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Randy Komisar, Partner KPCB speaks about Scale @Investors Circle Spring Forum. Everything in our business schools, trade press & investment communities suggest that Scale is the only thing worth investing in. He feels that is a huge mistake. He feels it is ingrained into our financial & business cultures & it isn’t going to change. But he thinks it is the reason that we have made so many mistakes in the last decade or two in building our economy. Because rather than looking for those great businesses that are sustainable at an appropriate scale, we keep being driven towards Bigger is Better particularly as you see Capital rush into specific industries that seem to be trending whether its social networks, clean tech or the internet. Whatever it is Capital rushes in there & sees great return with very little effort with great liquidity. Then what happens then is that all these other wonderful businesses that can be built, all these other industries that are productive & also can have very solid returns are ignored. Everybody complains about venture capitalists being lemmings. If you look at the capital on capital & liquidity models, they are looking for the easiest way out not just the easiest way in. The other businesses are too hard to scale & getting follow on capital & liquidity is really hard.
