The step in that process you left out was "years-long massive earthquake-level crash leading to complete economic collapse of the micro-economy under discussion", the kind where most of the casualties are all the smart non-founders in the industry.
Been there, done that.
The primary reason I'm involved in this community is that I was in London before the first crash. Us internet people had been there for a decade or more, but all the investment money was going to some twat in a suit who had no cocking idea what was going on, or why.
Outside the little Nirvana that pg and company (among others) have created, the same rules apply.
[All of the following may be completely Euro-specific.]
Talentless schmucks get all the money available because they're the {sons|nephews|mistresses|cabana boys} of other people with money, and then try to hire us to fill in the yawning chasms (they call them 'gaps') in their plans.
The only winning move is not to play. Do your own thing, but ferchrissakes don't start working for some family-moneyed fool because "appz R h0tt and we're all gonna get rich". If you're gonna take a risk, at least ensure that the risk beneficiary is you. The one major thing I've noticed in this little playground of ours is this: it's not that you are going to have trouble raising money - it's that you're going to have trouble raising money because you're going to get lost in the deafening noise of trustafarian morons with connections, and they're going to win that funding battle.
That is why we need to play out of revenues and/or do our thing on ramen money: it's because the other method is massively stacked against us, and massively stacked in favour of idiots.
I keep wondering why Jobs keeps pushing HTML5. He too must realize the unsustainability of it all. A collapse has to happen -- and then how many "real" apps will remain for sale? And how many devs will migrate to the web where they don't have to have the approval of Apple or Google or any other hardware maker in order to create and publicize/sell something?
Jobs never liked the idea of Apps in the first place (probably because he knew it was unsustainable); he was fully prepared to go with a pure-webapp strategy until developers revolted. He's probably trying to get back out of that market as quickly as possible.
Is that the case? I thought it was more of an issue of the SDK and the APIs not being ready at the time that they wanted to launch.
I can't imagine that Jobs hates the notion of apps.
On the other hand, I don't understand why anyone involved with the Mac platform, where uniform interfaces are a big deal and microcriticism of widgets is so common, would ever champion the Web as a platform.
But again, just like the dot com boom, once the market has matured to blow away the chaff, what remains will have proven pretty game-changing.