I think you are being overly harsh. Having $10,000 in free money to spend doesn't seem like such a bad problem to have. It's not clear they are wasting time or money,
If the grant was easy to apply for, I don't fault them for not having a plan of how to spend the money they didn't yet have. (I do fault the grant granting people though. Shouldn't "what are you gonna do with it?" be a major factor in picking the grant recipients?)
EDIT: forgot to add: to the OP, I'll Nth the concept of spending a big chunk of it on customer acquisition or field testing your MVP. Buy traffic you can convert to paying customers (or failing that, names and addresses of interested customers).
The HN set may not want to accept it, but in the real world, when somebody trying to build a business doesn't have any clue as to how to allocate their resources, it's a huge red flag. Period.
I don't think I used the terms "app" and "startup" interchangeably, I was specifically trying to distinguish "profitable business" from "webapp".
Also, we've all got our pet definitions of words, and HN does around words like "startup" in particular, but HN mythology notwithstanding, any new business is by definition "starting up". Even under the "compress your working life into four years" notion that is popularly tied to the word "startup" here, I'm not sure how "single founder" implies "not a startup."
Hope that doesn't come out wrong. I sincerely appreciate your feedback.
If the grant was easy to apply for, I don't fault them for not having a plan of how to spend the money they didn't yet have. (I do fault the grant granting people though. Shouldn't "what are you gonna do with it?" be a major factor in picking the grant recipients?)
EDIT: forgot to add: to the OP, I'll Nth the concept of spending a big chunk of it on customer acquisition or field testing your MVP. Buy traffic you can convert to paying customers (or failing that, names and addresses of interested customers).