s frustrating to read about them using their power in seemingly oblivious ways.

Earlier last week, Google released an update to Google Maps. If you have the Uber app installed on your phone, you will now see - in addition to walking, biking, driving, or taking public transportation - an option to take an Uber. It hasn’t escaped anyone’s notice that Uber is a portfolio company of Google Ventures.

A few days later, Amazon was accused of throttling access to books from publisher Hachette in order to negotiate better discounts - reporting them as out of stock, removing them from their recommendations, and saying it will take 3-4 weeks for delivery, despite Hachette’s insistence that they are fulfilling their Amazon orders on time.

Amazon’s behavior with publishers has been going on for years. It’s not unlike the longstanding accusations from local businesses that Yelp manipulates their reviews unless they pay for advertising, or Facebook deprecating content from business pages unless they pay for advertising.

This behavior is unacceptable, and we should call it out when we see it.

With great scale comes great responsibility. Whether conscious or not, the public relies upon these companies to preserve the neutrality of the internet and keep it a safe and fair space.

Turning down the volume on spammy game notifications, news articles, and low-quality content helps build the public’s trust. Putting personal priorities over public interest destroys that trust, in addition to threatening the rules of capitalism and competition law that keeps our society running like a democracy.

A tiny bookstore favoring strategic partnerships should come as no surprise to anyone. But when it’s a store the size of Amazon - controlling more than a third of book trade in the United States - they should know better.

In the offline world, there are a number of public services running in the background to keep our society running smoothly. Things like street lights, policemen, waste management and sewage.

We use many of these services on a daily basis, but we don’t really think about where they come from or how they’re managed. We just pay our taxes and let the government deal with it.

Similarly, in the online world, there are services running in the background that form the backbone of our online ecosystem and allow us to communicate with one another. Services like Google Search, Gmail, Facebook, Twitter, Instagram and WhatsApp.

Most of these “public services of the Internet” are housed by just a couple of corporations.

Both Google and Facebook have been described as search and social utilities, respectively. Facebook, in particular, took great pains to rebrand themselves from a “social networking site” (product) to a “social utility” (service).

If government’s role is, at least in part, to support the functional backbone services of our society, these corporations have become our de-facto governments.

Acquisitions are often spoken of somewhat sneeringly in tech - a soft landing for companies who couldn’t make it on their own. But there’s another narrative there for certain types of acquisitions, especially the higher-value ones.

These companies were doing just fine in terms of audience and reach, but they never really figured out the revenue-generating piece of their business. So they sold to a corporation, who would sponsor their service so that it could continue to serve society while being managed by a centralized power.

The difference is that Google and Facebook are structured as public corporations, and legally speaking, a corporation’s job is to deliver value to their shareholders, not to organize the people. Companies like Google and Facebook might serve the same purpose online as government entities offline, but they are not - cannot be - a neutral entity. Even if they wanted to be.

I’m glad that Google’s motto is “don’t be evil”, and I believe they and Facebook are doing their best to step into their role as governing bodies, bringing similar services together to run more efficiently by combining management. But it shouldn’t ever be a for-profit corporation’s job to serve the role of public government.

The issue may be forced sooner than we expect, because the next wave of Internet communication - ephemeral and anonymous apps - do not collect data on their users. The old advertising models don’t work as easily on these products as their predecessors.

So the next wave of communication may not just be about whether Whisper or Secret wins the anonymity game, but also how we incubate those services on the Internet.

Is it going to be just another corporate acquisition? Or can we envision something different?

Among philanthropic funders, there’s been an emerging interest in so-called “innovation funding”: the seeking out of riskier ideas with transformative potential for society.

Deloitte’s Gabriel Kasper and Justin Marcoux remind us, for example, that our national 911 system was implemented 40 years ago thanks to regional pilots supported by the Robert Wood Johnson Foundation. But they also warn that over the years, philanthropic funding has become too comfortable, focusing on lower-risk ideas that also have less potential for change.

Innovation funding and venture capital differ only in that the former is aimed at social returns, the latter on financial returns. Both are investment strategies in high-risk, high-return opportunities.

For example, someone’s promise to deliver 100 mosquito nets is probably more feasible than someone’s promise to breed malaria-resistant mosquitos, but if the latter works, the impact would be enormous.

