In this talk, Mitch Kapor argues that every startup has social impact and that founders and investors should evaluate whether a company’s impact narrows or widens societal gaps. He defines “gap‑widening” as products that give advantages to those who already have resources (e.g., concierge medicine, high‑priced SAT coaching) and “gap‑narrowing” as solutions that level the playing field (e.g., Propeller Health’s asthma sensor, affordable online degrees). Kapor walks through concrete examples across healthcare, education, and other sectors, highlighting companies he has invested in—Propeller Health, Pigeonly, Regali, Desmos, Plaza Familia, Formlabs, and Uber—explaining how each fits the gap‑analysis framework. He shares his personal journey, noting early nervousness about championing impact, the influence of his wife Frida, and the surprising positive response from entrepreneurs who value impact‑aligned capital. Kapor concludes that impact assessment is nuanced, especially for large disruptors like Uber, and urges thoughtful, comprehensive analysis of both positive and negative effects.
Chapters
Welcome, thank you so much for having me. Pleasure to be here. I love working with entrepreneurs. It's why I do what I do. And I want to try to give you some perspective on the social impact side of startups. It's kind of a term that is kicked around a lot and We have some very specific ideas about what we mean when we talk about social impact, and I wanted to share those with you. There's a kind of view, conventional view, maybe even a little bit old-fashioned, that says, well, look, there are real startups that are the hardcore kick-ass startups, and then over here there's some territory of do-gooders who are trying to make the world a better place, and they have some sort of social enterprise, and And maybe some of those are actually going to do some good in the world, but they're certainly never going to make a lot of money the way these hardcore kick-ass startups are going to do. So that is not the perspective from which I operate. It is that all startups actually have social impact. They do things. Their products have value or don't have value. Some of the impact is what we call gap widening, and some of it is gap closing. I'm going to give some examples in a minute, but I mean, having a level playing field in life is something that is aspirational for societies, but really no country genuinely has a level playing field in terms of access access to basic services, to education, to health, to give everybody a chance to make something of themselves. And we're interested in startups that are gap narrowing, that tend to make the playing field more level as opposed to more tilted. And this is a very practical consideration, so let me just go right to some examples. 'Cause you might think, well, okay, social impact, so that would be things like in healthcare and education, and if you're doing a tech startup there, that's social impact. And we go, not quite so fast. 'Cause we do this kind of gap analysis. So let's take a look at healthcare. We've seen some very interesting plans that have creative leverage of information technology in the service of Concierge medicine. Concierge medicine means where you pay a significant monthly fee above and beyond what your health insurance covers, if you can afford it, and for that you get hot and cold running physicians and other types of health professionals 24/7. We would say that a successful concierge medicine startup is actually a gap widener, not a gap narrower, because it means people with the means are going to be able to get even better healthcare. Than everybody else. On the other hand, we actually did make an investment in a company called Propeller Health, used to be called Asthmapolis, that makes a wireless sensor that does, uh, uh, it's used on an emergency inhaler that people who have asthma carry around with them. And when you, uh, spray it, in addition to delivering the medication, it sends a message up to the cloud. Who you were, where you were, and when it happened. That information is then used in a variety of ways, but typically it alerts your healthcare system that, uh-oh, this person all of a sudden is beginning to use their emergency inhaler not just once, but twice or three times, and they intervene. They may call you, they may check in with you, because it keeps you out of the emergency room or out of the hospital. And When they deployed these in tests, they found that it actually wound up producing better health outcomes, better management of people's chronic asthma because it kept them out of the ER, but it also saved money. And it saved money for health systems that are bearing their own costs now, increasingly. So that's in the sweet spot of impact. It's gap narrowing. It's a great business. And it does good in the world. And the same analysis you can apply to things in education. So if you offer personalized SAT coaching where you will match an individual student to an SAT coach with proven results, uh, and you do it remotely, um, and you charge hundreds of dollars an hour, and there are a number of real businesses that do that, and these coaches do a good job, that's another, uh, gap widener between people who can afford to pay for that, and other