High-level thoughts on having the most impact with a company

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I decided over December that at some point during my life, I want to start a company.

How should I think about “return on investment” from an EA perspective when starting a company? Here is my thinking, very quickly sketched out.

  • What matters is how much “good” the company achieves achieved per “input”

  • The main sources of “good achieved” are:

    • direct impact on customers and suppliers

    • potential for profits of company to be donated

    • contributing to economic development via

      • job creation

      • skill building of employees

      • ecosystem development (e.g., building a startup ecosystem in a place like Kenya, building expertise in chip manufacturing in a place like the US)

      • bringing in foreign exchange

    • potentially other externalities (e.g., a green company having positive environmental impact)

  • The main “inputs” are:

    • My own time and energy relative to whatever else I could be doing

    • time and energy of my coworkers

      • → not too worried about this. The supply of talent is elastic

    • any capital the company takes

      • → supply of capital is elastic too. so don’t worry about this

My conclusion: Go for the company that does the absolute most good possible. Don’t worry hogging talent or capital because those are elastic, and more will be generated.

This means one of two things:

  • If your main source of impact will be making money that you donate, then your goal should be maximizing shareholder value (2)

  • Otherwise, your goal should be to make the biggest company you can (3), so you positively effect the most customers/employees/partners

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  1. both very squishy but useful concepts for the purpose of this exercise

  2. this also applies if you are taking a profit for good approach

  3. with the caveat that you don’t drift away from whatever it is that is driving the impact