Embracing Scarcity: The Superpower for Growth and Resilience
Lessons from a Bootstrapping Entrepreneur on How to Thrive in Times of Scarcity and Uncertainty
♾️ ENDURE: Cultivating Growth.
It's no secret that scarcity can be a powerful driver of innovation and growth. When resources are limited, we're forced to get creative, think outside the box, and find new solutions to problems. But scarcity isn't just about finding new ways to do more with less. It's also about building resilience, staying adaptable, and learning from challenges.
One of the key factors that makes scarcity such a powerful force for growth is the way it can elevate our decision-making under duress. Studies have shown that when we're faced with a crisis, our brains kick into a heightened state of survival mode, allowing us to make faster, more decisive choices. This can be incredibly valuable in high-pressure situations, where quick thinking and action can mean the difference between success and failure.
In practical terms, this might mean embracing lean startup methodology, bootstrapping, and resourcefulness to drive innovation and growth. It might mean seeking out coaching and mentoring to help us unlock untapped potential in ourselves and our teams. And it might mean being willing to take calculated risks and experiment with new ideas and approaches.
Enter my good friend Chris Petersen.
Chris Petersen's Story: Bootstrapping for Survival
Chris is a seasoned executive and entrepreneur who has managed to build a career by bouncing between ‘BigCo’s’ such as P&G and Ocean Spray and his own (often wildly successful) startups. As a result, he continues to chart his own path and it’s exciting to see where he’ll end up next. For example, in mid-2022, he launched an export strategy venture that helps small and mid-sized US companies expand overseas (recently securing a sizable distribution contract for a client seeking to enter the Middle East market) and he is also involved with several other early-stage ventures in the CPG space supporting technical leads as a fractional executive (i.e., the business guy).
His “origin story”, however, is a powerful example of how the practical realities of scarcity—in this case unemployment—led to a very successful exit.
It was the spring of 2008 and Chris, a new minted MBA from the Gies College of Business a the University of Illinois Urbana-Champaign, found that the job market had dried up (scarcity) and all of his classmates were now facing unemployment after dropping thousands of dollars on an MBA.
With his wife pregnant with his first kid, the prospect of post-graduation unemployment with a newborn on the way wasn’t an option.
So he became an “accidental entrepreneur”.
He and a fellow classmate sprang to action and built one of the country’s most well-regarding diversity recruiting brands - MBA Veterans, an experiential marketing and software company that connected thousands of military veteran students and alumni of the worlds top universities with many of the worlds most prominent companies (Google, Accenture, P&G, J&J, Citi, etc.). Through it he both secured a full-time role (with client P&G) and kept growing it as a side-hustle long before side hustles were a thing.
By 2017, the company had grown to a point where it was an attractive acquisition and he and his partner put it up for sale. It was acquired in April of 2018 by a portfolio company of a great mid-market PE firm that has continued to build the company in ways that Chris and his co-founder couldn’t be more pleased with.
Chris's Three Lessons of Resilience
Big Things Fast: What would you say were the three most important lessons you learned about resilience when you were working on MBA Vets?
Chris:
30% Rule: In my experience- every goal takes roughly 30% longer than you anticipate. As a result, give yourself some grace and don’t get discouraged or quit when you don’t hit your metrics on the exact timeline that you set for yourself or your company. Just add 30% to your final plan and you’ll be much better off.
There is always a light at the end of the tunnel. You’re going to have a rough patch from time to time - this could be having to deal with a toxic boss, it could be from not raising funds from investors on your timeline, it could be from not closing a deal - just know that if you persevere you will get through to the other side, eventually, - and you’ll be glad you did.
There is no growth without discomfort. There are absolutely times in your career where being comfortable is great - you have a great team, a great boss, the hours are good, the paychecks come every week….however, I firmly believe that we don’t grow as people or as professionals without being uncomfortable. That could be taking a job in an area where you’re fully an expert or quitting your day job to try your hand as your own thing. Just take a risk from time to time (not always) and you’ll grow.
Comparing Startups and Big Companies: Scarcity and Innovation
Big Things Fast: After you exited your start-up, you continued to advise small start-ups and you’ve also worked in various big companies, what would you say is the biggest difference between how those two “worlds” view scarcity relative to the pace of innovation and experimentation?
Chris: This is an easy question to answer. In mid-sized to big companies you have significant resources (money and people and expertise), but far too much bureaucracy (layers of decision makers + personal agendas + ego + corporate processes) to actually achieve anything. In these environments, what is scarce is trust. That’s the trust in the small teams tasked with building something great and just letting them ‘go.’ As a result, most innovation is what I call ‘innovation theater.’ It half exists for awhile, but the bureaucracy eventually kills the team’s spirit or the company moves on to other things (agenda).
In startups and small companies you have zero bureaucracy and scare resources (money, really). Your challenge is finding resources or ways to bring in revenue without many expenses. This is what is nice about a service based company. With that being said, there are significant resources available to early stage founders these days (depending on the type of venture) so you need to get creative with finding them if you can’t self fund.
In terms of self-funding - I am typically skeptical of any entrepreneur not willing to put their own money into their own business. It shows they’re not truly committed to their idea. Also, I’m not saying you have to drain your life savings or 401k - even a little bit of self-funding demonstrates commitment.
Applying Scarcity Lessons to Your Life and Work
Big Things Fast: Any thoughts and / or final recommendations on how new or aspiring team leaders can apply these lessons, independent of organizational size or construct?
Chris: accept that at some point you’ll get discouraged - don’t let that sink you! When you come through the other side - you’ll be glad you did.
Embracing Scarcity for Growth
Scarcity, bootstrapping, resourcefulness to drive innovation and growth, taking calculated risks, and experimenting with new ideas and approaches: all key themes that fueled Chris’ ascent from ‘accidental’ entrepreneur to successful exit.
As new team leaders, how do you create systemic scarcity situations, that aren’t life threatening, where as individuals and as teams you can tap into the “superpower” of scarcity-driven hustle, experimentation, and innovation?
I.e., how can we apply these lessons to our own lives and work everyday?
First, it's important to stay focused on the problem at hand and resist the temptation to get bogged down in distractions or details that don't matter. It’s priority, not priorities.
Second, create a persistent sense of urgency but stay adaptable and be willing to pivot when your strategies aren't working. Remember Chris’ 30% rule and allow yourself the space to check & adjust.
And third, approach challenges with a growth mindset, seeing them as opportunities for learning and development rather than setbacks. Like Chris said, “there is no growth without discomfort and at some point you will experience setbacks.”
Building resilience through embracing scarcity is all about cultivating a growth mindset, persisting through change, and continuously improving ourselves and our teams.
Short of life threatening situations, I’m sure you can think of dozens of times when your were faced with a difficult, time-sensitive situation where you had to make a quick decision.
Think back on it now: do you recall how acute your critical thinking skills were? You also likely faced this if you’ve ever worked on a team. I’ve seen it dozens of times where a team that is typically bogged down in the morass of self-inflicted or externally applied corporate bureaucracy immediately becomes sharp, high-performing, and impactful when a crises hits. They become super-powered.
As a new team leader, how can you create iterative ‘micro-scarcity’ situations, that aren’t life threatening, where as individuals and as teams you can tap into this “superpower”?
What is one thing you will try tomorrow with your teams to create a sense of urgency, a sense of scarcity such that you fuel an environment filled with energy, innovation, and purpose?
