Not so fast

Scoble takes off with Dave Winer's piece on a different sort of VS funding - and I must say, after saying that the idea is to disintermediate, he immediately proposes a new middleman - but that's not what I wanted to comment on. Scoble's take is that venture funding isn't as critical now as it once was:

What are the “ventures” the entrepreneurs actually need?

See, in the 1980s, they needed money. Why? Cause the growth was in computers and other electronics goods. I worked on an assembly line at Hewlett Packard one summer in the early 1980s. Why did these (and smaller startups like Apple or Atari back in the early 80s) need money? Cause building physical machines costs money. Assembly lines. People. Materials. There was a high marginal cost of goods.

But today’s world isn’t money constrained. You don’t need much money to build software or services.

Oh really? I don't need money to pay my mortgage? I don't need money for anyone else who plans to come along and help me? I don't need money for the monthly hosting bills (assuming that I'm building a hosted solution)? If my solution gets big, I don't need more money to pay for all the bandwidth I'm using?

Even if I manage to get hosting paid for somehow, there's the simple matter of paying the day to day bills each month. Most people don't have 1 - 3 years of living money stored up, so they can't just jump off and try to be the next big thing without help. Which means one of two things - venture funding or a bank loan (in the simplest case, maxing out a set of credit cards).

There are different risks attached to each route, obviously, and different levels of control as well. But to state that money doesn't constrain creativity anymore? Lots of luck with that one. Try explaining that to your mortgage company, and the local supermarket.