students from low-income zip codes that can't. Whereas if you can offer an accredited online BA for $12,000, which is total, not per year, not per term, which is a company that we've invested in, that's gap narrowing. So we have a practice that tries to think carefully about social impact and And I will tell you that I was quite nervous when we first started doing this because it's been a gradual evolution. My wife, Frida Kapoor Klein, is really my inspiration around this. We were professional colleagues long before we were a married couple because she came to Lotus in the early days and built the culture. I was the guy who designed the spreadsheet that took us to $200 million a year in revenue in 3 years and 2,000 employees. She was the person who built the culture that still to this day, 30 years later, the people who were there said, this is the best place I ever worked, and I'm carrying the inspiration forward with me. She's been my beacon in this. And when we moved to Silicon Valley in '99 and started thinking about this, and believe me, it was 6 or 7 years before I really bought into it. So my nervousness was it's going to scare people off, that they're going to run the other way. And what I have found, and this has been one of the most surprising things, is that while, yes, a few people run the other way when I start talking like this, in every single audience I've ever spoken to, there's a significant percentage of people that go, Thank God for you, because this is really in my heart. I want to build a great business, but the reason I want to build a great business is to make a difference in the world. And all the advice I've been getting is, don't tell investors about this, because they're not going to like that at all. And when it became clear that this is what we do, all of these fabulous entrepreneurs started seeking us out, saying, I want you guys to invest in us, because we're more aligned than the rest of the valley around us. And so we have terrific and wonderful deal flow and some amazing companies that do things that you just wouldn't believe. Pigeonly, I don't have enough time to go into all this in detail, but did you know that over $2 billion a year is spent by people in prison making phone calls, long-distance phone calls, at $2 to $3 a minute? That is a market ripe for disruption, and Pigeonly is disrupting it. Regali is another great company that is doing a similar thing for very high-cost international remittances. Desmos, if you Google graphing calculator, Desmos will now be the number one result. It's this astounding free graphing calculator with amazing penetration. And Act 2, which is the one where they'll make money, is the thing that's going to be launched very shortly. Plaza Familia, this is a great story. A woman who is an immigrant from the Dominican Republic, a self-taught software developer with a company that does an online math curriculum which is fully in English and Spanish and soon other languages. Aimed at English language learners in school. Spreading first year to several hundred schools and well into the mid-seven figures in revenue. The interesting thing we learned about this, and the great thing, is that when your online curriculum is not just in English, but is also in another language, you know who it's really good for? Not the kids. The kids are learning English quickly. It's for the parents. And if you can loop the parents in, because the parents can actually read what the homework is about and participate with the kids and be part of the educational circle that's supporting kids, you are really helping these English language learners who are the most challenged and lowest performing group in schools. So that's, that is really, it's a kick-ass company. We also look for the occasional unicorn or big disruptor. We were fortunate to be investors in Formlabs, which is making 3D printers. We were one of the first investors in Uber. Now I will confess frankly, this was 4 years ago. We were just getting serious about impact. We knew it was important, but we were nowhere near as crisp as we are now. And Uber, like every other big disruptor, if you look at what its impact is, a huge amount of it is positive and some of it is negative. So among the positives are it— I mean, besides it just being awesomely convenient for consumers, is it literally has created many thousands, if not now tens of thousands, of good jobs. If you ever talk to an Uber driver and ask them do they like it, the overwhelming majority love it because it gives them the flexibility to drive when they want to, which you could not do before. And that means that they could be a parent and take care of kids or go to school and also work on their own terms. Incredibly empowering. Now, if you happen to be an entrepreneur who worked hard, put your money away to buy a taxi medallion in a city where Uber has disrupted the taxi service, the impact is negative. So the takeaway there is when we're out hunting big game, these impact issues are complicated. There's nothing— there's There's no simple formula about it, and in fact, um, it pays everybody to be thoughtful about looking at the full range of impacts if they're going to do something, and the bigger and more disruptive it is, the harder the analysis is.
