The Drought of Capital

Entrepreneurs are farmers of ideas.
Farmers who are living in a perpetual drought.
No matter how well we teach entrepreneurship, the drought creates year after year of failed crops.

The fix has little to do with more and better incubators, accelerators, and startups labs.

This drought is the lack of capital to support the existing startups.

Just as we can’t solve a regional drought by trucking in water, we can’t solve the lack of capital from shipping in capital from other regions or countries.

The only reasonable long-term fix is to tap the local aquifer.
In this metaphor, that is the plethora of wealthy and middle class who exist in every city in the world, but who today do not invest in startups.

Teach them how to invest in startups and we end this drought.
Then, and only then will the entrepreneurs thrive. Everywhere.

There are a lot of great posts buried in this blog’s archives that are still quite apt. Today is another reprise, this time revisiting the (often invisible) tradeoff between efficiency and resilience. Last time I explained that tradeoff with the case study of electricity blackouts in Texas and how that related to Google’s monopoly on search and Amazon’s dominance of eCommerce...

The buzzword of 2024 is “AI” and like social, mobile, cloud, fintech, and blockchain, every startup is claiming to have it and every big startup fundraising is claiming to expand what can be done with it. Or in short, we’ve been here before. A Grand Unified Theory of the AI Hype Cycle does a very good job explaining how this will play out in 13 steps, and how it already played...

Who invented double entry accounting? The ubiquitous system of general ledgers, income statements, balance sheets, and cashflow statements found throughout businesses and quite a lot of households? This is yet-another of those concept so taken for granted that they seem to have been around “forever”, but thanks to Double Entry: How the Merchants of Venice Created Modern Finance by...

Many of the everyday details in The Work of the Stock Market told in between the history facts are often just as interesting as the history itself. Case in point, if you read the history of time zones, it seemed like the standardization was complete in the U.S. and Europe by the end of the 1800s. Yet in 1922… The difference in time between London and New York is four minutes and one second...

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