The sixth point may or may not be true, but surely plenty of software companies in the last 10 years have started on the VC model of spending a ton of money on

The sixth point may or may not be true, but surely plenty of software companies in the last 10 years have started on the VC model of spending a ton of money on upfront development and then reaping the economies of scale afterwards. He doesn't mention anything in his specific situation that would lead us to believe that model couldn't possibly have worked. It sounds like his consulting idea would have been a valid risk mitigation strategy, but ideally in software you always want to get to the point where you are selling zero marginal cost bits, rather than only charging customers for person-hours.