In its first 2 years, Google made no revenue. Did this indicate it was a bad idea to invest or work there?
We spent the summer in Y Combinator, and one of the main things we learned about is how Y Combinator identifies the best startups. What we learned made me worry that many in the effective altruism community are taking the wrong approach to evaluating startup non-profits.
In summary, I’ll argue:
- There’s two broad approaches to assessing projects – the marginal cost-effectiveness approach and the growth approach.
- The community today often wrongly applies the marginal approach to fast growing startups.
- This means we’re supporting the wrong projects and not investing enough in growth.
At the end I’ll give some guidelines on how to use the growth approach to evaluate non-profits.