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Why One Startup Will Never "Change the World"

by Nathan Rothstein
May 15, 2014

Why One Startup Will Never "Change the World"

by Nathan Rothstein
May 15, 2014 | Comments (13)

A few weeks ago, I was invited to speak to the Harvard Social Enterprise group. When the 25 people in the room finally sat down—all Harvard undergrads —I asked them to go around the circle and introduce themselves. Then I asked them to tell me why they think people are poor. Systemic issues... Inequality that is passed down through generations... Lack of access to education.

I noticed no one said, “Because people don’t have a photo sharing app, or easy access to hundreds of thousands of shoes online!” And yet these are the kind of startups who the press, and in turn too many of us, say are “changing the world.” Let’s be clear: if these companies don’t help to address why people are poor in the first place, they aren’t changing the world, they aren't solving the problem of poverty. They aren’t changing the policies or patterns by which poverty is created. They may be doing something charitable (or that they think is charitable), but it's something else.

I’ve always thought doing good meant being a part of a greater system where every person is doing their part to change the system or help innovate what’s next. But this vision, understanding one’s humble place in a larger, much more complex puzzle, I fear is being quickly replaced with grand startup dreams and way too much founder hubris. 

During the Civil Rights era, Rosa Parks took a stand when she didn’t move to the back of the bus, but she was also a part of a larger movement that deliberately planned to cause economic harm to racially unjust institutions. The Civil Rights Movement helped shift the world, but no one act caused all those sweeping changes. We know this, but we still talk about individual startups changing the world anyway. In my view, "change the world" language should only be applied to large movements that help shift people out of poverty. We need to remove it from startup world. 

A part of me understands founder’s ego. Whenever you start something, you have to believe you're doing the most important thing in the world because you're constantly trying to convince stakeholders, customers, and investors that this idea can be turned from nothing into something and more than that, something BIG. You need an ego. But it’s all too easy to speak in grandiose statements that take away from what should be the simple premise of your business: solving a problem for customers.

In Mike Judge’s new HBO show, Silicon Valley, founders are always talking about how their code is changing the world. It’s easy to disregard this as exaggerated satire, but this is the way people talk! It really happens, it’s what many entrepreneurs really think. And this hubris is encouraged by the media. Check out the Forbes piece, "The Top 10 Start-Ups That Are Changing the World." The list includes Airbnb, Zappos, and Square. These are good companies with impressive operations, but they should not be described as world-changing organizations.

The Boston Globe recently covered a new company, Manicube, that just raised $5 million from Bain Capital Ventures, making it easier for women in the workplace to get manicures. It’s a great business model in that is cuts out friction and brings to market something that has long been validated in the market. But in the article the co-founder has to say (you guessed it), “We’re trying to change the world, and make it just as acceptable for a woman to get a manicure at work as it is for a man to get a shoe shine.” It’s a sad day when this becomes the definition of world-changing business behavior. And in startup land, founders are often asked, “How is your new business going to change the world?” People are right to say technology has changed the world as we know it. But does one startup becoming a large company single-handedly “change the world?” No.

Even if our business starts to find success, we alone aren’t the job creators. When corporations and startups talk about being job creators, they aren't hiring out of the goodness of their heart. They hire because they have a customer demand they need to meet. The customer is just as much an engine as the entrepreneur. As founders, we're just here helping to solve someone’s problem: from not having a convenient place to get a manicure to having too many t-shirts, but that’s it. No really, that’s it. 

Why is it important that we understand this? Because perhaps if we do, we’ll also understand that really big change requires something totally different than what we’re doing in our individual businesses; it requires working together. Change happens gradually. Each act of resistance or creativity plays a small role, some bigger than others, in changing the world, but it’s a group effort. People and communities organize and then the public and private sector shifts. Each sector plays a part in making the world a better place, but businesses, public institutions, and consumers must work together to change the living conditions of human beings living in poverty across the globe and here in the United States.

Where do we start? We might cut back the hubris. It’s not a simple pencil that lifts people out of poverty, or access to a soccer ball, or an app that changes filters on a photograph. We know poverty is a complex problem, so let’s stop boiling things down to one object or pretending that we alone have the answer. It might just help us build better businesses, too.

