Economics can't explain everything
When you try to rationalize everything into economic terms it is when you realize that economics can't model everything about life. Yes, it does not make business sense for entepreneurs to try things that are mostly going to fail. Some of the most rational and experienced actors in the scheme know beforehand that 4 out of 5 will fail. Most of the ones involved in the doomed 4 really think that they can success, change the world and become rich in the process, when they really won't.
The critical fact is, there is no one on earth that can reliable predict which one out of the 5 will succeed and which 4 will fail. If such a genius existed, the world would be already ruled by him/her without resorting to force, cheating or deception. Which are the current ways of ruling the world, not by outsmarting and fair competition.
How about introducing into the model something like "we're all human, not at all rational and sometimes we do things because we either can, want, or can't do them"?