Adversity caused by limited options isn’t necessarily a bad thing. While having (too) many options may seem desirable. It’s not always the case.
Surely, by now, many are familiar with the paradox of choice or “choice overload” principle. Presenting consumers with many options doesn’t necessarily boost sales, quite the contrary. As studied by Sheena Iyengar from Columbia – and Mark Lepper from Stanford University.
An overfunded company has the luxury to try a couple of things simultaneously. Launch a bunch of new features, enter a new market segment, and so on. This can lead to possibilities paralysis.
A company that is underfunded, on the other hand, doesn’t have that same luxury. Arguably, in the absence of that luxury, focus increases. It’s like a hit or miss situation. Probably the reason why Amazon’s motto is: it’s always day one. This isn’t a plea for deliberately underfunding your company. Being chronically underfunded is expert-level adversity and can take the “living soul” out of a company.
Maybe entrepreneurs are sadomasochistic in a weird way. Sometimes, actively looking for adversity can be a good thing. Starting a company isn’t: maybe I’ll do some of this, and then some of that, and maybe some of this as well.
Starting a company is do or die.
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[…] While running a company, sometimes there are too many liberties, which seems odd. Who wouldn’t want a whole bunch of liberties? The fact of the matter is, when a company spreads itself too thin, engaging in (too) many initiatives simultaneously, survival chances diminish — resulting in possibilities paralysis. […]