“Frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.” —Jeff Bezos, Amazon founder.
As one of our country’s great venture leaders, certainly Jeff Bezos knows a great deal about innovations and tight boxes. And I’m not the only one who thinks so – in its latest edition, Harvard Business Review names Bezos the “Best-Performing CEO In the World.” But I’m going to challenge him on the idea of using frugality as a primary motivating factor for innovation.
Frugality is certainly important in start-ups and developing companies, but it should never be the most important goal or guiding philosophy. The vision should be. Development of the right mission. The continuity of the mission. The great and wondrous marketing concepts that come from great marketers. I say it’s more about smarts and fearlessness than it is about frugality.
If the mission is right, don¹t risk embarking on it without some certainty that you can find the human and capital requirements for at least the next stage of development, with plenty of surplus for the unpredictable. Don’t be naïve enough to believe that if an idea is good enough, it’ll fly on its own. Shore up your venture with a team and resources that can support the realistic costs and energy required to introduce your product or service to the market in a manner that gives it a fighting chance to gain and maintain a strong foothold.
Frugality as a primary goal doesn’t drive innovation. By its very nature, it restricts. Properly planned and executed ideas fuel innovation. Faith in your product and service and great teamwork does. Presenting a product or service that neatly fills “What’s missing?”
“.) in the market does. Innovation evolves out of top thinking and great forward motion.
Here are other ways to achieve innovation: Know what you’re really about. Carefully develop your answer to “What’s missing?” Research your industry, your competition, your assumptions. Write a great business plan. Get your silver bullets in line. Get your resources in line.
Then drive forward.
Get a great team of officers, staff and advisors together. Develop and ignite a faith and passion among your entire team for the mission. Get the money you need – don’t start without it. Start strong, when the time is right and everything is in line. Be ready. The Preferred Stock Series B, C, D and maybe even E rounds that will follow from toe stubs caused by not starting right can trip you up and land you inside one of those dreaded “tight boxes.”
When you’re at the innovation and introduction stage, frugality as an end in itself doesn’t have a place. Frugality can come later, when you’re already successful and beyond the early stages of a company. When it’s about managing operating costs so you can sustain and enhance the success you’ve achieved from a strong start, far into the future.
Mr. Bezos, congratulations on your newest accolade. You nail it nearly perfectly most of the time, as Harvard Review Journal and my wife, who orders nearly everything she buys from Amazon, attest. But let’s agree that just as overly frugal consumers would hamper your sales, overly frugal innovators can derail their venture before it ever gets to the market.