To be fair, those "ducks-in-a-row" questions are NOT easy to answer and it's easy for someone to fool themselves with a BS answer. Moreover, there are plenty of ridiculous ideas that someone would never think anybody would "pay for" that make tons of money in spite of themselves.
In the end it's all about taking calculated risks. Should the OP have learned more about the market he was trying to operate in AT SOME POINT before quitting his day job, hiring five "contractors" and writing 200000 lines of code in 9 months? Sure. Was it a worthwhile experience that gave him more wisdom? Hard to say. To be honest I am surprised he only blew 40K, it could have been a lot worse.
Right, even VCs don't know the answers. But the difference between a VC and a founder is that a VC invests in 100 companies not knowing which will succeed, but a founder only is investing in one.
And since VCs make practically all of their returns from that one hypergrowth 1000x company, they can push founders to swing for the fences even though that also makes startups more likely to fail.
For many founders, a 5x return would still be a life altering result, but to most VCs that doesn't really move the needle. It's nicer than 0x of course, but no more than that.
Yes... All things considered, he got away pretty cheap. I know guys who spent most of their life savings and millions of investor money, working on an incredible opportunity that didn't pan out.
In the end it's all about taking calculated risks. Should the OP have learned more about the market he was trying to operate in AT SOME POINT before quitting his day job, hiring five "contractors" and writing 200000 lines of code in 9 months? Sure. Was it a worthwhile experience that gave him more wisdom? Hard to say. To be honest I am surprised he only blew 40K, it could have been a lot worse.