Kickstarter P4wns Piketty
Oculus Rift and capital
The story is well known amongst geeks. End users crowd fund the famous VR rig, and it’s inventors promptly sell for $2B to Facebook.
The larger issue though is that with many of the best business ideas “capital” and “revenue” are indistinguishable.
Bootstrapping is not taking in capital investment, at least until after you make sales. Mark Cuban famously tells anyone who will listen, to GET CUSTOMERS, NOT INVESTMENTS.
It’s called Shark Tank, because entrepreneurs do not want to be in a shark tank.
Economist Arnold Kling in his attack on Piketty points out there are different types of capital that accrue to labor and returns on capital are a return on risk.
So if r > g, but r = returns to entrepreneurs who take pre-orders of products not yet built… Or even better, if being a crowd funder, not only gets you a VR rig (or whatever the imagined product), but a piece of the equity if the company goes parabolic…
WHO CARES?
The argument that whips Piketty is the one stumping the Economics profession today: entrepreneurs can now earn profits with less need for labor OR capital, and get to keep r mostly for themselves.
Digital deflation is causing the value of both capital and labor to fall.
And that’s the crushing blow to Vox crowd here, because if you are a fan of Piketty, you have to be a fan of Entrepreneurs, and a fan of deregulation, and fan of crowd funding, and a fan of Kickstarter, and a fan of Uber, and fan of Airbnb.
If you are a fan of Piketty, you have to be a fan of software eating the world.
