The impressive thing is that the powerset guy actually used ("we can do a talent acq for $1-3mm per engineer" if we fail) in his recruiting pitch to hire people (and, presumably in his fundraising).

There's probably a good business model in being an "academy startup" which both shoots for the moon AND is a great place to work, builds skills, and can do a talent sale (or tech sale, maybe) if the product is unsuccessful, building that into the company from the start. That's probably what I'd do, especially if it were based outside the bay area and maybe strongly allied with a great school but lacking other good local employers (Waterloo, CMU, etc.)