The entrepreneur

By · Published September 2014 ·

What do we mean by this strategy?

If you’ve got potential as an entrepreneur, attempt to found new effective nonprofit organisations or innovative for-profits that benefit their customers and create positive externalities.

Why is this strategy promising?

There’s a lot of scope for new high-impact organisations to be developed, but it’s risky to put these ideas into practice. If you’ve got the right skills, then this can be an opportunity to have an outsized impact.

In addition:

  • People who are generally regarded as influential or high-impact have often founded effective organisations. For instance, Elon Musk, the founder of Solar City, Tesla and SpaceX. Within the nonprofit sector, we think founders of SCI and Against Malaria Foundation have had a big impact.
  • Setting up new organisations involves innovation, which is a public good), so it’s difficult to capture the gains for yourself. This means people are likely underincentivised to build new organisations (it’s a market failure).
  • When setting up a new organisation, the chance of failing is high, so people are under-incentivised to pursue it in order to gain personal status.
  • Entrepreneurship is a good way to build career capital, because you’ll learn quickly, and you’ll develop a package of ‘founder skills’ that are highly useful and in-demand.

Which options are best within this strategy?

If interested in entrepreneurship, see our profiles on tech entrepreneurship and founding effective global poverty focused nonprofits.