Innovation Needs Constraints

Innovation at a startup thrives when faced with Money, People & Focus constraints, as they bring clarity and prioritize resource allocation.

A.T. Gimbel
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May 23, 2023

Maximizing Innovation: The Power of Constrained Growth

We recently had a great Atlanta Healthcare Entrepreneur Meetup with Ryan Jones, CEO and co-founder of Florence Healthcare. Among the many great words of wisdom he had, he made the comment that innovation needs constraints. Why is that? Money, People, and Focus are three areas where constraints are helpful to your startup.

A. Money

The more money you raise, the more money you will spend (and that also means more dilution). When you have more money, you tend to try lots of things to see what works (and most won’t), versus spending the money on things you have already proven worked and you want to continue doing but better and at more scale.

B. People

It’s easy to say you are overwhelmed and need another person on the team. That almost always feels true, and a simple answer seems to be that hiring someone will fix the problem. However, hiring more people adds additional risk, training, burn, etc. that might not get to the root of the problem. This is another reason corporate innovation can struggle; too many people have to get involved to approve and push things forward. The more people involved, often the slower it goes (and as a startup your superpower is speed).

C. Focus

This is probably the most important area that needs constraints. I meet with many entrepreneurs who are stuck with a choice: SMB vs. Enterprise; B2B vs. B2C; Product A vs. Product B. When there is money and people available, it is easy to just say they will go after both. My experience is you need laser focus early-on in a startup, and trying to do too many things just means spending more time and money and just being okay at all of them. Instead, pick your focus area and be 10x better for that target customer and solution.

So when truly looking to innovate and build a business, put constraints on your business that forces you to make the tough decisions on focus and be great in that area before moving on to multiple areas.

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