One possibility is that previous technological advancements facilitated dispersion of labor, while the current crop facilitates the concentration of it.
Advances in ocean-faring ships led to colonialism. Train travel led to a rapid westward expansion of the United States. New farms get established, and new towns crop up to serve them, needing homes and markets to be built, a local newspaper, a local grocer, a local bank, eventually local radio and television stations. Similar basic economic structures get replicated in many diverse geographic locations. Once one place gets saturated, people move and start up another franchise of the town model.
Skipping ahead fifty years or so, the web means I don't have as great a need for the local bookstore, the local newspaper, the local television or radio station, the local bank, etc. There are plenty of businesses that I still need locally, but they in turn don't have as great a need for the local advertising agency, the local newspaper's classifieds section, the local accountant, the local lawyer, the local travel agent - assuming there's still a local owner, with a local HR department, local management structure, etc.
Of the startups you see, how many are going to end up with a business whose operations need to be replicated in many geographic locations? How many are ever going to be more than an office in the Valley or NYC and maybe a few sales outposts? How many pitches are you getting that require large marginal outlays on labor in order to scale, and how would that requirement affect your investment decision?
Advances in ocean-faring ships led to colonialism. Train travel led to a rapid westward expansion of the United States. New farms get established, and new towns crop up to serve them, needing homes and markets to be built, a local newspaper, a local grocer, a local bank, eventually local radio and television stations. Similar basic economic structures get replicated in many diverse geographic locations. Once one place gets saturated, people move and start up another franchise of the town model.
Skipping ahead fifty years or so, the web means I don't have as great a need for the local bookstore, the local newspaper, the local television or radio station, the local bank, etc. There are plenty of businesses that I still need locally, but they in turn don't have as great a need for the local advertising agency, the local newspaper's classifieds section, the local accountant, the local lawyer, the local travel agent - assuming there's still a local owner, with a local HR department, local management structure, etc.
Of the startups you see, how many are going to end up with a business whose operations need to be replicated in many geographic locations? How many are ever going to be more than an office in the Valley or NYC and maybe a few sales outposts? How many pitches are you getting that require large marginal outlays on labor in order to scale, and how would that requirement affect your investment decision?