Lackluster

For years, venture capital drove transformative change. VCs took bold risks on revolutionary ideas, and the payoff was monumental: search engines that redefined how we find information, online marketplaces that reshaped global commerce, and tools that put the power of technology into billions of hands. But lately, something feels off. The industry has shifted from pioneering to playing it safe, and the results are clear—incremental returns and a growing sense that tech has lost its magic.

It’s time to ask: Is this really the best we can do? And more importantly, what would it take to bring back the era of game-changing innovation?

From Moonshots to Marginal Gains

The 1990s and early 2000s were the golden age of venture capital. VCs backed moonshots, and their risk-taking paid off. Companies like Google, Amazon, and eBay didn’t just succeed—they changed the world. Those investments created entirely new markets and set the stage for the digital revolution. The returns were extraordinary because the ideas were extraordinary.

Today, the landscape feels different. Startups pitch themselves as “the X of Y,” using existing business models in new niches. The focus is on rapid scaling and predictable exits rather than transformative impact. Even in cutting-edge fields like AI and blockchain, much of the work feels iterative, shoving AI or blockchain into small ideas, riding the coattails of established technologies without pushing boundaries.

Why the shift? Two words: risk aversion.

The Risks of Playing It Safe

The drive to minimize risk might feel logical, but it’s shortsighted. Here’s why:

1. Incrementalism Limits Returns: A safe bet is rarely a big win. Transformative returns—the kind that defined the 1990s—come from betting on bold ideas, not marginal improvements.
2. The Market Is Crowded: With more startups and more VCs competing for attention, sticking to incremental ideas only adds to the noise. Real differentiation comes from boldness.
3. Economic Cycles Don’t Wait: Downturns can create fertile ground for innovation. Many of the biggest successes in tech—companies like Microsoft and Airbnb—emerged during recessions. Playing it safe during these times often means missing the opportunity to lead the next wave of growth.

What the Data Tells Us

VC returns have become more variable over the past two decades, with fewer blockbuster successes. But one pattern stands out: the biggest wins still come from transformative ideas. In fact, when adjusted for inflation and market conditions, the risk-averse strategies of recent years haven’t outperformed the bold bets of the past.

This doesn’t mean every VC needs to chase moonshots blindly. But it does mean that overly cautious portfolios—focused on safe, incremental gains—are leaving money on the table.

Why It Matters

This trend affects everyone:

1. For the Customer: Customers aren’t clamoring for the next slightly faster app or slightly cheaper service. They want products that inspire, solve big problems, and push boundaries.
2. For the Company: Companies built on safe ideas risk becoming obsolete. Without bold vision, they’re replaceable—and in tech, replaceable is a death sentence.
3. For the Founder: Founders who prioritize safe pitches over big ideas often find themselves building forgettable companies. True satisfaction—and the greatest successes—come from sticking to a vision that matters.
4. For the VC: The highest returns come from backing transformative ideas. Playing it safe might protect against losses, but it won’t deliver the outsized gains that define top-performing funds.

The Case for Boldness

The data is clear: VCs who backed bold ideas in the 1990s and early 2000s defined an era of extraordinary returns. The same opportunity exists today, but it requires a shift in thinking.

1. Moonshots Still Win: The companies that change industries and deliver the greatest returns are born from ambition, not caution. The next Google or Tesla won’t come from incrementalism.
2. Cool Ideas Need Real Impact: It’s not enough for something to sound exciting—it has to solve a meaningful problem. The best investments marry bold vision with tangible benefits.
3. Prepare for Cycles, Not Trends: Economic downturns don’t erase the potential for innovation. They create the space for it. VCs who seize these moments will lead the next wave of tech.

Bringing Back the Dreamers

The tech industry wasn’t built by playing it safe. It was built by people who dreamed big, took risks, and believed in their ideas. VCs who reward boldness, founders who stick to their visions, and customers who demand better can reignite that spirit.

The question isn’t whether we can bring back the magic—it’s whether we have the courage to try.