I have talked before about how it is far cheaper to build stuff today than it was previously: languages like Ruby, dev environments like AWS, and tools such as Github and Basecamp allow small teams to develop great products for thousands of dollars instead of millions of dollars.
Also, we have talked about how marketing has gotten a lot less expensive for many companies also. The tools of social media and the ease by which a meme can be spread have never been better.
All of this is great for early stage venture capital. It used to be that they had to write huge checks to fund product development and marketing expenses. Now they can write smaller checks.
But I am here to tell you that there is even better news. The growing science of customer development and lean start-ups has led to start-ups that are out-and-out better. The odds of start-up success are simply higher than they used to be. Start-ups have a better idea of how to build a product that customers want. Plus approaches like scrum and agile have increased the velocity at which great products can be built.
Of course, competitive risk continues to be an issue, but as entrepreneurs systemically work to decrease risk in businesses, investors reap the benefits!