The views expressed in this post do not necessarily represent the views or policies of The Lean Enterprise Institute.
Keywords:  startups,  waste
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13 Comments | Post a Comment
Jessie Reyes May 15, 2014
6 People AGREE with this comment

WOW Nathan! WHAM-O! Get the "hubris" out!

What a great article and an interesting perspective! While Hubris does drive the wrong business perspective and behavior at times, root cause is still our society’s myopic view on what business success is. It still is money magnitude and profit.

If there was honest money to be made eliminating poverty, the 6 billion poor people on earth would become the newest and largest single untapped 'customer' demographic businesses would be scrabbling for. But without the poor having money, there is no means of value exchange in today’s model. And there in is the true problem with "changing the (real) world".

We need to develop a new value exchange system for our most important customer…humans.  This rich resource at one time was “mined” in the words of Emma Lazarus’ quote on lady Liberty: “Give me your tired, your poor…huddled masses…wretched refuse…homeless. I lift my lamp beside the golden door.”  Our value exchange then was the hearts, minds and intellect potential of humans far less fortunate than us.  It worked!!! Maybe too well.

Unfortunately today the quote could be re-written with hubris as: Give me your energetic, your wealthy, hand picked few, highly valued, with homes in many places. I will send you a plane to fly you to …

As Lean scientists and practitioners I see our community as laggers at changing the real world from poverty, hunger, poor health and un-employment. We say Gov orgs and NGOs are doing that work using some of lean and then turn our backs to them to sell our knowledge to profiteers. Let us be the first to rewrite the value exchange system to help really change the world. Let us be the ones re-framing lean to highlight the wealth there really is in what the rest of business world feels is waste and not worth going after

Again, thanks for the interesting perspective.

Reply »

Paula May 19, 2014
1 Person AGREES with this reply
Bravo! Perhaps the underlying question is, "changing the world for whom?"

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Jonathan Maddison May 19, 2014
6 People AGREE with this comment

"Changing the world" does not mean "Saving the world."

Nobody is pretending that Instagram is going to cure cancer, or Twitter is going to end poverty.

But they are examples of high leverage activities - the product of a few people is affecting the behavior of millions, or even billions of people all over the globe. In that sense - they are quite literally "changing the world."

Maybe tech startups really do have something to teach us about affecting change.

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Trish Dewald May 19, 2014

As the person in charge of raising funds and awareness for COTS, an organization that serves the homeless in Detroit, I'm constantly struggling to find a way to use these "World Changers" to "Save the World", to use your terms.  

One clear advantage that companies and startups with big capital support have over non-profits (besides cash) is the opportunity to fail.  We know that big risk = big rewards, but when you're fighting for every dollar you can find to feed, shelter and support people, it's very scary to think of what failure would mean when failure is not an option. How do we leverage the "World" to "Save" so that the bottom line is a true GAME changer?  

Reply »

John Bardos May 19, 2014

9/11 definitely changed the world, as did the BP oil spill, the Exxon Valdez, the tobacco industry and countless other destructive businesses and events. 

"Changing the world" doesn't mean "saving the world", but it's implied. BP or Exxon would never use that slogan to describe the impact of their oil spills. 

Many of our smartest, most talented and certainly most motivated entrepreneurs focus on bringing socially useless or even destructive businesses into the world. 

Wouldn't it be nice if even 10% of that energy could be directed towards easing the suffering of the world's most vulnerable?

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Ida May 19, 2014
1 Person AGREES with this comment

We are using technology and invention to lift 1 person at a time out of poverty. We struggle for donations as people really don't want to change the world but rather to change their personal affluent world. Donate here www.upliftinc.org/donations.aspx


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Sara Schairer May 19, 2014

What about a global social movement that creates daily compassionate actions? (Think Livestrong but with a twist...literally.)

Compassion it.


