The Y Combinator Problem
I thought I'd see if anyone had thoughts on this. This is a slightly modified version of something I wrote in response to Umair Haque's recent article discussed here: http://news.ycombinator.com/item?id=203400

In order for any of the other hacks Haque is concerned with to work, someone needs to hack the VC system and the networking system. Here is why hacking the VC system is essential to get any of these other large scale hacks to work.

The incestuous networks that surround most VC culture and the amazingly stupid way people pitch to VC's almost guarantees that no interesting solutions are funded. Trying to fit the correct solution to a huge problem (or even an adequate discussion of the intricacies of the problem necessary to understanding it well enough to evaluate the idea) into a VC pitch is impossible. Any presentation that attempts it will be a wreck.

I propose we call this the Y Combinator problem(1). These people turn solving the worlds problems into a game show that guarantees no deeply needed ideas get through or are discussed seriously. The idea that an idea without implementation is worthless kills innovation and is deeply flawed. It's true most of the time, but, it's not true in exactly the most important cases where the ideas involve solving a huge problem. Trying to fit a deeply needed solution to a huge problem into a pitch to a VC is like asking a potential Tolstoy to pitch "War and Peace" as a Haiku (2). The complexity of the problems that most need solving guarantee it is impossible to pitch them in ten minutes or a couple paragraphs of text.

Indeed, the truth reveals itself that most VC's are satisfied with this good enough system and are not interested in putting the effort to get the best ideas and support them however needed, to solve the biggest problems. If they would they would apply a fractional percentage of the effort they put into paperwork into refining their fatally flawed process, the other solutions would just fall out of that. In fact, it is obvious that they actively inoculate themselves from the best ideas.

It's exactly parallel to what happened in physics between Einsteinin and Newtonian conceptions of physics. The Newtonians were right enough to be right most of the time, and they were happy to just keep on doing newtonian physics. But the world isn't like that, and there are problems they will never even possibly solve.

Also, you must take into account the personalities of the people prone to solve these problems. The same obsessive interests, divergent thought processes and lack of social ability that makes for the most creative problem solvers makes these people unsuited to implement their ideas in the real world (in the same way that Einstein did not do the experiments to confirm his theories and got help with math. A quote: "Do not worry about your difficulties in Mathematics. I can assure you mine are still greater.").

If you are serious about getting the best answers to the big problems, you need to remove the barriers to entry for the kind of people who solve the biggest problems, and create a channel for them to pitch. You want people who think in pictures or paragraphs or kinesthetic sensations (for example, Einstein said he thought with his muscles, and that violin playing related to problem solving). VC's should solve the Y combinator problem by creating a way for people with big solutions to huge problems to pitch their idea however they think it should best be pitched (have them write or show, then give the good ones coaching and whatever types of help they need, and find businesspeople who actually want to work with the best ideas to manage the rest.) You need the philosophers and visionaries that are excluded by the design of the good enough system that ends up calcifying it's mediocrity into the economy.

Until someone solves this fundamental issue, none of the other big problems with will be funded as easily as myspace apps to sell ads to 15 year old girls.

Solving that problem is the best way to start hacking the industrial economy because it will unleash a torrent of creativity that has been restrained by illogical restrictions that cripple the people historically shown to be most likely to solve the big problems.

(1) As someone or another I read said about Cory Doctorow, Please don't read this as I have a problem with Y combinator. I don't. I have a Y Combinator problem
(2) How about:
five hundred people /
blah blah blah blah blah blah blah /
Thank God it's over

See. It would never get through.