On the subject of external capital as opposed to author skills, I believe that you cannot make such a blanket statement without knowing the nature of the business. Some businesses can use capital to hammer their way into markets, but others need careful growth with attention paid to the expansion as a dynamic. Overall, though, good point - many businesses do fail because of having too much capital (and less incentive) when starting out.
sbspalding I completely agree. I was aiming this article towards "typical web startups." These companies have the advantage of not requiring a lot of early capital to gain traction. Unfortunately, there is this tendency to believe that you absolutely require millions of dollars worth of funding before you can really get off of the ground.
In more traditional markets, and even in more saturated web markets, capital is a lot more important to either attempt to unseat current market leaders or to build up real, physical infrastructure.
I am old, and grumpy enough to prefer to resist change for changes sake. I avoid web-based programs as they tend to change without notice (or control - did I mention I am a control freak?) They are therefore unstable as a part of life that can be relied upon. My wife, however totally disagrees with me on this, and enjoys the convenience of continually improved programs etc.
In more traditional markets, and even in more saturated web markets, capital is a lot more important to either attempt to unseat current market leaders or to build up real, physical infrastructure.
Well stated as always John.