bingo. to first order it's a winner take all game. it doesn't matter how much cash the VCs need to pay to start one of these contraptions. what matters is that the contraption succeeds.
if the chance of success is 0.01% in SV, but it's 0.0000001% in Austin, it doesn't matter at all if the costs are 10 times as much in SV. VCs are not starting companies to save cash. they're starting companies to dominate an industry. so they buy the biggest guns and it doesn't matter how much they cost.
bingo. to first order it's a winner take all game. it doesn't matter how much cash the VCs need to pay to start one of these contraptions. what matters is that the contraption succeeds.
if the chance of success is 0.01% in SV, but it's 0.0000001% in Austin, it doesn't matter at all if the costs are 10 times as much in SV. VCs are not starting companies to save cash. they're starting companies to dominate an industry. so they buy the biggest guns and it doesn't matter how much they cost.