>>It must be pretty hard to disrupt the "government contracts for nuclear weapons production" industry..

not to pick on you, but this is an interesting turn of phrase (I know it is sarcastic). There is an interesting gulf in SV culture nowadays between needing to "disrupt" an industry, and the industry actually just needing some renewed competition. A major problem is usually raising enough capital to really compete. And an interesting SV and banking assertion often made is that there is way too much capital chasing too few opportunities.

I guess that raising relatively small VC funds precludes putting large sums of money to work, because that means no diversification. On the other hand, if we are done with low-hanging-app-fruit for outsized returns, is the solution just to raise bigger funds? It seems there are problems that can be profitably solved with modern software, modern teams, and new ideas, but which are not solved due to too much diversification of capital.

edit: fixed autocorrect and word choice.

Pretty much. VCs didn't start SpaceX, Tesla and Blue Origin, billionaires did after already earning money through other means.

Another issue that plays into diversification is the inherent riskiness of startups. Most will fail to create so much as a decent app while remaining on budget, who do you trust to create a reliable nuclear research lab? Even experts in the field might not have the requisite business experience, and if it fails it fails big time. You need someone like a Musk or Bezos to obsessively drive such an endeavor, and it's hard to pick out the future Musks and Bezoses if they haven't already proved themselves.

Yeah, in that context startups aren't really companies. They're proofs of executive competence. As a side benefit, if they are successful it enables the executives to self-capitalize.

I don't think you're picking on me.. I almost put disrupt in quotes when I wrote that. ;-)

I don't particularly like the word disrupt, but I used it in this context because HN knows exactly what I mean when I use it..

I suppose I did actually mean "healthy competition" or "re-thinking" and not necessarily the true meaning of the word.

On the other hand, they can hardly sell the work to anyone else, so you'd think that some sort of sane compromise could be had.

Good point. Another sort of mutually assured destruction.