If 90% of startups fail, why would you think winning wasn't mostly chance? Regardless of how many people work hard and grind, you can still fail (and most do, that's just life). Some are more lucky than others, and capital begets capital. Once you've "won" enough, it becomes much harder to lose, even if you make terrible forward decisions and run off the inertia of past wins (Twitter). Bezos built Amazon, but also has sunk somewhere between $10B and $20B into Blue Origin and it is still not terribly successful, for example, and demonstrates that even with resources and skill that success is potentially out of reach.
So, while I think the startup model is a fine way for investors to get exposure to an asset class that is the equivalent of 0DTE options, for the startup ecosystem to enable participants to play in the fiat that falls from those investment decisions, and perhaps some value to be generated, I would hazard that the model would not scale to meet the needs of the aerospace and defense marketplace at this time. All that is needed is skilled engineers and manufacturing practitioners to be enabled to do their best work, while keeping out of their way. Airbus demonstrates this, imho. They employ almost 150k workers, and successfully deliver products to customers that aren't fraught with manufacturing defects. They also have a book of work into the next decade, demonstrating customer confidence in the product and the org.
I don't entirely understand this logic. 99.9% of players that play competitive chess will never make master, but of course nobody would then say that becoming a chess master is just down to chance. What percent of startups are just bad ideas, outright cons, hair brained money-first schemes, or people entering into competitive domains (like eateries) without sufficient skill? IMO you're probably pushing 90% there!
To me the main thing that the failure of Blue Origin demonstrates is that the notion of "business" as some generalizable and all-applicable skill is nonsense. Bezos has done an amazing job of overseeing a digital marketplace, but that doesn't somehow mean he'd be amazing at overseeing an aerospace company. To me this just seems like it should be obvious.
The vision, talent, and other such things are just so radically different. For instance Musk picked up his first engine engineer [1] based on engines the guy was literally building in his garage. Bezos just staffed Blue Origin with a bunch of people from old space, and so it seems quite unsurprising that you just end up with another Boeing, but without the legacy hardware and political cronyism to use as crutches.
Musk has had 3 huge successes - Paypal, Tesla, SpaceX. Having one such success might be luck. But when it's 3 times, dismissing it as luck is not very credible.
The same goes for Steve Jobs. 3 enormous successes.
And Bill Gates: 1. dominate 8 bit microcomputer software 2. pivot to 16 bit DOS. 3. pivot to 32 bit Windows. 4. pivot to internet. If you don't think that was a big deal, none of the other microcomputer software companies survived. Lotus, for example, muffed the pivot to 32 bits.
Pivoting to internet didn't work great for Bill Gates. Nobody really used MSN other than for chat and possibly hotmail, the browser wars were lost, and the bulk of the revenue was done on Windows at the time Nardella took the helm. However Microsoft was big enough to afford a failure.
Microsoft pivoted to the internet very successfully in the 90s under Gates, and the stock went up like a rocket.
Nadella didn't arrive until a full 10 years later.
I appreciate the value Nadella brought to the company (as I own some MSFT), but have pivoted away from Windows to Linux for development work. I remain with Windows 7 for other uses, so much so I bought a complete set of spare parts for my Win7 box for when it inevitably fails.
In the 90s what made MSFT shoot up was Windows becoming a household name, and Windows NT becoming the standard enterprise setup (often at the expense of mini-mainframes like the AS/400, rather than Unix); not Microsoft network.
The (almost successful) EEE strategy with Internet Explorer was the only part of Gates's internet strategy that survived the 90s.
This also explains why Ballmer went full in on Windows: there had been no pivot to speak of.
Sure, but can you not hire people who are good at hardware with billions of dollars of investment? Or, is it culture and an intangible ability to procure and orchestrate great people doing great work that leads to success? Think in systems. If you have the resources, and the physics demonstrate it can be done, the system is not properly configured, no?
can you not hire people who are good at hardware with billions of dollars of investment?
Clearly not in Bezos’s case.
There is no magic involved here, some people have the skill/experience to lead the design, build, and selling of innovative hardware, others don’t.
For example, for designing new rockets, one of the major things Musk innovated at SpaceX was the traditional aerospace design cycle. Instead of spending 5 years on countless analyses and few actual tests, like the incumbents did/do, SpaceX built and destructed as many prototypes as possible, learning rapidly and innovating. Musk knows what innovative design truly requires.
What did Bezos do? He hired a bunch of ex-Lockheed and Boeing engineers/leads (from an industry that for decades has not felt market-driven pressure to innovate), and those engineers/leads just kept doing things the old fashion way.
When the person in charge (Bezos) misses this detail, no amount of money or wishful thinking will fix this.
So, while I think the startup model is a fine way for investors to get exposure to an asset class that is the equivalent of 0DTE options, for the startup ecosystem to enable participants to play in the fiat that falls from those investment decisions, and perhaps some value to be generated, I would hazard that the model would not scale to meet the needs of the aerospace and defense marketplace at this time. All that is needed is skilled engineers and manufacturing practitioners to be enabled to do their best work, while keeping out of their way. Airbus demonstrates this, imho. They employ almost 150k workers, and successfully deliver products to customers that aren't fraught with manufacturing defects. They also have a book of work into the next decade, demonstrating customer confidence in the product and the org.
https://luisazhou.com/blog/startup-failure-statistics/
https://www.forkingpaths.co/p/billionaires-and-the-evolution...
https://escholarship.org/content/qt6668s4pz/qt6668s4pz.pdf