They are too dumb to not be confident. Plenty of confident dumb people are poor and try get rich quick schemes. Occasionally some of them work, and now you have a dumb business owner.
If you're 10/10 smart, you're getting a 7 figure sign on bonus to go work at Meta as an AI researcher.
If you're 6-9/10 smart, you're probably miserable somewhere.
If you're 4-5/10 smart, you are one of these people.
This is largely my experience as well. The Bay Area wannabe startup crowd is brimming with idiots, people dumber than your dumbest colleague at work. Unbelievable amounts of Dunning-Kruger.
The actual grind filters out most of them, of course, but if you concede that some businesses are basically luck then some number of those idiots will make it.
confidence man