An underdeveloped market for risk:
My hypothesis is that our biggest ability to create impact is going to come from finding the “next big thing” business models, the ones that solve problems that haven’t been solved yet – whether in energy distribution, sanitation, water, education, healthcare, etc. And it feels to me that it’s unlikely that, in most cases, betting on new, untested business models – meaning creating new markets with huge amounts of friction (bad roads, poor ports, unreliable distribution, corruption) serving customers who are, by and large, new consumers of whatever you’re selling (so high acquisition costs, etc.) – is going to fully financially compensate investors and entrepreneurs for the risks they’re taking.
[To be totally clear, I’m differentiating between “good” and “astronomical” returns here, and arguing that if we’re clear-eyed about the risks you have to take to solve problems that have never been solved before, then “good” financial returns aren’t good enough, if your yardstick is a simple financial risk/return analysis.]
[I hope so.]
Source: Sasha Dichter’s Blog