Tech companies present several major differences with traditional ones when it comes to the challenge of scaling up and coping with the relative weight of risks at various stages.

The first difference concerns how low the technological risk is at the earlier stage. The whole phase of developing the technological resources necessary to create a new product is covered by commoditized technological resources such as the Internet, open source technology, and cloud computing platforms. As a result, the process of launching a new venture skips large parts of the product development phase in the traditional economy: founding a company starts at a point where technology is already available and thus the level of technological risk is already very low (even if a bit of technological innovation is still needed)…