When you think of company resources you may think of money, time, employees, technology, etc. I can say with utmost certainty that there is not a positive correlation between the number of resources a company has and the increased probability of success. It certainly makes it easier if you have resources but the most successful companies understand that the most precious resource is resourcefulness. Once you become resourceful, you will always find ways to get the resources you need to make your dreams come true.
However, companies fail all the time who may have had unlimited resources. Here are just a few examples:
Blockbuster: At one time Blockbuster had employed over 84,300 employees worldwide. At its peak in 2004, it had a market capitalization of over $5 Billion and annual sales of over $5.9 Billion. However, they failed to innovate and keep up with new technologies and in 2010, Blockbuster filed for bankruptcy. Blockbuster is now owned by Dish.
Toys R Us: After 70 years in business, childhood toy memories have vanished with the recent March 2018 announcement of the closing or selling off all Toys R Us stores.
Sears: Sears was once the juggernaut and industry leader in the retail space. They incorporated nearly 126 years ago in 1892. Amazon and online retailers have taken significant market share from Sears. Sears failed to embrace the new technologies that eventually led to their demise.
Sports Authority: On July 28th, 2016, Sports Authority closed all of their stores.
Kodak: Kodak was founded on Sept 4th 1888. It is one of the longest running companies in history but not without its many challenges. In Jan 2012, they filed for chapter 11 bankruptcy.
Juicero: Juicero was founded in 2013, raised $118.5 million and shut their doors in September 2017.
Jawbone: Raised $929.9 Million and after 17 years of operation, sold their assets in July of 2017.
A relatively young venture-backed company recently closed their doors. Shyp, a service meant to make it dead simple to ship anything by using your phone, had a lot of potential and raised $63 million from some of the most prominent VCs in the world. Customers loved them. Some even said their service was magical. They had an audacious goal of “being the new global standard in shipping.” However, even with all this money, they were still unable to succeed. Kevin Gibbon, their founder did a postmortem and here are a few of his quotes, “the investment we took, everything we got, wasn’t warranted for where the business was at. And I think that really hurt us. The expectations were way too high. We had a lot of capital. We had to deploy it. And I don’t think we were ready to do that. We prematurely scaled.”
Essentially Kevin knew they raised too much money, had too many resources and were forced to spend it without thinking resourcefully. This is common with VC backed businesses, they don’t give you money for it to just sit in the bank.
“While large, established companies have the financial freedom to explore new product categories for the sake of exploring, for startups it can be irresponsible.”
Rather than focusing on one thing and being the best in the world at it, Kevin lost focus and spent resources on other things.
“Growth at all costs is a dangerous trap that many startups fall into, mine included.”
The resourceful startup never falls into this trap.
At the end of the day, Shyp did not fail because they didn’t have enough resources, they failed because they failed to be resourceful.
Gibbon is said to be starting a new company, ”I think there’s an opportunity here to solve this pain point in a much more scalable way,” he says. “One hundred percent technology, and no warehouses.” Perhaps he will take a more resourceful approach to his next idea without the need to raise tens of millions of VC funding.
The older companies also failed to tap into the ultimate resource; resourcefulness. They no longer were able to develop the action enabling emotions that made them great companies, to begin with. They were no longer able to take any action. Internal innovation stalled. They were frozen in their antiquated ways because it is difficult to see the future when you are so wrapped up in the past. They fell into the dreaded “why change something if it is currently not broken” trap.
Google, on the other hand, has more resources than virtually any other company on the planet but they continue to tap into the power of resourcefulness. Why is that? For one, their mission of organizing all of the world’s information and making it universally accessible to all is an audacious mission that they are constantly trying to achieve. When you are always trying to fulfill the mission, you develop creative and innovative ways to help you get there.
In addition, when Larry Page, one of the founders of Google says to employees to always have a “healthy disregard for the impossible,” it empowers them to have an open mind which is critical to putting resourcefulness into action.
Google also has a mantra when releasing new products to market. They want each new product to be at least 10x better than any competing service that is out there. When you need to be 10x better than anyone else, your creative and resourceful juices begin to flow that enables you to be pushed to do things you may have thought impractical before.
Some of Google’s most successful products came out of something called 20% time. 20% time is given to engineers to work on virtually anything related to the business. Founders Larry Page and Sergey Brin highlighted the idea in their 2004 IPO letter:
“We encourage our employees, in addition to their regular projects, to spend 20% of their time working on what they think will most benefit Google,” they wrote. “This empowers them to be more creative and innovative. Many of our significant advances have happened in this manner.”
Some products that have been developed under the 20% time include Gmail, Adsense, Google maps and Google Chat. Adsense alone made up more than 23 percent — or $15.5 billion — of Google’s total 2016 ad revenue.
Amazon is another resource-rich and successful company that is extremely resourceful. Jeff Bezos, Amazon’s founder, and CEO says “The whole point of moving things forward is that you run into problems and failures,” He said in a recent interview.
He even let his four kids play with knives at age 4 because he says allowing them to take risks and be self-reliant teaches resourcefulness — a key trait both in business and in daily life.
Amazon has 14 principles they live by. Although most relate back to being resourceful and overcoming challenges regardless of position within the company, one, in particular, is the catalyst for a lot of Amazon’s success.
“Accomplish more with less. Constraints breed resourcefulness, self-sufficiency and invention. There are no extra points for growing headcount, budget size or fixed expense.”
In the early days of Amazon in 1994, Jeff Bezos made his desk out of an old door. This led the way to other employees making their desks out of doors and this remained the quintessential example of the company’s frugality.
Today the company still gives out the “Door Desk Award” to individuals and teams that create significant savings for the company and customers.
Amazon is also known for being resilient and making big bets. In fact, in his first annual letter to Amazon shareholders in 1997, the CEO writes, “Given a 10 percent chance of a 100-times payout, you should take that bet every time.”
An example of this was their launch of Amazon Auctions in 1999 to compete with eBay. At first pass, this was a complete failure. Amazon then launched another service that completely flopped. After a third try, the things they learned from the previous failures led to a huge success called Amazon Marketplace, a platform for third-party sellers on Amazon. According to Credit Suisse, they estimate that Amazon Marketplace will contribute $135 billion to Amazon’s annual sales. They also estimate that by 2020, the marketplace will have grown to $259 billion.
“Things don’t work, you have to back up and try again. Each time you back up and try again, you’re using your resourcefulness, you’re using self-reliance. You’re trying to invent your way out of a box.” says Bezos.