Some Investors Understand Power Laws

Veritasium posted a new video on power laws, and how they occur naturally. It argues, for example, that fires in Yellowstone Park will occasionally be much worse than what is typical, and fire prevention tactics make the matter worse.

It also explains hwo venture capitalists make all their money on 10% of their investments. And how some people are far richer than you might expect from variation in incomes.

Another video says Europe's economy is dying.

Everyone complains that there is no good reason why anyone whould make more that $1 million per year, or be worth more than $1 billion.

I wonder if these are related. Maybe there is a law of nature that California venture capitalists and bankers understand, and that Europeans do not. As a result, Silicon Valley can crank out entrepreneurs to follow daring business plans and get big on new technology markets, and Europe cannot.