Innovation funders frequently compare themselves to venture capitalists in order to explain their new approach, but I haven’t seen many VCs compare themselves to innovation funders. I thought I’d take a moment to highlight some key concepts that both types of investors can learn from each other.

What can philanthropic funders learn from VC?

Not every individual investment needs to be a winner. In the social sector, funders expect that each of their investments can show evidence of success (i.e. impact). This expectation leads to investing in lower-risk, but smaller opportunities. VCs, by contrast, structure their portfolio knowing that not every company they invest in will be a winner. But the ones who do win, can pay off their losses many times over.

It can take years to see results…and those results may not be linear. The average time to exit for a VC-backed tech company is 4-7 years. VCs spend a lot of time waiting and not knowing whether a portfolio company will become a success or failure. By contrast, funders in the social sector would find it ludicrous to wait 4-7 years to know whether their grant was put to good use. But high-risk investments may not show results for a long period of time.

The nature of the beast is to swing for the fences. VCs understand that investing in a lot of medium-return companies might be a safer bet, but would totally defeat the purpose of venture capital. The point of VC is to swing for the fences and potentially generate unnatural returns. There will always be a need for funders who invest in safer bets, whether in tech or the social sector, but we also need a place for funders who are willing to take a chance on the unknown.

What can VC learn from philanthropic funders?

Portfolio companies breed externalities. Funders in the social sector recognize that change happens in an ecosystem, not a silo. If you give free shoes to a village, that might put the local cobbler out of business. It might also make it easier for a child to walk to school, so that you’re not just affecting her clothing, but her education. Similarly, some companies have the effect of creating new markets, new businesses built on their platform, or encouraging new trends. It’s not just about whether that one company does well, but how they affect everything else around them.

Embrace the double bottom line. Just as funders in the social sector have learned to embrace financial returns in addition to social returns, so should VCs recognize there’s social value embedded in their investment strategy. Creating and nurturing the next big thing in the world is exciting, and a big reason why VCs are in the business. If they were purely interested in finance, they would probably pursue opportunities that outperform the stock market. Whether VCs acknowledge it, or perhaps just call it by a different name, they’re in pursuit of non-financial returns as a secondary metric.

The parallels that can be drawn between innovation funding and venture capital serve as a reminder that the ecosystems we create to effect change are similar, no matter the sector they tackle.

Silicon Valley types are characterized as people who care about not caring.

They don’t demonstrate their wealth with fancy cars or spacious mansions. They look down upon lavish displays of materialism and wealth. They wear hoodies to work, flip-flops to meetings.

These stereotypes have led some to incorrectly assert that Silicon Valley culture is “anti-materialistic”. It’s not. It’s just a new kind of materialism.

You won’t see many people in Silicon Valley showing off their wealth with designer shoes and watches, because we don’t value those things as a display of power. What we do value is productivity and optimization. So a Silicon Valley display of wealth is about services, not things.

An excess of money is poured into Ubers, Lyfts, Sidecars, Homejoys, Washios, Prims, Lunas, TaskRabbits, Execs, Postmates, oDeskers, Kitchits, Gobbles, Sprigs, Zestys. Your wealth isn’t measured by what you own, but rather what you can hire other people to do for you.

Time is the most valuable thing in Silicon Valley. And the wealthiest can afford to capture as much of that time as possible.

There are plenty of people who refuse to take a public Muni bus or do their own laundry anymore, because now, there’s a service for that. And although many of these services have helped to build the “collaborative economy” and a means of generating income independent of a full-time job, they have a side effect of blurring the gap between the haves and have-nots.

Are you a Lyft driver, or are you someone who takes Lyfts? It used to be easier to tell who would drive a cab and who would take them, but now, a Lyft driver and a Lyft customer might look the same demographically: late 20s, good education, drinks at Dolores on the weekends.

Silicon Valley types aren’t anti-capitalistic. In fact, hiring people to do things for you is the very definition of capitalism. It’s just not as obvious when the person you’re hiring might be someone you meet at a party later that night. (Some have dubbed the denial of this "anti-capitalism capitalism".)

People in Silicon Valley aren’t quite anti-materialistic, either, if the sentiment of anti-materialism is to free oneself from physical dependencies. Silicon Valley types are just as dependent on services to survive as the power exec of the 90s might have been dependent on his or her 6-car garage and Lamborghini. The few items we do purchase are grossly marked-up: the $5 coffee or the $4 toast, and we value them much more than a cup of coffee or a piece of toast deserves to be valued.

