Did you really say a good product will sell itself? Generally this is not true, especially for enterprise solutions. But, I'm happy to be proven false if you can provide examples
His point is referring to these startups coming in asking for huge amounts of money without having spent even a small amount already. It doesn't make sense for an investor to put in $10 million if you haven't even put in $10 thousand.
That's not always the case, and it depends on the situation. If a startup founder is working for no salary and focusing fulltime on the startup, then money might be better in their pocket, than in the company. $10k could by the founder 6months working at the company. Sweat equity and opportunity cost are also important to consider. Just because a founder hasn't put up cash, doesn't mean they aren't also committed and taking a risk.