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Elizabeth Eichhorn May 19, 2014

I was asked by a high school student yesterday which t-shirt making company is the most ethical to use for his band to get t-shirts made.  He had been looking at American Appareal because he knew that they were made "locally"  (we are also in LA).  I explained to him that locally manufactured doesn't mean what we always want it to mean.  

I own a small start-up and really strive to know every aspect of the company.  The people I work with for marketing, vendors, even the seeds that I buy for gardening, however I am not financially successful.  I wonder, do those businesses that are really trying to "change the world" have to forgo financial success?  

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Eric Dahl May 19, 2014
2 People AGREE with this comment

I love the thoughts...that said, businesses can play a valuable role in bettering the world as one piece of a much larger puzzle. Hubris is bad, but sometimes the converse is apathy. 

I just opened the doors on my startup: Crowdswell.com. My goal is to change the world "glocally" by allowing people to more directly improve their neighborhoods and communities, in partnership with organizations, government, and companies. 

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marsha Kanary May 19, 2014

I wonder if LEAN

could be an acronym for 




Nourish (Negotiate)

or if its about keeping things 'lean'....  or both? or none? 

I will read this, and the comments, again sometime. thanks


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Visual Journalist May 20, 2014
5 People AGREE with this comment

I disagree with your statement that if "companies don't help to address why people are poor in the first place, they aren't solving the problem" or "changing the policies". Poverty isn't the only problem in this world nor is it the singular root of all problems. To me, this is a very narrow minded statement and a negative seed to plant in the heads of your readers. You're speaking to fellow entrepeneurs who are fueled by hope, hope that their solution or contribution will help to solve a problem, big or small. 

You may not be aware of some of the companies leading actual change so let me introduce you to a few of them.

FREESET - Yes, this company is "hiring out of the goodness of their heart". It was specially formed to give women who are trapped in the sex trade in Kalkuta a job. They make bags out of burlap and recycled sari with 100% of profits going to the women. It is run by volunteers and it is a beatiful example of how a company is changing the world. They're giving hope to women, an income, and inspiring other companies by showing entrepreneurs what is possible.

PATAGONIA- Started from one man who made climbing gear out of the back of his car. Now they are arguably one of the most responsible businesses in the world, seriously changing not only people but businesses and our environment. Patagonia's founder Yvonne Choinard, gives millions of his profits a year to grassroot projects locally and abroad. He pays for his employees to volunteer, covering their salary and benefits for up to two months a year. He started a non-profit called 1% For The Planet uniting around 1,200 member businesses all committed to donating 1% of profits to environmental groups. This guy pretty much created the standard in climbing techniques as well as responsible behavior ethics to practice while enjoying this sport. This is an example of "one startup becoming a large company single-handly changing the world".

PROJECT NOAH & KICKSTARTER - Both utilizing crowd-sourcing or crowd-funding techniques. Kickstarter alone is fueling innovators and inventors around the world, who until now, were limited on funding sources. Talk about a total game changer. Project Noah is turning ordinary people into citizen scientists, ultimately changing the way we document the worlds species.

There are many more examples of what is possible and talking about them would make for a much more interesting and inspiring article instead of aruging that no one is making a difference. With all the nay-sayers an entrepreneur has to come across, let your writing space be a positive place to turn to for hope. 

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Adam May 20, 2014
Curious about your thoughts on TOMS...

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JohnPod May 24, 2014

In the end its a systemic problem.  A sort of Pavlovian dynamic.  The system in the way it is set up has us chasing worthless money as a means to measure success.  You wave the money in front of people and they react to that stimulus.  Founders/job creators are just cogs in the machine.  It is not different then how any corporation works. You have upper management/management/supervisors/ then the wealth creators (setup personel/programmers, etc.) /workers.  

People at the top of the chain, "these are not the founders" have all the power, since they can create this value with no effort.  As long as this system exists, only those at the top of the chain  can decide when something will change, and only if  it promotes their needs.  

So its nice to say we must change ourselves first, and we can to an extent, but its not the solution to the real problem.  As individuals we do not have the power to change the world against a well structured system. 

If you want real change then the system has to be addressed and the pavolovian stimulus adjusted to promote a different result.    

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Search Posts:
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