Kathleen Vohs, a professor at the University of Minnesota, conducted a series of experiments that examined the effect of money on people’s behavior. Here is a quick synopsis of three that provide insight into the impact of cash on behavior:
Researchers told subjects that they were going to play Monopoly. The researchers provided $4,000, $200, or zero dollars in Monopoly money. As they left the lab, a confederate dropped a bag of pencils, and the experimenters measured how many pencils the subjects picked up for the confederate.
The subjects who received $4,000 were the least helpful, the ones given no money were the most beneficial, and the $200 residents were in the middle.
Researchers gave subjects eight quarters for unscrambling phrases into sentences. Some terms dealt with money, and some didn’t. After the experiment, subjects were asked for a donation to a student fund.
The subjects who unscrambled phrases mentioning money donated less than those unscrambled phrases that had nothing to do with money.
Researchers placed subjects in a room with a computer in three states: no screensaver, a screensaver showing money, or a screensaver showing fish.
The researchers asked the subjects to set up two chairs for them to meet with other residents. The ones who had seen the money screensaver set up chairs farther apart than the ones who had a blank screen or a fish screensaver.
You could dismiss these studies because they fall into the category of “these were college students in research projects, so this doesn’t mean it’s how the whole world works.”
This is true and a critical example that makes the use of intrinsic method important, but they may indicate that exposing people to money affects their attitudes and that extrinsic rewards are not sufficient to make your startup endure.
The most obvious example of this is Wikipedia. Volunteers and “amateurs” created the world’s most incredible information resource; no one contributed for money. By contrast, Microsoft threw millions of dollars at Encarta, and the project still failed. The reason was the lack of an intrinsic idea and an inherent method.
Many organizations try to encourage their evangelists and customers to help by offering commissions and affiliate fees. Still, such enticements often raise suspicions among potential customers (Are you spreading the word because you’re getting paid?) and alter the nature of company-client relationships.
If you started a lousy company, money wouldn’t help. If you began a great company, you wouldn’t need to use cash, and bringing money into the picture may undermine your efforts.
Diversify the Team
A diverse team helps make a startup endure because people with different backgrounds, perspectives, and skills keep a startup fresh and relevant. By contrast, when an emperor runs a kingdom of sycophants and clones, the product will deteriorate.
“Populating your startup with a diversity of people and capabilities is a powerful way to make a startup endure.”
Ideally, you’d like people of different ages, genders, races, economic standing, religions, and educational backgrounds as part of your team. In addition to these apparent differences, you also want people to play different roles.
Populating your startup with diverse people and capabilities is a powerful way to make a startup endure. There’s no such thing as too much diversity in a startup that’s staffed to last.
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