Seth Godin reminds us today of the lesson explored in this previous post and another by Ed Sim at BeyondVC: First, money is a challenging motivator for innovation and success; it is a prize worth fighting for. Second, the lack of money is a constraint or challenge that forces further innovation and improvement. Third, too much money or resources on hand can sour the positive forces of challenge and lead to failure. To build on Seth's lesson, I'd like to provide some examples here:
Dot-coms in the late 90s went bust because they were given gobs of VC and IPO money. The game was about spending money the fastest, rather than wisely. Success was defined as an IPO, rather than building a long-term success.
Meanwhile, post-bubble startups like 37signals learned that less people, less resources, and less time are actually a competitive advantage.
Natural resource-rich nations from Nigeria to Venezuela, have failed to build strong governments or economies because they are spoiled by "unearned" riches.
Microsoft has rested on billions in guaranteed profit while hungry competitors like Google, Firefox and Linux struggled to merely exist and earned success through great innovation.
Mitsubishi failed to turn around because it was propped up by Japanese banks and Daimler-Chrysler. Nissan successfully turned around because it had little support from the government or other partners; it was forced to take dramatic action like bringing in a foreign CEO, Carlos Goshn.
Government wastes its citizens' money because it has too many resources and little pressure to show results. Tax cuts are smart because they limit the funds available to spend (usually...).
The original Star Wars movies were better because Lucas had fewer resources and had to earn his success. For the recent three, he had an unlimited budget and guaranteed fan base.
I could go on and on, but I think this helps prove the point!