In 1983, the World Rally Championship was undergoing a seismic shift, and everyone knew. The year prior, in 1982, Audi had set a precedent for rally racing with their new car, "The Quattro." They obliterated the field due to an innovation their group had developed. You see, Audi had a competitive advantage that no other manufacturer possessed - all-wheel drive. This innovation proved to be massively helpful when racing on snow and gravel.
Lancia didn't care. They were bold and Italian and had a rear wheel drive monster called the Stradale 037.
Moreover, they raced like villains.
The first race of the 1983 season took place in January. To win the Rallye Monte Carlo in icy conditions, the Lancia team bought bags of salt and dumped them around especially difficult mountain curves before racing - a move that was within the rules but bastardly and controversial. The Lancia team also stopped mid-race to remove the winter tires for race tires - another wild tactic that was within the rules, sort of. They won first and second with this cleverness.
By the tenth race of the season, Lancia had a chance to win the World Rally Championship. On their home turf in Italy, at San Remo, they had one significant problem that every driver faced - dust. After each driver's sprint, the next driver would need to wait a few moments and go...into a cloud of dust. They set about finding an edge to this systemic issue that arose for each racer: they would delay and delay at the starting line until the dust went down enough from the previous driver to improve visibility - a move that was maybe within the rules and gave them an edge. They obliterated the Germans, placing first, second, and third.
They clinched the championship at San Remo and did not race in the season's final two races in Africa or Great Britain. They did not need to.
They were simply faster. They were simply done.
After that, a rear wheel drive car never won a rally championship again.
Startups are underdogs. Misfits. Have-nots. From the start, we do not have access to the resources or infrastructure of our larger competitors. We must find the edge and speed in everything we do.
We have access to two things that no large company can typically figure out - we have the spirit to test and fail repeatedly. We can also move astonishingly fast.
Failure and Speed.
We articulate a new idea and move quick and devise a way to take what we want - market share. We have the benefit of a clean slate and operate from a mindset of what we have to gain as opposed to what we have to lose. That is an important distinction. We don't mind failing towards a solution. Once you build something, you have something to lose. You have fear.
Before the 1983 race season, everyone expected Audi to repeat as champions, it was assumed, and thus they had something to lose. Lancia, on the other hand, had nothing to lose. They raced like it, taking chances that only a villain would take.
When I grew Menguin from nothing to an exit in three years, I had many sobering conclusions about the nature of new product development and entrepreneurship. I realized that most organic firm value came through the time component behind our venture as opposed to the monetary resources we raised. It was a classic theta risk versus financial risk balancing act. You have to use the time better than anyone else by failing, testing, and charging like a maniac, seven days a week. We did. In this sense, we raced like Lancia - doing whatever it took to win.
This realization came against the backdrop of us out-maneuvering our three "startup" competitors whom each raised over $40m in capital. We won because we used our time better with less financial risk - we were simply faster in those three years with less; the money didn't make the difference intuition would suggest. All the resources in the world will not buy you speed, in fact, typically the opposite happens. We also finished the race - that helps. You have to find a finish line.
Speed ÷ resources = resourcefulness