The Starving Startup

“It’s really not such a bad thing to not have much money,” said one SAP executive at the SAP Startup Forum in Berlin on August 15. “It makes you more creative and customer-focused – and that’s what leads to innovative solutions.” This statement, from an employee of a company that earned €4 billion in 2011, could have come across as rather condescending, if it weren’t for the fact that so many people believe it to be true.

Myth or fact?

The tale of the scrappy startup that operated out of a garage/basement/car for months before making it big is practically doctrine in places like Silicon Valley, London, Berlin, Tel Aviv, and Singapore. And almost always, that early period of hardship is seen as an important – if not deciding – factor in later success. But is this just the same romantic thinking that says a great painter, writer, or actor must suffer for his art? Live in a freezing garret and survive on bread and water? Is being financially secure really a disadvantage when it comes to creativity?

“Money doesn’t necessarily stop people from being creative,” writes Teresa M. Amabile, professor of Business Administration at Harvard Business School, in the article, How to Kill Creativity. “But in many situations, it doesn’t help either, especially when it leads people to feel that they are being bribed or controlled.”

Next page: When you can’t buy your way out

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