From Shanghai to Silicon Valley: 3 Tips for Turning Lack of Resources into Strength

63 Comments

oscar_pistorius.jpg
The amazing Olympic hopeful Oscar Pistorius.

Alibaba.com, which pairs non-Chinese companies with Chinese suppliers, rode its IPO to a $26-billion valuation. Its founder, Jack Ma, explains his secret for success:

There were three reasons why we survived. We had no money, we had no technology, and we had no plan. Every dollar, we used very carefully.

Read that one again.

Excuses not to jump into the unknown are a dime a dozen. In the case of entrepreneurship, the “I don’t have” list — I don’t have funding, I don’t connections, etc. — is a popular write-off for inaction.

Little do most people know how often lack of resources is the ingredient that creates great companies.

It forces you to be clever, to dissect problems instead of throwing cash at them, and to innovate instead of imitating better-funded competitors.

The Florida-based PR agency Crispin Porter + Bogusky is a great example of this, as are a few little enterprises you might recognize — Microsoft and Nike come to mind — that started with less than $10,000 in funding.

There is often an inverse relationship between the amount of funding and the ultimate success of companies.

More than a few Silicon Valley angels and entrepreneurs have embraced this concept. In “VC’s New Math: Does Less = More?” from the Wall Street Journal, Peter Thiel of PayPal fame, who has invested in ventures ranging from Facebook (join the 4HWW group here, 433 people strong) to the film Thank You for Smoking, exemplifies the new breed:

His company also reflects how a new type of venture capitalist is emerging, as start-up costs for Internet companies decline sharply. Many start-ups now need a bankroll of no more than a few hundred thousand dollars to get rolling, compared with the millions of dollars required a few years ago.

Keep in mind that the hundreds of thousands still refers to funding, which can now be secured with a good idea and a little testing with rentable Amazon infrastructure that costs in the hundreds (not thousands).

How to re-evaluate your “weaknesses”?

1. Write down the positives of whatever you’ve been viewing as a negative. Don’t know anyone? You’ll be a fresh face and won’t have any strikes against you. No funding? It will force you to find the neglected options and set trends instead of following them.

I focused on blogs for The 4-Hour Workweek launch because I essentially had no other options. If I’d had a huge budget and free reign over the publisher, I can almost guarantee I would have succumbed to outside peer pressure and put the bulk into print or ineffectual PR firms. Hunger and desperation can be good things.

2. Consider the negatives of the opposites. What if you had too much funding? It would create a false sense of security and breed complacency, both of which are more fatal to a start-up than bootstrapping. It could also overexpose you before your product or service is ready. It could give investors too much influence over big decisions. Don’t assume more of something is 100% positive. It never is.

3. Look for dark horse role models.
“I can’t start a company — I’m too old.” Coronel Sanders started KFC after 40. The excuse doesn’t hold up. Can’t compete in sports because of a bum leg? Sprinter Oscar Pistorius has no lower legs and is aiming for the Olympics. You? For each reason for inaction you come up with, ask: has anyone overcome these or worse circumstances to do what I want to do? The answer is: of course.

Embrace your lack of resources, your weaknesses.

Far from a handicap, these are often the pressure points that will take you the furthest… if you’re able to use them instead of excuse them.

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Odds or Ends:

Just a quick note to Om Malik — get well, my good man. Dear readers, send your good vibes his way, as he just recently had a heart attack and can use the moral support.

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63 comments on “From Shanghai to Silicon Valley: 3 Tips for Turning Lack of Resources into Strength

  1. Hi Tim,
    Your book has made an impact on my life. I love the way you think.
    Little resources are no obstacle. After surviving bankrupcy, I’m starting out again with just one grain of sand!

  2. Hi, Tim. Thanks so much for the go-ahead to turn your tips on converting weaknesses into strengths into an article for my goal-setting blog.

    Just thought you would appreciate knowing that it’s now gone live. The tips are attributed to you and will be really useful for readers.

    Many thanks for your support.

    Mervin (United Kingdom)

  3. This is a great post. I especially love the “Look for Dark Horse Role Models” because that is exactly what I do. I continually study the lives of the people who have achieved what I want to have in life – and the more I do, the more I realise that they ordinary people with extraordinary drive, ambition, self belief and passion. These are all internal qualities that we can cultivate. For me right now, I'm recovering from some financial setbacks so I studied people like Donald Trump who came back from several billions of dollars in debt or Sam Walton who was bankrupt at least twice before having established what is now the world's largest company. I truly believe that our challenges are not unique. Whatever challenges we are facing, someone has already faced and overcome them. So if they can, then so can we.

  4. Another thought: the best time EVER to start a business is in a recession. I only had 5k that I saved up, but that money stretched to about 20k worth of goods and services because, during “the great recession”, cash is king. Furthermore, everyone was so willing to help me because they just weren’t too busy.

    Isn’t it ironic that the best time to start a business is when many other businesses are failing?

  5. I am so thankful that Chuck Holton steered me to your blog and after I viewed his video, your book. I am on the fourth chapter right now and can hardly put it down. I currently have four different websites and with the exception of my blogs, the other two have been created with open source software on a very frugal budget. Your book and this blog is giving me the information I need to take my business to the next level. I will be back checking here daily. Thank you so much!

  6. To paraphrase: For all the bitching people do about ambigous “things” “keepin’ a man down”; most people can’t even identify what it is their being held from. I believe this blog post addresses the critical thinking aspects of running any venture and hits the nail on the head. That being, the ability to sort out symptoms from sickness. Capital can be a remedy but lack of structure and bad deployment makes it a temporary fix. With enough explosives you could put an icecream truck into orbit… but a well designed rocket generally works better.

  7. ng For Sliding Down On The Snowy PeaksIf you have seen the people skiing on the snow mountain peaks, you have seen that they are packed up in warm clothes, wearing their goggles, using the sliders and the sticks and enjoying themselves while skiing on the snow covered mountains. There is no end to the different styles and designs of the ski clothing which ca