Why venture capitalists spot few big ideas

Two facts help explain this:

1. Venture capitalists don’t like wacky people.

2. “Usually the wacky people have the breakthroughs. The 'smart' people don't.”— Burt Rutan, innovative aerospace engineer

As Walter Isaacson (biographer of Steve Jobs) noted, “Smart people are a dime a dozen. What matters is the ability to think different … to think out of the box.”

“While full-blown Asperger’s Syndrome or autism hold back careers, a smaller dose of associated traits appears critical to hatching innovations that change the world. … To be great, you can’t think like everybody else, and you probably won’t fit in to the herd.” — Matt McFarland in Why shades of Asperger’s Syndrome are the secret to building a great tech company

A relevant excerpt from one of my articles: “The take-home message from Apple's 2016 holiday commercial is to embrace diversity by welcoming those who seem different: a worthy message, but not one that Apple practices: their obsession with cultural fit virtually guarantees they wouldn’t hire Steve Jobs if he applied for a job today. Jobs was stranger than most people realize, as brimming with flaws as he was with brilliance.”

I then summarized some of his behavioral peculiarities that led to him being unfavorably labeled by many people, including Bill Gates, who called him “fundamentally odd” and “weirdly flawed.” And consider the source: “Time suggested that the intensely awkward Bill Gates is autistic.” Esther Dyson, a longtime friend, said that Gates “never really grew up in terms of social responsibility and relationships with other people. He's brilliant but still childlike. He can be a fun companion, but he can lack human empathy.”

Armchair psychologists love to label people. So do doctors; when they do it, it is called “diagnosis,” yet rarely do they identify the root causes. For example, Mark Zuckerberg lives with a doctor (his wife) and is surrounded by brilliant people, none of whom seem aware of how some of his behavior is consistent with mercury poisoning and how he grew up exposed to it. Mercury is one of the most potent neurotoxins yet some of the greatest geniuses in history were poisoned by it.

That paradox baffled me until I, too, was poisoned by mercury that erased some of my prodigious memory (that enabled me to ace medical school even though it bored the heck out of me and I have the attention span of a fruit fly) but conferred creativity enabling me to do very valuable things I once would have deemed pipe-dream impossible, with seemingly no end to the innovations resulting from it. For example, days after I posted A fundamentally new method of propulsion and more, I woke up in the middle of the night and jotted down a way to achieve that same effect with a device that could instantly configure itself. Advantage? It would function comparably but take up almost no space until it was needed.

Zuckerberg odd but funded

Zuckerberg was funded by VCs, thus seemingly refuting my original claim, yet he could get his foot in the door because he’d attended Harvard. Had he dropped out of Michigan State, you likely never would have heard of him.

Silicon Valley’s infamously required “warm intros” (that Carlos Bueno pilloried in The next thing Silicon Valley needs to disrupt big time: its own culture) manifest old boys’ club antiquated networking based on WHO you know, not WHAT you know and can DO for others.

“It’s a perpetual nightmare of a venture capitalist to go down in history as the one who didn’t see merit in the next big thing, not gauging the worth of an idea that could conquer the world and rewrite the ways of life.” — Vani Kola in Would I invest in a Mark Zuckerberg?

Thus this nightmare is largely self-created by venture capitalists who live in insular bubbles, leading to a self-reinforcing fallacy: after blinding themselves to solutions from outsiders, VCs too often see only solutions by insiders, convincing them they’re the only ones who have them.

“Living in the same city as Microsoft, I’m only too aware that, even in low-technology businesses like coffee, the Next Big Thing could knock the dominant player into second place tomorrow. I keep pushing to make sure that Starbucks thinks of the Next Big Thing before it has even crossed anybody else’s mind.” ― Howard Schultz in Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time

Pushing innovation is wise but the 0.002% of the population that works for Starbucks cannot possibly outthink the 99.998% who don’t. The Next Big Thing rarely originates within a company, network, or even extended network: a fact that is immediately obvious to everyone with at least a rudimentary grasp of statistics. Thus VCs who limit their connections limit their success.

Even GV (formerly Google Ventures) makes this mistake: their website omits contact info for innovators: no phone, no e-mail, nor even a snail mail address. Message? “We already know everyone we need to know. The rest of you, go away.”

