[bgribble]

I don't think the meaning is anything terribly sophisticated. I read it simply to mean that if you invest money in the company, that's money that is at risk of going poof if the company folds.

If you take the money out of the company, that money can never be impacted by anything that happens to the company in the future, so the total amount "at risk" in the company is decreased.

This is, IMO, an overly simplistic take and I'm not endorsing it by explaining!

[pwthornton]

If you don't reinvest enough money in your company, eventually, the market moves you by.

How many people on here still use Basecamp? I suspect a lot less than ten years ago. I'm at a startup, and we had to select project management software. Basecamp wasn't even in the discussion.

[TylerE]

So, are they better off having made 10 years of profit, or should they have spent a bunch of money to end up with a product that's still probably irrelevant today, and no money to show for it?

Intuitively, all effort spent on a software has harsh diminishing returns.

Getting to 50% is easy. 80% isn't too bad. 90% is starting to feel like work. 95% is damn hard. 99% is a mammoth achievement. 100% is unattainable.

Increased functionality has value to a point, but it's fairly finite. By continually reinvesting in the same product, you are essentially betting on being at least a 99% product, if not 100%. Most products aren't that. Obviously you want to make a good product, but a lot of times trying to that by just throwing time and money at it just gets you Duke Nukem Forever'ed into irrelevance.

That's ok.

Most projects end in irrelevance.

Wouldn't you rather have a happy life and make a decent buck while on the path there? Many scientifically minded people mock the lottery as "a tax on people who don't understand math", but is extreme VC culture (and I'd paint most of the SF scene with that brush) anything but a lottery? It certainly isn't a meritocracy.