EA startup—non-profit sustainable marketplace

[Vincent van der Holst]

TL;DR: I’m building a marketplace that donates all its profits to EA causes. It’s early stage but growing fast. What do you think about this direction? Sharing with relevant people would be appreciated, thanks!

Idea

BOAS (website: boas.co) is the online marketplace where everything is sustainable—the products and how we operate. We give away all our profits (at least 5% of sales) to effective charities. It’s a business model we call profit for non-profit (basically earn to give on a company level), and with that model, we want to show that businesses can be good at scale. Our mission is to grow the largest online marketplace, with the smallest possible footprint and the highest possible impact on people and the planet.

Potential impact

• The sustainable e-commerce is a huge market (1 trillion and growing fast)

• Few players will own most of it

• Let’s be one of those

• And donate all profits

Expected Revenue if this works

If we become the biggest sustainable marketplace in the Netherlands, we will have more than a billion in revenue, and if we manage to take over Europe that number is much higher.

How much will be donated if this works?

• 100% of profits will be donated

• Profits will be at least 5% of sales

• = donate billions each year

We intend to give away all of those profits, but at least 5% of sales. If it operates based on our business model, the biggest sustainable marketplace in the world will be able to donate billions to EA causes each year and become the biggest donor worldwide.

Expected Value (taking into account chance-of-success)

At 0.1% odds of becoming the biggest marketplace in NL, the expected value is 1-2 million euros in donations to effective charities

At 0.01% odds of becoming the biggest marketplace in Europe, the expected value is 3 million euros in donations to effective charities

At 0.01% odds of becoming the biggest marketplace in the World, the expected value is 24 million euros in donations to effective charities

Progress so far

Launched in January and 70% monthly unique user growth, currently at ~400 unique users per month

Talked to 100+ consumers and 25 brands

First 3 brands signed

Team is now CEO, CTO, 3 interns and 2 advisors

Looking for funding

Reduce uncertainty—what would it take?

We need funding (30-50k USD) to show steady growth in brands signed up (100) and sales (1000 customers) until the end of 2022.

That will validate the business model assumptions and the market for this product, as well as validating that brands and customers care about the non-profit route we’re taking.

Counterfactual

I could earn to give (corporate job)

I could start a for-profit and do the founders pledge and earn to give

I could work on EA charity idea

I could work at an effective non-profit

Why it might fail/​negative outcomes:

• Any money donated can’t be used to grow the marketplace to become one of the biggest ones

• Non-profit might not be a big enough unique selling point for brands and customers to flock to the marketplace

• We’re unsure if a non-profit business model can receive the amounts of grants/​funding needed to become a big marketplace

Questions

• Considering the counterfactual, should I build this?

• Why is this idea going to fail?

• Do you think EA should invest in this? Why yes, why not?

• Do you know someone who would like to work on, advise on or invest in?

[MathiasKB]

I don’t think the EA community is uniquely suited to answer your question. Whether this is a great startup idea or not is difficult for me to figure out and I think speaking to people in the startup and venture-capital community will get you better answers.

I think your counterfactual will likely be much higher if you do direct work, by starting a new EA charity or an effective non-profit than it would be by earning to give. Consider spending some time figuring out exactly what direct work would imply. 80K might be willing to provide advice on that as well. With a clearer picture of the counter factual you will be able to better decide if this opportunity beats it.

All things considered, I think your idea sounds pretty exciting. Your blogpost on climate change and having children is phenominal and I’m planning on sending it to friends and family any time the topic is brought up. If every other aspect of the business is executed as well as that blogpost was written I have high hopes!

[Vincent van der Holst]

Hi Mathias,

Sorry for missing this (have turned email notifications on my post on now).

I agree that the EA community is not suited to evaluate the idea. VC’s are, but they seek an ROI so they might like the idea so won’t fund it. Based on the talks we had so far I’m pretty sure this idea would receive seed funding if it could provide ROI.

Over generalizing here, but the EA community or wealthy EA’s can fund it, but not evaluate it. VC’s can evaluate it, but can’t fund it. Is it a thought to see if we can combine the two somehow? EA works with investors that can evaluate profit for non-profit ideas and if they think they have potential EA can fund it?

I have researched counterfactual (spoke to 80K and Charity Entrepeneurship) and I do not believe it’s much higher (or higher at all) for me. The odds of success of this endeavor are low, but the potential profits we can donate to effective charities are huge.

P.S. great that you like the blog post and sharing will help us!