Jack Nicas published a superb article (Silicon Valley Stumbles in World Beyond Software: Google parent’s struggle to launch a delivery-drone business is part of tech’s broader problem with physics; no space elevators or jetpacks) that helps explain why Google is struggling to significantly improve the real world and why they are flush with cash but not flush with groundbreaking ideas that can be turned into practical real-world products that fulfill Larry Page’s toothbrush test: a product or service people need and use frequently.

Google has yet to achieve Sergey Brin’s “goal … to make sure that people found exactly what they wanted in the first link they get.” Their other cofounder, Larry Page, admitted “You may think using Google's great, but I still think it's terrible.”

He is correct. Google delivers not the information users want but a virtually endless list of GUESSES they must manually sift through—first on Google, then scouring the pages linked to. I had a hunch I could deliver much better search results, spent months coding to test my idea, and found that it worked wonderfully by itself and could be seamlessly integrated into search engine guesstimates to make them markedly better with a wheat-to-chaff ratio considerably above Google, which has benefited from people assuming the wheat it delivers is the best possible, which it usually is not.

Prioritizing risk

Influencer Jigar Shah made a superb observation, writing:

“25,710,231 Americans died from 2005-2015. 6,082,045 died from heart disease. 5,857,523 died from cancer. 71 were killed by terrorists. Yet America spends more on terrorism than preventive medicine...”

During my years as an ER doctor, I saw many people die, mainly from heart disease, cancer, automobile accidents, gunshot wounds, and stabbings (I primarily worked in Detroit and Flint, both of which were then the Murder Capital of the United States or darn close to it).

Obesity fuels heart disease, stroke, and some types of cancer. Obesity stems from a lack of physical activity, but even folks who exercise don’t fully erase the dangers of an otherwise sedentary lifestyle, as countless studies suggest (a few references: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27). Obesity also stems from eating too much, but even if you don’t, you almost certainly won’t escape the consequences of eating the typical American diet. Apart from obvious junk food, most of what is consumed is garbage that no one would give to a pet unless they were woefully ignorant or cruel. Yet we feed it to ourselves and our kids, then wonder why healthcare is so expensive and why so many lives revolve around it.

I have solutions to all of those problems, integrating exercise into lifestyles in novel ways and enabling people to enjoy food that is just as tasty as what they now eat and drink (or even much yummier) yet is equally convenient, just as affordable (or even less expensive), markedly better for health, and loads more fun.

The success of the Internet largely stems from our fascination with clicking buttons and getting instant feedback. Folks love interactivity, and they love food. I figured out how to make food preparation interactive without large robotic chefs. I made one years ago but it is now collecting dust because I developed alternatives to disrupt it, transforming food preparation in ways I couldn’t imagine after years of pondering that topic. Then a eureka aha moment flashed into my mind. Months and many successful prototypes later, I have a system of food preparation and consumption that is well beyond The Jetsons.

Another solution to obesity was creating a safe way to quell hunger that enabled me to go from being so fat I couldn’t see my feet when I stood up to having a 30-inch waist. My method is entirely legal, practical (requires no willpower & VERY low cost) and healthy (no drugs, herbs, or surgery).

I also prototyped a way to prevent most automobile accidents and reduce the severity of others so people can walk away from most collisions instead of leaving the hospital unable to think, walk, or look in the mirror without wanting to cry.

As Mr. Shah indicated, these problems stem from us pouring resources into a problem (terrorism) that almost certainly will not kill us while ignoring ones that almost certainly will. I can’t speak for other nations, but in the United States, what passes for preventive medicine is pathetically inadequate, more perfunctory than effective even when it addresses a problem and with it totally ignoring 99% of ways to help people feel better physically, think better, and enjoy better moods more often.

Another irony: most doctors know little or nothing about genuine health (instead of using drugs and surgery as figurative Band-Aids), enhancing brainpower, or uplifting mood: if they did, I wouldn’t see so many doctors who are so unhappy—they don’t just LOOK that way, they ARE that way, I know from speaking with them. Physician, heal thyself. They can’t, but they want patients to think they do. When I see overweight doctors counselling patients on weight loss, I don’t need to bite my lip to keep from laughing because it is a deadly serious matter.

