TED2009 Part VI - The rise of the Non-Profitable Startup

Robotics was one big trend I picked up at TED. The other was the huge numbers of people starting "not for profit" entrepreneurial startups, foundations etc in all sorts of areas where once you may have expected "for profits" to emerge. I started to think why this may be the case, and I must admit I haven't done too much research but here are some hypotheses:

- It is easier to start a non-profit, they have less onerous reporting requirements

- It may be easier to raise capital - there were some Very Rich Foundations at TED, and the number of "VC's are bust" conversations was worrying

- Tax treatment for givers may be better for funders?

- Its easier to attract and retain and motivate - especially young (cheap, even free) staff

- There is easier market penetration for new stuff, especially "social" mediums - more trust, less cynicism

- Most startups don't make money anyway, why not just accept it

The issue apparently comes after about 3 years, when the original aims have been achieved (or not), the original funders are on to their next gig, and now its time for (non profit) business as usual. On Saturday night I met a person from a team of "Not-for-profit Turnaround" specialists who were flying into Long Beach to sort out a program there.

Still, looking at the UK Quango game, I like this idea as you get competition in the Not For Profit / NGO area. Many of the people I met at TED doing these things were very smart, whereas to be frank many of the UK Quango heads are in a Buggins' Turn game and are there via contacts, not competence. If I had a Big Idea from TED, it would be to introduce this from of NGO/NFP competition into the UK.