Part of this is because VCs are hoping for a repeat of the Web 2.0 boom, where marginal costs were zero and billions of people were buying smartphones. If you check YC’s RFS (just an example), they’re all software: https://www.ycombinator.com/rfs
Everyone asks “what if this is like the internet” but what if it’s actually like the smartphone, which took decades of small innovations to make work? If in 1980 you predicted that in 30 years handheld computers would be a trillion dollar industry you’d be right but it still required billions in R&D.
There are a ton of non-software innovations out there, they just require more than a million dollar seed to get working. For example making better batteries, better solar panels, fusion power, innovations in modular housing, etc.
Everyone asks “what if this is like the internet” but what if it’s actually like the smartphone, which took decades of small innovations to make work? If in 1980 you predicted that in 30 years handheld computers would be a trillion dollar industry you’d be right but it still required billions in R&D.
There are a ton of non-software innovations out there, they just require more than a million dollar seed to get working. For example making better batteries, better solar panels, fusion power, innovations in modular housing, etc.