The problem is that most doctors do not possess sufficient doctor-level knowledge, nor can they logically connect the dots. Few have the time to do what I’ve done: spend years (sometimes thousands of hours per year) reading research, largely conducted by university PhDs and MD/PhDs who’ve taught me countless things I would have given my right arm to know decades ago, such as a surprising way to boost mood with a surprising side effect: it enhances creativity. Rarely does any of this info filter down to most physicians and others, who suffer because of it. They pay for this research via taxes and tuition but don’t benefit from it.

Heart disease and cancer also stem from pollution, which I addressed in separate inventions: one targeted at engine exhaust, one reducing the need to burn fossil fuels (modifying my clothes dryer so it heats without propane, natural gas, or electricity), and one that eliminates the need for an engine.

To do the latter (a common lawn care task that is now typically accomplished with 4 – 35 horsepower engines), I invented a way to do it so much more efficiently it can be performed just as well without an engine, and hence without pollution, noise, dust, fumes, and regular maintenance. Turning that idea into reality took a year of building prototypes and seeing some fail miserably until I figured out how to do it, building more prototypes to prove it. I took videos of them working (destroying a camera in the process when wind toppled one on a tripod!) that I enjoy watching because they quickly and convincingly prove that my method works very well.

Google’s (Alphabet’s) GV and other venture capitalists would love to back such a product, but their networks don’t include people who know how to do it. I do. To my knowledge, this is the first time in history that something without an engine or motor can outperform today’s best machinery costing thousands of dollars. That’s a breakthrough, but breaking through the wall many VCs erect around themselves is even more challenging.

I sold some of my inventions to a company led by a friend of Bill Gates—a company that internally brags it hires only the smartest Ivy League graduates paid me (as an independent contractor) month after month for years for my ideas, but less than 1% of them; they’re not large enough to digest the others, and I know them well enough to know in advance what might interest them. Anything to do with lawn care—I wouldn’t bother mentioning it to them.

Likewise, other investors have their pet interests. LinkedIn could make it remarkably easy to find who is interested in what, but their networking system is archaic; its feeble “who you know” method does not capitalize on the power of computers.

Investors and CEOs I’ve known live in rarefied worlds. Their wives aren’t fat, so obesity doesn’t seem like a pressing problem to them. Let someone else solve it.

Their private chefs use only the best organic ingredients, so they don’t understand why others cannot avoid the processed crap that fills grocery stores and why average folks don’t have the time or energy to prepare healthy meals. It’s not a problem for the elite, so let others die from it.

They don’t perform their own lawn care, so they can’t imagine why anyone would care enough about it to make it much easier, safer, and more pleasant. Let others struggle and suffer.

LinkedIn leaders aren’t struggling to find a job, so they can’t understand why so many LinkedIn users are so fed up with this site.

“In a mission statement published on Andreessen Horowitz’s website, Marc Andreessen claimed he was ‘looking for the companies who are going to be the big winners because they are going to cause a fundamental change in the world.’ The firm’s portfolio includes Ringly (maker of rings that light up when your phone does something), Teespring (custom T-shirts), DogVacay (pet-sitters on demand), and Hem (the zombified corpse of the furniture store Fab.com).” — Sam Biddle in Silicon Valley Is a Big Fat Lie

Biddle added that “it’s wasteful and genuinely harmful to have so many people working on such trivial projects … no prior cohort of rich pricks have fooled themselves, and the rest of us, so thoroughly.”

“… technologists have diverted us and enriched themselves with trivial toys, with things like iPhones and apps and social media, or algorithms that speed automated trading. There's nothing wrong with most of these things. They've expanded and enriched our lives. But they don't solve humanity's big problems.” — TED talk Can technology solve our big problems? by Jason Pontin, editor-in-chief and publisher of MIT Technology Review

“My friends are people who like building cool stuff. We always have this joke about people who want to just start companies without making something valuable. There's a lot of that in Silicon Valley.” — Mark Zuckerberg

A final irony: those who could benefit the most from this article are the least likely to read it. They already know everything and everyone they need to know—they think. Thus intellectual arrogance and closemindedness are more deadly than terrorism, which kills considerably less than 1% of people while almost everyone dies from problems that investors ignore so they can focus on the silly websites, apps, and digital gizmos that now passes for innovation.

It is now Christmas Day, so I will make mine merrier by getting back to work on an invention.