that you might be becoming a good product manager and developed, but not a good businessman. likewise, that the product is great but totally unsustainable without an artificial support machine. Too many of those around, and the web sphere risks another bubble and burst, causing outright misery and a swing of the pendulum too far the other way (impossible to find even seed money, let alone serious investment, even if you DO have a sensible, sustainable business)

Seed funding schemes (YC, Seedcamp) are not about training people per-se. They're not about making people become good product managers or good businesspeople. (although obviously people on these schemes are going to require some of these skills going in, and hopefully improve them along the way)

If you want to become a good product manager, you have to build something, watch how people use it, and adapt it to reflect your findings. Iterate. To do this, you need to "launch" in some form - and get users.

If you want to become a good businessperson, you can take an idea/product and go with it for real. But if you have no product, you're playing with an empty hand - you can't tell what people's reactions to it will be, you can't demo it to investors, there's too many unknowns. Enter the idea of spending 3 months building a v1. For this you need an engineering team (could be just you, or one other person). This engineering team needs to eat for that 3 months - enter the idea of micro-seed-funding-whatever you want to call it.

A product that comes out of this process that is great but unsustainable will die because of lack of money, or get further funding. Any "bubble" would be caused by later-stage investors investing in unworkable businesses. A company that has used a small amount of early funding to build a demo/v1 is going to be much easier to understand by subsequent investors, hence micro-seed funding arguably helps to avoid bubble-syndrome, not cause it.