August 17, 2012 // By: Heather McIlvaine // The Starving Startup
Steven Bradley, assistant professor of Management and Entrepreneurship at Baylor University, takes a less middle-of-the-road position: “If you run into problems and you have money, you bring in a consultant. If not, you start working out creative solutions: what can I do to ‘duct tape’ this problem using the resources I already have? Instead of buying your way out, you have to be creative with your resources, and that is what brings inventiveness, ingenuity and – ultimately – success to a company.”
His research backs this up. In a study of how startups performed during the financial crisis, he found that independent companies had a better chance of survival than startup companies that were subsidiaries, and protected by their parent firm during the economic downturn. “They were able to find creative ways to face challenges,” he says of the independent startups. “Those companies that have to figure out how to survive, do the best.”
This presents an interesting paradox for startups. Because isn’t the whole point to find funding and grow the business? Will the companies operating out of their garages today look back in twenty years and think, “If only we didn’t have all this money…”?