Low Startup Capital Requirements: Blessing or a Curse?

Most people in the startup world know that, compared to other industries, you need very little capital to start a startup. If you want to start a restaurant, you'll probably need hundreds of thousands of dollars to buy the building, buy the equipment, hire the staff, etc., before you're profitable. Starting a startup can often be done for no more than the cost of the founder's living expenses. This might seem to be great for a founder. However, one of the fundamental laws of economics is: there ain't no such thing as a free lunch. In a competitive market, any advantage which is freely available to all of the participants doesn't benefit any of them, because it will simply cause new people to enter the market and make things more difficult for everyone. Suppose there are two cities, A and B, and people in both have a taste for ice cream. People in A are willing to pay $1 per scoop, but people in B are willing to pay $3 per scoop. This might seem to benefit ice cream sellers in city B. H