Big problems are problems for a reason – they are problems that are hard to solve. If there was an easy solution, one of the thousands of ambitious, smart engineers out there would have solved them by now. So instead of solving big problems, the smartest, most creative brains in Silicon Valley are building apps to help us organize group lunches, share funny photos, or aggregate daily deals. I’m sorry, but these aren’t the big problems. In fact, most of these new startups are creating more problems than they solve.
Anyone who takes a five minute break from Words With Friends knows the world has big problems, and many of the solutions involve organizing information – the techie entrepreneur’s forte. Many of the things we need are pretty basic:
- I need to be able to log into a secure web portal and see my medical records, what immunizations I’ve had, who my doctors have been, my insurance information, and I need to be able to share this if I change doctors. Instead of filling out the same form for 30 minutes every time I enter a doctor’s office, I need to talk to a real person about my health problems and keep track of how I’m solving them.
- I need to be able to see my employment and tax information in much the same way – I need to see my salary payments, deductions, PTO, employment contracts, pension information, and I need to be able to print my W2 when I lose it. And I need this same system to work even if I change jobs.
- I also need a government site where I can pay my taxes, see my parking tickets, deal with jury duty requests, and see a directory of government services. While I’m at it with the government, I need a centralized place where I can store my birth certificate, business registration documents, and my will.
These solutions are straightforward database driven websites – there is no complex technology involved. So why am I still receiving cryptic medical bills in the mail, or spending hours waiting at the DMV for basic government services, or calling five people to figure out information I need to file my taxes? Because startups can’t solve these problems.
Most of these problems are created by poor governance – rules that are supposed to help but end up making things worse. The economy is so bogged down with rules that we end up creating industries to solve them (read: “tax accountants”) – when a simple portal could do a better job. Privacy concerns are overrated; the real reason startups can’t solve these issues is that the government has set up elaborate webs of rules to protect interests that are vested in doing things wrong.
Could a startup really tackle medical payments? Could they deal with the plethora of agents, contracts, rules, and regulations? So far, the answer is no. Payments are ruled by insurers. Insurance is highly regulated – there are no new entrants. Current insurers have no reason to innovate. Consumers don’t even really get to choose the insurance they get. No startup can really shake things up in this type of environment – what customer would take a risk on a sleek, simple web portal when there are so many complex legal and systematic issues involved?
So who can solve the big problems? Ultimately, it has to be big companies and the government. If Anthem / Blue Cross really wanted to make things more transparent, they could do so. The problem is that they don’t have to and probably don’t want to. And these problems are unlikely to be solved anytime soon.
Looks like I have to go pay bills now. I better get some more stamps.