Hey Young, Hot New Yorkers: Why Aren’t You Building Useful Businesses?

Gauri Manglik
Gauri Manglik is getting attention for her startup, SpotOn. But SpotOn is another check-in app that was built off of Foursquare’s API.

This morning we grabbed breakfast with Jonathan Hefter of Neverware. Neverware makes old computers run like new by accessing the latest software via the cloud. It’s a good solution for schools that can’t afford to keep updating computer software.

Out of all the founders on the 25 and under tech star list, Hefter was the only person our commenters respected.

“When will Gen Y start solving real problems? You have a handful of people getting rich off some crappy app where the root of all monetization is always advertising. Where’s the next Apple? I don’t care where the next check in app is,” one commenter wrote.

“Only one of them—Jonathan Hefter—seems to be doing anything that actually helps people in a meaningful way,” wrote another.

When you think about it, the commenters are right.  Young founders build companies off existing APIs, like Foursquare and Facebook. And when you build an application that merely piggybacks on someone else’s invention, you add significantly less value to society.

Hefter came up with a good analogy.  “In biology, you learn that grass absorbs 10% of the sun’s energy. The cows that eat the grass absorb some of the energy, but not as much energy as the grass. When you build off a company’s API, you get further and further from the source.”

Young founders seem to be enthralled with building fun but meaningless apps.  They’re building “companies” based on want, not need.  As Venture Capitalist Mark Suster said, “The auto industry alone is a $1.6 trillion industry, and you want to f*ck with bars and restaurants?!”

Maybe young founders are doing this because it is their first stab at entrepreneurship, and it’s easier to win a hackathon than it is to build a world-changing business. 

Or, maybe it’s because young founders haven’t seen enough of the world. They haven’t witnessed real problems that need to be solved. 

Maybe investors are to blame. That’s what Hefter thinks.

“If I’m selling a $100 ice cream cone and you, living in an educated society, buy it, who’s fault is that?”

In other words, it’s not wrong for entrepreneurs to accept millions of dollars. VCs are enabling pointless businesses by funding them. 

Maybe we’re enablers too, because we write about the startups they fund.

There are a handful of young founders who are doing good for society. Unfortunately people like Hefter seem to be the exception, not the rule.