Why Give a Damn:

There is a belief that big problems offer a poor risk/reward ratio, you can spend a lifetime working for social change with seemingly little progress. But the truth is, big problems can generate big returns.


The author of this post, Chris Yeh, has been building internet businesses since 1995 and currently serves as the VP of Marketing for PBworks, as well as a General Partner at Wasabi Ventures.
 
A common complaint that’s making its way around the startup world is that too few entrepreneurs are working on big problems.  I can sympathize; I too am tired of seeing the endless variations on photo sharing, dating, and nightlife apps that entrepreneurs pitch to me.  Yet simply complaining is unlikely to change anything.  Rather, we need to first understand why the problem exists before we can recommend corrective action.
 

Big problems tend to offer a poor *perceived* risk/reward ratio

Why don’t entrepreneurs work on big problems?

For me, this boils down to two things: Exposure, and Risk/Reward.  For better or worse, most of the young entrepreneurs I encounter come from privileged backgrounds, as do I.  When I was growing up, I never had to worry about money or taking a job to help my family.  After leaving home, I then spent my years in enclaves of privilege like Stanford University and Harvard Business School, whose manicured campuses are about as far as you can get from the problems of the world.  Other than some vague notions of helping the poor/hungry/homeless, the 22-year-old me had literally no exposure to the real problems of the world.
 
Big problems also tend to offer a poor perceived risk/reward ratio.  Instagram can go from launch to billion-dollar acquisition in 18 months; you can spend a lifetime working for social change with seemingly little progress.  And while some dedicated idealists might be willing to sacrifice their own financial success to work towards a cause, the people who are willing to do so generally don’t have the requisite skill set to be entrepreneurs.
 

How can we address these issues?

The poorest 4 billion in the world represent a huge potential market

The two issues go hand in hand.  Remember, I noted that big problems tend to offer a poor *perceived* risk/reward ratio.  Actually, big problems can generate big returns–just look at the stock price of Tesla Motors, as an example.  But a lack of exposure correlates strongly with a lack of perceived opportunity.  Plumpy’Nut, a simple mix of peanut paste, milk powder, and vitamins, is being used to treat malnutrition and famine.  It saved 90% of treated children during a famine in Niger.  Plumpy’Nut’s owner, Nutriset, now franchises manufacturers in 11 countries, and UNICEF buys enough to feed 2 million at-risk children per year.
 
C.K. Prahalad called this the fortune at the bottom of the pyramid, pointing out that the poorest 4 billion in the world represent a huge potential market.

The best way to convince entrepreneurs to work on big problems is to educate them and convince them that they can make more money by doing good.

The best way to convince entrepreneurs to work on big problems is to educate them and convince them that they can make more money by doing good than by improving the click-through rate on mobile ads.  If you have a problem you think entrepreneurs can help you solve, the best answer isn’t to offer a prize (you probably don’t have the money anyways) but rather to figure out the massive business opportunity that problem represents, then write about it.

Or, if you discover a truly billion-dollar opportunity, start your own company!

Chris Yeh

Author Chris Yeh

Chris is the VP Marketing for PBworks, partner at Wasabi Ventures, and an avid startup investor and advisor. He is also a co-author of The Alliance and serial tech entrepreneur in Silicon Valley.

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