Continuing my ad-hoc series on avoiding the entrepreneurial lottery, another way of avoiding lottery odds is to require real capital for your project (and to get it funded).

When we started Open Market in 1994, a basic Unix server and SQL database cost $100-200k.  It took real money to build Internet companies, and that meant competition was limited by available capital.

Now, anyone with a $500 laptop can start an Internet company (or copy your idea).  Tools are free, and hosting starts out free.  As a result, there seem to be as many would-be Internet entrepreneurs as there are aspiring novelists.

If your idea needs real capital (beyond salaries), you’ll have a much narrower competitive field.  Sure, there’s a lot of venture and angel funding available, but getting funding is a filtering function and barrier to entry.

VistaPrint is a great example:  though they initially outsourced their printing, they ended up spending millions on their own print operation (fed with custom software).  They weren’t going to find any serious direct competition from a Y Combinator project team.

(Note:  raising capital for customer acquisition is not enough of a differentiator.   You’ll still compete with companies finding customers in capital-efficient ways.  See my article on customer acquisition.)