Everyone is convinced -- because the people who work in marketing are happy because they can sell ads -- that social media is an important thing. It is not.
Social media is people doing what they were already doing, only more often and anywhere. Flirting with girls, talking with friends, etc. Making these activities digital is not changing society or improving lives. It is the same society and the same lives, with more time spent on these activities. Never has anyone gone to bed thinking "Gosh, I wish I had spent more time looking at funny pictures of strangers today." People often go to bed regretting not doing what they could have done when instead they were on Facebook and Twitter and [insert the names of 90% of the startups you have heard of].
Every founder will go on and on about "changing the world" if you let him. This is as if changing the world were something worth doing for its own sake. If you see a problem that is worth fixing and you fix it, then the change effected is important and even virtuous. But the key is that problem must be worth solving. Just because a petulant and spoiled American wants his iced mocha faster does not mean that speeding up sales of mocha is a worthy problem. Can you make money doing it? Probably.
I went to school to become an engineer (I'm 24) because I thought that computers and the internet were going to make invention and innovation possible even for people who did not work for industrial laboratories. Maybe the hugely reduced barriers to entry into the technology sector that resulted from cheap computers and good programming tools would lead young and eager people of brilliance to found ambitious companies to finally -- aren't we all sick of being exasperated by the mediocrity of culture and politics in the past 20 years? -- steer human life into better modes of existence and a new frontier of boldness. Sure, the internet cannot do this all on its own, but is such a powerful and promising tool, that maybe it would start things.
This has not happened. There are a few gems like SpaceX and Willow Garage that seek out challenge in this way, but they are doing it independent of the cheapness and openness that computers now allow. Worse, many of the companies that have been founded are dedicated to aggressively ruining the internet by making it a place for sucking up private information, showing ads, and selling the same old useless junk.
What it seems to me this article is about is that innovation in technology right now is about money, not about betterment. A billion dollars was just spent on Instagram. To do what? If you are so in the bubble of the "startup world" that you do not see the self-evident absurdity of a situation in which that is a possible and reasonable event, you are become blinded.
Stop thinking like a marketer and think like an inventor with balls. Stop trying to get rich unless you are getting rich by doing something that is worth doing.
I write this as someone who honestly loves technology, hacking, the hacker ethic, and HN, but I walk around Palo Alto every day being slowly crushed by disappointment. The problem is not that the good hackers are being spread across too many companies, it is that too many companies are not doing things worthy of hackers.