It feels odd to call this a startup instead of a charity or non-profit. The normal goals of a startup vs a charity, which seems a better description for the things this company/group is doing, don't match well to me (edit in italics: forgot to finish writing this sentence). Nothing particularly wrong with calling it a startup I guess, just strikes me as odd.
This seems to be part of a larger turn towards more data and study driven aid than was the standard. Hopefully the larger nation state players can get around to using aid programs to reap longer term improvements vs the current short term and occasionally overall harmful effects some programs have been reported to create.
"Startup" by its very definition is simply a company in its early phases. Whether it's a for-profit corporation or a non-profit corporation, the challenges, at a high level, are largely the same. At a lower level, they vary just as much between for-profit and non-profit as two for-profits in different industries vary.
I don't buy that definition. I prefer Steve Blank's suggestion that startups are companies set up to identify repeatable and scaleable business models. This could extend to a charity as easily as any other kind of business.
That's the Valley redefinition of a startup. You don't need rapid growth to be a startup. "A startup company or startup is a business in the form of a company, a partnership or temporary organization designed to search for a repeatable and scalable business model."[0]
Nor do you need to be a for-profit business to seek rapid growth. If we're going to measure based on "rapid growth", GiveDirectly has been a far more successful startup than most YC companies.
Not at all. There are clear examples of when rapid growth has been neither repeatable nor scalable and the companies had to fold precisely because they grew too fast.
Backblaze is a great example of a company that could not have grown any more rapidly than it did. If they had, they would not have been able to source enough drives to continue and would have been faced with some difficult decisions.
Rapid growth is a great goal in some industries. But in others, a long, slow ramp up is better. That doesn't mean you can't have startups in those industries.
If a company isn't seeking (relatively) rapid growth, it doesn't need a scalable business model.
That's why the local pizza join that just opened isn't a startup. They might be new, but they have no plans for innovating on their business model to reach larger scale.
I see nothing in the words "repeatable" or "scalable" that has to mean "rapid". To me a repeatable and scalable business model means one that can grow, and that isn't a one-time opportunity.
I guess the word rapid is ambiguous. Most chain restaurants have repeatable and scalable business models and as such count as startups, even if it takes ages for them to reach multinational status. However they're still rapid growth relative to the vast majority of fine dining restaurants that are unusual if they have more than one location. The repeatability and the scalability make them rapid growth because it's the assembly line approach to expanding the business.
What is an example of a repeatable and scalable business that is not rapid growth, relative to other businesses in the industry?
I usually prefer the general, English meaning of a word to apply unless there's a particularly compelling case for abusing the word, or the context conveys that specialized technical nomenclature should be expected rather than the generic meaning. The OP is a news article with a general audience, so I see no problem with applying the generic English meaning of the word "startup", which simply denotes something that's starting. The original English word does not necessarily connote speed.
Why do you think a charity isn't a business? They still have revenues and expenses, employees, marketing, growth, a product to deliver. The only fundamental difference is that their owners don't take dividends or distributions from the business.
I think you are thinking of nonprofit organizations. Charities don't have to be nonprofit organizations[1], and nonprofit organizations are often not charities.
While technically true, for-profit charities are much less common. Moreover, it's just another step along the spectrum, where for-profit charities, unlike non-profits, are allowed to take distributions, but unlike for-profit corporations, have no obligation to create value for shareholders. (Yes, this is also overlooking privately-held companies, but again, they're just another step on the spectrum.)
Regardless, the main point is that charity or not, for-profit or non-profit, they're all still fundamentally businesses and should be run accordingly.
The Oxford English Dictionary defines it more generally: "An instance of ‘starting up’; spec. the action or process of starting up a series of operations, a piece of machinery, a business, etc."
"And despite some skepticism, GiveDirectly's financial support is growing (from $5.5 million in 2013 to an expected $40-50 million this year), driven in large part by younger donors working in tech or finance, according to Niehaus."
My issue with charities being called startups is more in the for-profit vs charitable goals. Companies have goals that just don't jive with the goals of a good charity. If we take a definition based purely around 'designed to grow fast' yes it can fit. There's just more connotation to the word startup than the purely growth based definition Paul Graham puts forward.
addendum edit: There's nothing inherently wrong with the 'designed to grow fast' definition, it just doesn't sit quite right (with me) applied to charitable orgs because of the additional meaning I talked about above.
> We’d been thinking about this for a while. We had a hypothesis that many newly founded nonprofits could benefit from the same techniques we use to help startups. We tested this with Watsi in the Winter 2013 batch and it worked wonderfully. They did all the same things as the other startups, including present at Demo Day (which is after all a room with lots of rich people in it).
> Since some people were confused when we funded Watsi, I’d better clarify that the money we’re putting into the nonprofits will be a charitable donation, rather than an investment in the narrow sense. We won’t have any financial interest in them.
Well, the quoted parts explicitly distinguishes between "startups" and "nonprofits", pointing out the latter may "benefit from the same techniques [they] use to help" the former.
These are very salient points, especially given that right now many of the advancements (from a technical and methodological perspective) established from GiveDirectly's early Kenya and Uganda programs are furthered by a spin-off known as Segovia (http://www.thesegovia.com/product/). Perhaps this is the startup behind the scenes that's more inline with the startups brought up on HN.
> It feels odd to call this a startup instead of a charity or non-profit.
Everybody is spinning their small business or new charity as a `startup`. Maybe culturally they are aligned with startup principles but my idea of startup was a small group of people looking to shake things up (a market, a technology, etc) rapidly, grow fast and cash out.
A guy selling shaving cream on etsy is not a startup by this definition.
I think that's part of it. Working on or being a startup brings a certain cachet to it and is more likely to get media attention vs just being a new small business or new charity. A normal new business calling itself a startup doesn't strike me as oddly as charity based groups. At least with a normal for-profit business the goals are roughly aligned and similar whether you're looking for the explosive growth or long term growth and stability, you're still in it to make money instead of charities which should be operating completely opposite.
This seems to be part of a larger turn towards more data and study driven aid than was the standard. Hopefully the larger nation state players can get around to using aid programs to reap longer term improvements vs the current short term and occasionally overall harmful effects some programs have been reported to create.