> "Never invest in a business you cannot understand."
Which suggests a #10 on the OP's list: investors don't understand technology very deeply or widely. The last boom was the web, so we have an over-population of investors who understand the web (to the extent that they "grok" any tech at all).
MVP and user traction makes a lot of sense for web startups. Web startups are low-capital, in many cases so low capital that they can be funded by someone working on the side as a Starbucks barista. It's popular because a tiny team or even an individual can often build something minimal, get traction, and then make what amounts to a gigantic ROI. Imagine said Starbucks barista doing a proof-of-concept that gets a million users... the ROI there for the individual is insane (like thousands of percent), and the potential ROI for the investor is quite large as well. Web startups generate a lot of very real rags-to-riches stories.
But this formula simply doesn't translate to anything that is at all capital intensive. Basement hackers are never going to prototype new mass transit solutions, try to mine asteroids, design 3d printers to print human organs, or build a fourth-generation molten salt reactor. Not gonna happen.
Which suggests a #10 on the OP's list: investors don't understand technology very deeply or widely. The last boom was the web, so we have an over-population of investors who understand the web (to the extent that they "grok" any tech at all).
MVP and user traction makes a lot of sense for web startups. Web startups are low-capital, in many cases so low capital that they can be funded by someone working on the side as a Starbucks barista. It's popular because a tiny team or even an individual can often build something minimal, get traction, and then make what amounts to a gigantic ROI. Imagine said Starbucks barista doing a proof-of-concept that gets a million users... the ROI there for the individual is insane (like thousands of percent), and the potential ROI for the investor is quite large as well. Web startups generate a lot of very real rags-to-riches stories.
But this formula simply doesn't translate to anything that is at all capital intensive. Basement hackers are never going to prototype new mass transit solutions, try to mine asteroids, design 3d printers to print human organs, or build a fourth-generation molten salt reactor. Not gonna happen.