I think it really depends. Money in the right hands can be amazing because you can aggressively pursue an idea that takes a lot more money to get off the ground. This requires a clear idea of what matters to the business. If you don’t have that idea, money can allow you to pivot and tune your product quickly and hire the very best.
The downside is the temptation to do everything, to not make decisions. Money enables you to do that too with disastrous results.
In short, money is great. Not having a clear, disciplined strategy is the problem.
Of course there are many moonshot projects where money is of vital importance. But for most things, the market is the best signalling mechanism available. Having little money forces you to be very attuned to the signals of the market, giving you an advantage over those who might insulate themselves from that feedback mechanism with a buffer of money.
It's hard to keep yourself attuned enough while also having money in reserve, though perhaps it is possible to have enough discipline to do so.
I think that’s totally true in cases where the market is a rapid and reliable feedback mechanism. It’s a delicate balance, and I can see how a large bank account leads to avoiding the hard choices or the rapid iteration necessary to find a good product market fit. See Quibi.
However,in some industries, the relationship isn’t quite as straightforward. I work in biotech, so in my case the market is realistically not going to be part of the story until we have a drug, which will be a long time from now. Until then our “market” is pharma partnerships or financing opportunities, both of which are only partially rational exercises in value determination. For us, lots of money is helpful to weather the storm and really build a great technology. There’s also little risk that if we treat a disease, we won’t have people want the treatment, so product market fit isn’t quite the same issue.
That said, it’s easy to lose focus by forgetting that the tech isn’t the point (finding a good drug is) and that we can’t try all options. But those are in our control.
The downside is the temptation to do everything, to not make decisions. Money enables you to do that too with disastrous results.
In short, money is great. Not having a clear, disciplined strategy is the problem.