The Parable of Brewster’s Millions
November 23, 2007 – 11:38 amAh, nostalgia. It’s different for everyone, but my nostalgiac tendencies lean towards the movies of my youth. Embarassingly enough, that includes such classics as Brewster’s Millions. For those not familiar with this film, let me summarize the plot: a minor-league pitcher (Brewster, played by Richard Pryor) inherits $300 million from a previously-unknown wealthy relative. The catch is that to receive the full fortune, Brewster must first spend a full $30 million in 30 days, with a variety of restrictions on how it can be spent (he can’t give it away, for instance, and he can’t end up owning anything new purchased with that money after the 30 days expire).
There are two things of interest to me related to this movie. The first is that the Richard Pryor version I just decribed was actually the seventh film incarnation of the story, all of which are essentially retellings of a novel written in 1902 (amounts change as the times pass - the original inheritances were one million spent to earn seven million). Since the Pryor version, the story has been filmed twice more (both times in Bollywood).
The second thing that interests me is the parallel between many of the dot-coms in both of the bubbles. I’m sure this isn’t the case in most companies, but sometimes it almost seems like people think of their venture capital as if it were the first part of the inheritance in Brewster’s story - they fritter it away on anything and everything, with nothing to show for it at the end. Aeron chairs, personal chefs (Google doesn’t count here), elaborate office space, presences at international trade shows before a product is built, and the like just aren’t necessary, and it appears to be all too easy to fall into thinking that they are when you’re flush with cash. You might say that when you actually do have money to burn, you’re vastly more likely to start burning it.
The moral of all this is: don’t rush so fast to get gobs of money for your startup. You might very well be better off with some financial constraints.
One Response to “The Parable of Brewster’s Millions”
Hi Ben,
Just watched your RubyConf 07 speech, and wanted to say first of all that it was very interesting, and secondly that the question session at the end was “interesting”
With respect to this post - I think there’s one situation where getting gobs of money is good: when recession is coming. Like now, for instance. Why’s it good? Because then you can spend the recession time hiring great people that have dropped off from other startups that ran out of cash.
In general, though, I definitely agree. As Paul Graham says in his article about the mistakes that kill startups, getting too much money can be as much of a problem as getting too little!
Daniel
By Swombat on Dec 13, 2007