A $700 juicer. A delivery app that lets you pay $10 to get your $8 burrito faster. An app to valet your car.
These are the kinds of innovation that Silicon Valley has recently poured billions into building. Our industry that once was lauded for bright, young talent taking on the world’s biggest problems now seems to be forgetting about the people that need solutions most. Over $160bn in venture capital are going into startups each year — and yet most of the new innovation is driven by the latest hype cycle, not the real problems we face.
If there’s one thing we in the tech world should have learned from this recent election, it’s that the middle class is being squeezed. And people are sick of being forgotten.
While we obsess over cryptocurrency, the financial burdens our communities face at each life-stage are only getting worse. Student debt has reached crippling levels, rent is at record highs, and the costs of childcare have skyrocketed. Meanwhile, technology now has a bigger impact on people’s livelihoods than even governments. Artificial Intelligence will automate over 10mm jobs. The growth of on-demand companies will mean even fewer people have basic work benefits. And tech giants are shuttering local businesses who can no longer compete.
So yes. The recent attacks on Silicon Valley are justified.
But our communities need entrepreneurs more than ever. We need founders to rethink the business models that leave everyday people financially strapped. To help kickstart these efforts, we asked a diverse group of leaders which of these challenges are best solved by entrepreneurs in the private sector.
Interestingly, the categories mapped nearly perfectly to the major life stages people go through:
- Graduating with loans (Student Debt): Before even starting their careers, our youth are already saddled with immense debt. And current lending models require them to start paying it back while they’re still on low starting-salaries. How can we create new models to reduce debt payments as a portion of income?
- Working in cities (Cost of Rent): Around the same time, our youth are being hit double as they move to cities and try to afford housing. The median rent is now over 50% of post-tax income in major cities around the world. How can we create new models of living or housing to reduce this cost?
- Having a child (Cost of Childcare): Being a new parent puts even further burdens on your finances, especially as one of the parents often needs to leave the workforce. How can we help parents give their babies quality care without needing to spend a fortune or leaving the workforce to stay at home?
- Losing your job (Retraining) — With the typical American having less than $5k in savings, losing your job can be devastating at a time when you’re dealing with all these expenses. As new technology automates more and more middle class jobs, how can we make sure people land on their feet and have a clear path to re-employment?
- Post-retirement (Costs of growing old): People today can’t afford to retire and grow old. The typical savings for someone in their 50s is only $8,000. Yet as you get older, healthcare costs alone can cost hundreds / week. As a result, people either end up in the hospital or being uprooted and placed in care homes. How can we reduce the financial burden of growing old in the comfort of your own home?
This same group of leaders has now joined to form a board and together with Kairos are launching a fund to support these efforts and help shift more of the $160bn in annual venture investments to these types of problems. The board so far includes: Mark Thompson (CEO, NY Times), Mehmet Oz (The Dr. Oz Show), Ronan Dunne (President, Verizon Wireless), President Vicente Fox & Marta Fox (Former President & First Lady of Mexico), Roger Goodell (Commissioner, NFL), Bobbi Brown (Founder, Bobbi Brown Cosmetics), Esther Lee (CMO, MetLife), Michael Dubin (Founder, Dollar Shave Club), and David Carey (President, Hearst Magazines). But we need the support of even more governments, investors, and business leaders to help focus entrepreneurs on these challenges.
We in Silicon Valley are at a critical juncture. The tech world holds an increasing amount of power, and with that comes a responsibility to solve the problems that matter most. If we ignore the challenges squeezing our young people and middle class, these recent attacks will only be the beginning of a global backlash. But if we focus our innovation machine on problems worth solving, then we can remain a beacon of positive change for our communities.