It does make a sort of sense - VCs in the bay area seem to congregate there because software companies can promise (if things go just right) stratospheric retur

It does make a sort of sense - VCs in the bay area seem to congregate there because software companies can promise (if things go just right) stratospheric return rates. Those glitzy home-runs can fund a lot of flops, and the investors still win out. If you want to make something physical, you can't hand-wave and make wild assumptions about growth rates and user acquisition and ARPUs. You have a Bill of Materials, distribution costs, a slim margin, and rapid competition from cheaper and often outright dangerous knock-offs with little recourse. Look what happened with hoverboards. So in a market that is as jaw-droppingly risk averse as this, but people still want to grow their huge hoards of capital, the money takes the path of least resistance and follows the only available market that can theoretically produce an exponential growth curve more than once every few decades.