The problem around here is that there's plenty doing it for a hobby - but few with competence. I'd argue that lack of competence is actually the root problem - with the hobbyist attitude exascerbating it by causing loads of incompetents to do the wrong thing (run a business they aren't competent to manage) for the right reason (to help/be a part of the community).
Yes and no. One factor which many Bitcoin enterprises have had to deal with is explosive growth - growth which they have neither the financial resources nor the experience to handle.
Outside of Bitcoin, you can often "learn on the fly" because you're not going to have people throwing hundreds of thousands of dollars at you a few weeks after you've launched. In Bitcoinland, your business can literally be taking a couple of hours a week of your time one month and the next month pretty much require a team of employees with different skill-sets who you can't yet afford to employ.
Hobbyists need to recognise their own limitations and plan for controlled growth before they even launch. Past a certain point, it's neither possible nor desirable for a business founder to try to micro-manage all aspects of the operation. You need to set your ego aside and find the best people available for the tasks which need doing as an enterprise grows. You need to be willing to *shock*, *horror* refuse additional customers if you don't have the capacity to service them properly.
The community are their own worst enemies in some ways. They keep throwing money at businesses which have extremely limited capacity to absorb losses. We know most of these businesses are so under-capitalised that a loss of even tens of thousand dollars is something they couldn't compensate and yet people insist on placing hundreds of thousands of dollars with them and just leaving it there.
The community also tends to hail new services as heroes and feed the egos of new service providers - perhaps in the process convincing those operators that they're more competent than they actually are.
To my mind the issues you're describing ARE precisely a lack of competence.
Properly realising your capital requirements (both the minimum AND the maximum) IS an area of competence. Recognising which skill-sets your business needs but you don't possess yourself IS a competence - if someone can't even recognise the need for something then I'd say that indisputably they lack the basic competence to be running their business.
Capital is one area where a lot of BTC businesses go badly wrong - and I'd argue that raising TOO MUCH capital has been one of the primary reasons for the failure/bad performance of many BTC investment funds (with mining ones the problem is slightly different).
I trade rather than invest, but for both traders AND investors there are two key elements for every potential security purchased:
1. How the current price relates to the actual value.
2. The liquidity.
A lot of investment companies have given some attention to #1 whilst completely overlooking #2. The hard truth is that with the low level of competence in BTC businesses in general #2 is very important - as the value (as well as the price) of securities can change very rapidly. SO even if investing rather than trading you need to be able to get out of a position quickly if you spot a downwards change in value (usually some act of incompetence by the manager) before it gets reflected in the trading price. Even a fairly incompetent fund manager can spot these changes in value before the price really crashes - as they pay more attention to what's happening than the casual investor does.
But to be able to respond by divesting yourself of your holding, you have to only be holding an amount that the market can absorb - and many funds have raised so much cash (which isn't necessarily a lot in any absolute sense) that when spread over their small list of investments meeting criterion #1 it leaves them unable to exit at any sort of reasonable price when they need to.
When, inevitably, one of their investments gos bad (and it would be an absolute miracle if none of them ever did) they then end up complaining to their investors that they couldn't sell out because of a lack of liquidity. But that lack of liquidity existed before they bought in - and their current plight is thus a direct result of their decision to commit to positions such that they could never easily reverse them. Their lack of ability to recognise the NEED to take liquidity into account BEFORE investing IS, in my view, pretty much a text-book example of a lack of competence. There was something that needed to be done - and they were unable to even recognise the need for it let alone do it.
You can say they lack experience - but experience itself doesn't help. Learning from experience helps - and that's pretty much what competence is.
I run a small fund myself (that trades rather than invests). I could sell plenty more units in now - there's no Ask on it under about 3 times its NAV/U and I frequently get PMs asking to be notified if more units are sold. But I KNOW that selling a load more units wouldn't be smart. If I had ten times the capital then one of two things would happen:
1. I'd only use 1/10th of it to trade with and leave the other 9/10ths idle and the growth per unit would be 1/10th would it is now.
2. I'd use ALL of it to trade - and I'd make LESS profit than I do now. Not just a smaller percentage but a lower amount.
The reason for 2. is that at present I only commit to any security I trade the amount I can liquidiate quickly at the first hint of trouble (I prefer not to wait and see - and to take tiny losses when there was actually no problem so as to avoid big losses when there IS a big problem). If I tried to trade 10 times the volume on the same assets then I'd never be able to get out just before a price crashed - and would make little more profit when things went well. That would result in lower profits than at present - which would then have to be shared between a lot more investors.
Investment companies need in BTC land to follow a similar policy - far more so than applies in fiat world - because of the volatility of pretty much everything BTC related (e.g. an otherwise perfectly fine business could be screwed if BTC rises more than X% vs USD in a short period). Yet few investment funds have ever properly considered this -and end up wedded to failing businesses as they plunge to their demise.
Raising more capital than they can safely use is a direct cause of failure - as they then feel obliged to use the capital even when doing so introduces risk outweighing the benefit.
I say it's a lack of competence - if you disagree, then I suspect the difference in our views is more one of semantics than anything else (you're maybe concerned over WHY they lack competence - e.g. lack of experience - I'm just pointing out that they don't have it).
