Constraints are Healthy

We all know that too little money can kill a business. There is a second thing that kills companies: Too much money.

You see it over and over that companies raise a huge round of funding. They are do things chasing growth that are just stupid. They over-hire, build out massive infrastructure or get fancy offices prematurely. They do all that without figuring out the fundamentals of their business.

The point here is that constraints are a good thing. You make better business decisions when things aren't easy.

For example, let's say that your business has a huge pile of funding. You go out to market and spend on stupid conventional marketing. Something like a Super Bowl ad with a sock puppet.

Excess capital has taught you a bad habit. In no situation is your business ready to run a Super Bowl ad. In fact, most businesses shouldn't ever use that channel.

Instead of figuring out how to market effectively and efficiently, money allowed you to make a sloppy choice.

The same applies to other areas of your company. Let's take talent as an example. If you have an unlimited supply of skilled employees, you won't do the hard work and learn how to build a product that uses right amount of automation.

Taking this principle further: constraints in life are a good thing, too.

How many kids do you know that have grown up without understanding money is finite? Are they often listless or into drugs? It happens all too often. They're lacking constraints and so skipped many hard lessons from early life.

Be grateful for your constraints. They train you to be better all the time.

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