Many say that, in Silicon Valley, there is "no penalty for failure". I'll be a heretic for a bit, and say this is part of the reason why we don't have Hyperloop

Many say that, in Silicon Valley, there is "no penalty for failure". I'll be a heretic for a bit, and say this is part of the reason why we don't have Hyperloop. Software companies have huge payoff ratios. You invest $1M in 5,000 companies, and hopefully one of them is Facebook. The payoff on a big success is thousands to one. If you give $1M to some douchebag who spends it on hookers and blow, no big deal. Infrastructure companies have much lower payoff ratios. You might invest $1B in the hope of getting back $10B. But for that to be profitable, the success probability must be at least 10%. Which means you have to be pretty sure they aren't going to just blow it all on parties. Now, from the founder's perspective, building an infrastructure company is really hard, and blowing $1B on parties is really easy. So if there's no penalty for failure - no social cost to wasting the money, and not trying very hard to build the hardware - that's what almost everyone winds up doing. Infrastructure demands large capital investment, and large capital investment demands some form of accountability.