Money is pouring into AI. Billions are being raised, teams are being hired factories and offices are being built, it’s another investment bubble.  For those of us who went through the last one this is a movie we have seen before. It rarely ends well.

 Lack of cash is one of the main causes of business failure.  Not only for start-ups, but even for some established businesses. Sometimes there is never enough, often the original forecast was wrong, sometimes the economy tanked. It’s a very common story and the one behind the very high percentages of businesses that fail.  Starting a business is not a sure-fire way to fame and fortune.  It can easily be a way to losing your house and your health.

But while cash starvation is common and easily understood, what is less understood is the fact that too much money can also be fatal.  Why?  Because it leads to lack of focus and a sense of invincibility. Those two combined can be very destructive. 

 In any company the sense that you can pursue all sorts of interesting ideas can be fatal.  Instead of focus you get new shiny things. Instead of a tiny number of relevant partnerships you get to work with all sorts of interesting people who are only too. happy to spend your money for you.  New markets are pursued before you have established your company in the first one, new products brought to market that are only half ready. You can afford that smart, well-equipped office.  It’s a recipe for disaster and that is what generally follows..

One founder said to me “we had to run out of money to understand what we were trying to do”.  It was a painful and expensive lesson.

It’s focus on the one objective the company has been founded for that delivers the results.

Only when you have done that can you move onto the next objective.