In most business issues, money is at the root. Generally, for a startup, those problems stem from cash flow, purchasing at scale, or capital to expand. While these are difficult problems to solve, the excess of money can actually be a far worse problem for a business.
There’s truth in the saying, ‘gravity makes for strong legs.’ Gravity, the force keeping us rooted to the ground, is the very thing that causes our legs to grow strong muscles. This is true for business as well. The lack of money in any enterprise causes that company to stay sharp with the money they do have, ask for favors when they can, and never overpay unless it’s an absolute necessity. But when a business gets an excess of capital, its ‘muscles’ atrophy, and those lessons learned in lean times are forgotten. Similarly, when economic growth slows or even declines, no one in that business will know how to right the ship.
Take Headspace, for example. Headspace is an app for your phone that helps busy people from all over the world find time to clear their minds and unwind. While not all that unique of a concept, Headspace’s story is one of lean growth and careful investment.
The app began when Andy Puddicombe, a monk of 10 years, returned to London to open his own guided meditation studio. Richard Pierson, an advertising director and one of Andy’s clients, was so taken by what happens through meditation and the overall experience that he encouraged Andy to multiply himself somehow. From this desire, Headspace was born. The two resourceful entrepreneurs called in every favor they could find - friends with recording studios, writers who were tired of their 9-to-5, designers, app developers, etc. - to get the mobile app off the ground.
“Striking lucky early on, the UK's Guardian included a Headspace booklet in every newspaper one Saturday, while airline Virgin Atlantic added bespoke Headspace meditation content to its planes' entertainment system. This led to a growing number of people downloading the app, which today costs £9.99 per month.” (source: https://www.bbc.com/news/business-49394848)
The two co-founders did not take investment for the first 4 years of their growth in order to not forget how to actually grow their business, which proved to be an incredibly smart decision. The app has grown rapidly and is now worth $100 million dollars. Headspace itself has blossomed into an overall online healthcare company, delivering content specializing in meditation through a freemium subscription service model.
Is this only applicable to startups? Is there relevance here for our intrapreneurs? Absolutely! If you are looking to help pivot your business unit and need money to do so, then create an MVP first to make the business case before you go ask for money. Alternatively, you should make sure you define KPIs with any investment of time and dollars your business is making so that you’re not innovating without a hypothesis of how you think it will help your business. The bottom line is this — money makes business easy, but lean business makes all who buy in, smart.