Again: the winners have to pay for the losers. The unusually large successes are what makes the model work. I'm sure they're pushed past the point where they need to go to be economically viable, but by the time you've reached that scale, you're already out of the "mid-market" bracket.
Right, where I think you're seeing pushback is on the idea that you can reasonably get anything resembling 9/10. Think about what that's saying: we're talking about businesses doing 8 figures of annual revenue. If there's a playbook for reliably creating those --- "reliably" meaning "you can build a portfolio of them run by different people serving different markets, and make money" --- what is that playbook? Getting a 10MM/yr company off the ground is not a small achievement.
Bear in mind also that as you scope down the size of the companies you're starting, you necessarily also have to scope down the investment (these companies have, obviously, much smaller valuations, meaning $1MM of equity buys a much bigger chunk of the company). But companies today take A-B-round-scale investments to get to 8 figures ARR. You get those investments by targeting a much, much higher ARR.
This thesis doesn't hold up for me, I feel like I have to be missing something.
Choosing safer paths does not bring you from 1/100 of success to 9/10 - perhaps it brings you to 3/100 or 1/10, but at that level you still have to have the winners making it very big to pay for the losers.
If you’re able to pick successes with 90% accuracy at the stage where they’d benefit from this level of investment, I’d like to borrow your crystal ball.