Even if we came here for the impact, we’re staying for the money - and benefiting from it no differently than a Wall Street banker.

When I published a post last week about alternate funding structures that better align innovation with business, a common response I got was, "Isn’t that what B Corps are for?"

B Corps are a corporate form in the United States designed for for-profits with double or triple bottom lines (considering society and environment in addition to profit). In practice, B corps tend to be companies like Ben and Jerry’s or Klean Kanteen, with explicit social or environmental missions that you could recognize as a “do-gooder” type from a mile away.

B corps have done a great job stimulating public conversation about broadening the goals of a for-profit entity, but in practice, labels like these run the risk of alienating rather than normalizing the idea that companies doing good come in all shapes and sizes.

My suggestion wasn’t that more tech companies become B corps or nonprofits. It wasn’t about encouraging tech founders to tackle issues like homelessness or poverty, either. It was about rising above tax designations and the expectations associated with them to evaluate investor and founder behavior more objectively.

Innovation Isn’t Limited by Sector

Larry Page received flack for suggesting that he would rather leave his billions to Elon Musk than to charity. But his underlying rationale - that he wants to put his money where the innovation is - is not unreasonable. I understood his comments more as a lack of faith in the social sector’s ability to innovate than a lack of interest in making the world a better place.

In a recent article published in the Stanford Social Innovation Review, two nonprofit founders, Bill Shore of Share Our Strength and Darrell Hammond of KaBOOM!, challenged their peers to tackle bigger, riskier barriers to social change rather than continuing to invest in low-risk programs that perpetuate the status quo.

In the case of Share Our Strength, they moved from delivering meals to schools to addressing the stigma associated by children with being on a subsidized food program, which kept them from picking up their meals. In the case of KaBOOM!, they moved from building community playgrounds to encouraging a positive culture that would make kids want to play more often.

This focus on innovation over handouts is beginning to pick up steam in the social sector, and I truly hope that the term “nonprofit” becomes associated with big risks and building better systems rather than charity on a shoestring.

Doing Good Isn’t Limited By Tax Status

"Doing good" does not just mean charity, philanthropy, or helping those less fortunate than you. "Doing good" means changing the game - no matter the industry.

Defined in this way, it seems silly to limit “doing good” to explicit social causes like saving the environment or women’s rights. Doing good can also mean things like connecting people with each other (Facebook), creating a more empathetic world (Secret), helping people trust each other (Craigslist), or enabling more people to earn income on their own terms (AirBnB).

But in order to accept this definition, we need to uncouple the idea of doing good with labels like for-profits, non-profits, social causes, or B Corps, and instead focus on why people are doing what they do, and how they go about doing it.

Are they preserving the status quo, or solving big, hairy problems? Are they excited to make an impact on their society, or are they in it for recognition or money?

It’s Not About Becoming a Nonprofit

Companies don’t become nonprofits because they’re devoted to a social cause. There are plenty of companies devoted to social causes that make lots of money. For example, Revolution Foods is a thriving for-profit company that provides healthy meals to students. You could put for-profit tech companies that support collaborative economies, like Lyft or TaskRabbit, into this category, too.

This is also why I prefer to use the term “social sector” rather than “nonprofit sector”, because not all who work on social causes are nonprofits.

Companies become nonprofits when being profit-driven might compromise the value and integrity of the service they provide. In this situation, our society finds it valuable to continue supporting their mission. That applies to nonprofits like many universities and schools, but it also applies to tech-related nonprofits like Wikipedia or Khan Academy.

Your tax status isn’t determined by the cause you tackle. It’s based on the economics of your model. So although many tech companies have a clear revenue model, especially in the areas of SaaS, enterprise, and e-commerce, some tech companies, namely audience-based companies, do not.

What should we do with tech companies like Snapchat who are clearly innovating and providing value, but don’t have a clear revenue model? Why do we assume those companies need to make as much money as possible? Because they’re solving a communication problem rather than a homelessness problem?

The social sector encompasses multiple ways to fund innovation, whether it’s charging directly, getting subsidized by the government, or getting corporate or crowdfunded donations.

It’s time for the tech sector to consider supporting multiple ways to deliver on mission as well.

I’ve been writing - on the Disruption Corporation blog.

My first set of posts from last week considered public and private data on startups, and the challenges we face in benchmarking startup success.

You can read them here: