Constraint-Fueled Creativity at AOL

Capital constraints forced AOL to let users entertain themselves—and it worked.

The Constraint

Under CEO Steve Case, AOL was the smallest and most poorly funded of the online networks. It had no money to spend on content and no relationships with advertisers. Almost by default, AOL let users entertain themselves, which the firm described as a bet on “electronic community.”

The Insight

Capital constraints can force a company to pursue a different, imaginative path that leads to a creative business solution. Counterintuitively, constraints of capital or otherwise can lead to breakthroughs.