Innovation plays a significant role in carrying startups forward and improving business sustainability. Innovation helps steer growth in any business or startup, so it is necessary to allocate funds properly.
A subtle inclination on either side could pivot the scale leading to complications in the future. A balance is required to be maintained between the Innovation factor and the funds’ allocation so that businesses could operate smoothly.
Innovation might sound like a buzzword to many. Still, it is a crucial element required to be practiced and incorporated by any startup that desires to be relevant to the changing atmosphere.
Before discussing how lack of funds could fuel innovation, let us first discuss why innovation is important for any business or startup.
Continuous Innovation is a factor that helps gain precedence over one’s competitors and ensures real sustainability in the markets. The business strategy behind a new product or a startup needs to be strongly formulated. The stronger the strategy, the stronger are the possibilities of reformation, and the lesser is the possibilities of its termination.
When in 1994, Jeff Bezos started selling books online with amazon.com, large bookstore chains like Barnes & Noble, Waldenbooks, and Crown Books weren’t even of the opinion that their businesses would be affected with the advent of the internet.
They were delayed at implementing the necessary reforms for the internet era, leading to massive depreciation in their market cap.
Fosters Economic Growth
Innovation can help multiply the revenue streams of any business by introducing new remunerations that ultimately foster the company’s economic growth when it is starting up.
Eventually, it helps increase the company’s Return on Investment by resorting to new mindsets, new plans, and new ideas and getting rid of the old and possibly obsolete ones.
Enhances Company Culture
A startup is built by people who work for their continuous personal growth. And most certainly, improvements in the ways a company operates helps enrich the work culture of the company.
To foster continuous growth, employees need to tackle new sets of challenges regularly. And innovation provides them with this opportunity, which helps them enhance their skills, leading to their growth and, in turn, the company’s growth as a whole.
How can lack of funds facilitate innovation?
Funds do play a significant role in mandatory monetary requirements, but at times, a lack of funds can widen the prospects of innovation. This is because innovation is a factor that is less dependent on money invested and more on the urgency of its requirement and the enthusiasm of the people involved.
It would be very suitable to state that,
The Insufficient fund is a factor that can help drive Innovation in Startups.
In the follow-up points, we will find out how lack of Funds can foster Innovation in any Startup.
Promotes Realistic Thinking
When working on a bootstrap venture or startup with a lack of funds, the approach to innovation is entirely different from the approach to innovating a product that has surplus availability of funds to be invested.
With fewer funds to spare, we start to think more clearly and logically while introducing any feature in our application or product.
It is always in the absence of funds that we develop unorthodox methods to implement certain aspects of technology that otherwise would have cost us a huge chunk of money.
Innovation, in the availability of adequate funds, usually takes more time to execute. Scarcity of funds creates an urgency for the product delivery and helps entrepreneurs to think clearly and consciously. More the time invested in innovation, the more are the number of dollars spent.
A side benefit of this is that it speeds up the innovation process, which usually takes time and helps in faster execution and timely delivery.
Increases Efficiency and Productivity
When funds are inadequate, entrepreneurs tend to introspect before implementing a particular feature in their application. This leads to the discarding of all the clouded possibilities and leads to a more systematic execution.
This results in the formation of the exact product which most aptly displays the promising features we anticipated with the least number of bugs encountered.
Formation of Smaller Team
Whether we desire to build a product prototype or incorporate an innovative feature in an already existing product, we do not require too many people sitting around the discussion table to sort out ideas.
The lesser the number of people involved in the innovation phase, the higher is the efficiency of making decisions because more reliable ideas are generated by people who trust the product and believe in its validity.
Innovation comes from creating environments that facilitate the evolution of Ideas and not just from providing people with incentives. Lack of Funds is undoubtedly an essential factor, but creative innovation driven by passion is another excellent factor that drives startups and businesses.