The dominant narrative about startup funding is that it’s elusive, only flowing to major hubs such as Silicon Valley, New York or Boston. Today’s entrepreneurs know the advantages of launching a company in a well-established startup ecosystem where both funds and resources are abundant, but some may be less familiar with where untapped opportunities lie.
Opportunity isn’t so much tied to geography as life stages, says Ankur Jain, founder of Kairos, an organization of business and political leaders devoted to identifying the world’s biggest problems and backing ventures that aim to solve them. The group’s conversations have led him to conclude that not enough entrepreneurs are solving problems for middle-class people who are struggling to pay off student loans, manage the high cost of living, find jobs that match their skills or thrive in retirement.
“A lot of the stuff getting funding in Silicon Valley seems to be going after problems that don’t exist,” Jain says, citing an unnamed “$700 juicer” as a recent example. Some Americans might perceive government as out of touch with their needs, he argues, but the influence technology companies have on people’s livelihoods is powerful and continually increasing.
“If Silicon Valley forgets about the middle class,” Jain claims, “the backlash that we’re going to see is going to be tremendous.”
Today, Kairos is announcing a new $25 million fund to help build and fund companies that address problems that affect people in five life-stage groups: graduates with loans; the entry-level workforce managing high-rent costs in cities; parents raising children despite high costs of living and childcare; people who have lost their jobs because their skills are outdated; and people managing living and care costs post-retirement.
“These are areas that should have been worked on for the last 10, 20 years, by people in the Valley,” Jain says. “And what’s ironic is, we’re just making it worse. Now, because of technology, people’s skills are becoming irrelevant faster and they’re losing their jobs and need to be retrained. We’re not creating those solutions. We’re creating the problem.”
Jain previously co-founded Humin, a startup that Tinder acquired in March 2016, and served as head of product at Tinder until June 2017. His father, Naveen Jain, is the founder of Moon Express, Intelius and Infospace.
“Growing up in this industry, technology has always reached millions and billions of people, but it’s always operated in its own silo,” Jain shares. “And it’s only been recently where every industry has become technology.”
Kairos is backing companies developing technology solutions to problems such as home care for retirees or nutrition for children, no matter where they live or what their family’s income or schedule is.
“Big problems equal big needs,” says Bobbi Brown, founder of Bobbi Brown Cosmetics who serves on the Kairos board of directors. “So focus on creating the best solution, and people will come. You don’t need an entire ecosystem to get started.” Brown serves alongside NFL Commissioner Roger Goodell, former Mexican President Vicente Fox, former Greek Prime Minister George Papandreou, Dr. Mehmet Oz and Esther Lee, the CMO of Metlife.
The home healthcare market, for example, has an estimated global worth between $170 billion and $239 billion, according to various sources. However, entrepreneurs often see investors funneling the dollars to the areas where investments have been successful in the past, be they cities, industries or technologies — or to ideas that serve demographics that the investors themselves are part of — and frame their ideas for new companies accordingly, Jain explains.
“It’s disappointing when an entrepreneur feels like they have to add the word ‘blockchain’ to whatever they’re doing just to get the attention of an investor,” Jain says. “I do believe people in the valley want to solve problems and make the world a better place. I just don’t think that they’re actually connecting with everyday people and understanding the biggest needs out there. If we can make the opportunity to shine here be solving big problems, and call out the stuff that’s just superfluous and hype-based, I think it starts to move the needle.”
It’s up to every entrepreneur to champion these types of efforts. By reframing their efforts, Jain believes founders tackling big problems can inspire others to do so as well.
“If you talk to an entrepreneur, the way that they validate what they’re working on is, ‘We’re a Y Combinator-backed company, or we’ve raised X amount of money,’” Jain affirms. “People should be talking about what they’ve built by the problem they’re solving first, not by how much money they’ve raised.”