Hmm. This argument seems like it only works if there are no market failures (i.e. ideas where it’s possible to capture a decent fraction of the value created), and it seems like most nonprofits address some sort of market failure? (e.g. “people do not understand the benefits of vitamin-fortified food,” “vaccination has strong positive externalities”...)
Yeah, that seems right to me, and is a good model that predicts the existing nonprofit startup ideas! My point is that it seems like a very narrow slice of all value-producing ideas.
To the extent that markets are efficient, that narrow slice is the only slice available (since the ways of creating value for which you can easily be paid have already been exploited).
(This is one reason why I personally am usually more excited about nonprofit startups: the low hanging fruit is usually picked in the for-profit world, but there’s a lot more remaining in the nonprofit space.)
Agree that if you put a lot of weight on the efficient market hypothesis, then starting a company looks bad and probably isn’t worth it. Personally, I don’t think markets are efficient enough for this to be a dominant consideration (see e.g. my response here for partial justification; not sure it’s possible to give a convincing full justification since it seems like a pretty deep worldview divergence between us and the more modest-epistemology-focused wing of the EA movement).
Hmm. This argument seems like it only works if there are no market failures (i.e. ideas where it’s possible to capture a decent fraction of the value created), and it seems like most nonprofits address some sort of market failure? (e.g. “people do not understand the benefits of vitamin-fortified food,” “vaccination has strong positive externalities”...)
Yeah, that seems right to me, and is a good model that predicts the existing nonprofit startup ideas! My point is that it seems like a very narrow slice of all value-producing ideas.
To the extent that markets are efficient, that narrow slice is the only slice available (since the ways of creating value for which you can easily be paid have already been exploited).
(This is one reason why I personally am usually more excited about nonprofit startups: the low hanging fruit is usually picked in the for-profit world, but there’s a lot more remaining in the nonprofit space.)
Agree that if you put a lot of weight on the efficient market hypothesis, then starting a company looks bad and probably isn’t worth it. Personally, I don’t think markets are efficient enough for this to be a dominant consideration (see e.g. my response here for partial justification; not sure it’s possible to give a convincing full justification since it seems like a pretty deep worldview divergence between us and the more modest-epistemology-focused wing of the EA movement).
That makes sense, thanks!