It’s assumed that hard work and smart thinking always result in business growth. But the opposite is often true: not all growth is beneficial, and some growth can actually reduce your resilience and your autonomy.
Staying small doesn’t have to be a stepping-stone to something else, or the result of a business failure—rather, it can be an end goal or a smart long-term strategy. The point of being a company of one is to become better in ways that don’t incur the typical setbacks of growth. You can scale up revenue, enjoyment, raving fans, focus, autonomy, and experiences while resisting the urge to blindly scale up employee payroll, expenses, and stress levels. This approach builds both a profit buffer for your company to weather markets and a personal buffer to help you thrive even in times of hardship.
Just as Michael Pollan’s food ideology is summarized in three simple rules—“eat food, not too much, mostly plants”—the “company of one” model can be laid out in a similar fashion: “start small, define growth, and keep learning.”
Defining a Company of One
A company of one is simply a business that questions growth. A company of one resists and questions some forms of traditional growth, not on principle, but because growth isn’t always the most beneficial or financially viable move. It can be a small business owner or a small group of founders. Employees, executive leaders, board members, and corporate leaders who want to work with more autonomy and self-sufficiency can adopt the principles of a company of one as well. In fact, if big businesses want to keep their brightest minds in their employ, they should look to adopt some of the principles of companies of one.
Next, let’s look at the four typical traits of all companies of one: resilience, autonomy, speed, and simplicity.
Resilience
Being or becoming a company of one has a lot to do with resilience: the capacity and fortitude to recover quickly from difficulties—like a changing job market, or being fired. Like a shift in a larger company’s focus, or the need to adapt to new disruptive technology—or even to avoid being replaced by robots.
Resilient people possess three—absolutely learnable—characteristics. The first trait that resilient people have is an acceptance of reality. They don’t need for things to be a certain way and don’t engage in wishful thinking. Instead of imagining “if only this changed, I could thrive,” they have a down-to-earth view that most of what happens in our lives is not entirely within our control and the best we can do is to steer the boat a little as we float down the river of life.
The second characteristic of resilient people is a sense of purpose—being motivated by a sense of meaning rather than by just money.
The last trait of resilient people in a company of one is the ability to adapt when things change—because they invariably do.
Autonomy and Control
To achieve autonomy as a company of one, you have to be a master at your core skill set.
But bear this in mind: achieving control over a company of one requires more than just using the core skill you are hired for. It also requires proficiency at sales, marketing, project management, and client retention. Whereas most normal corporate workers can be hyperfocused on a single skill, companies of one, even within a larger business, need to be generalists who are good at several things—often all at once.
Speed
Speed is not merely about frantically working faster. It’s about figuring out the best way to accomplish a task with new and efficient methods.
By being smarter at getting more work done faster when you work for yourself, you can create a more flexible schedule that fits work into your life in better ways.
Another aspect of speed in a company of one is the ability to pivot quickly when a customer base or market changes. As a solo worker or small company, a company of one finds this much easier to do, because it has less infrastructure to cut through.
Simplicity
Typically, as companies gain success or traction, they grow by taking on additional complexities. These complexities can often detract from a business’s original or primary focus, resulting in more costs and the investment of more time and money. For a company of one at any size, simple rules, simple processes, and simple solutions typically win.
With this goal in mind, companies of one routinely question everything they do. Is this process efficient enough? What steps can be removed and the end result will be the same or better? Is this rule helping or hindering our business? For a company of one to succeed, a strategy for simplifying isn’t just a desirable goal but an absolute requirement. Having too many products or services, too many layers of management, and/or too many rules and processes for completing tasks leads to atrophy. Simplicity has to be a mandate.
BEGIN TO THINK ABOUT:
Whether growth is truly beneficial to your business
How you could solve business problems without just adding “more”
Whether you really need funding or venture capital for your idea, or are simply thinking too big to start
Staying Small as an End Goal
Too often businesses forget about their current audience—the people who are already listening, buying, and engaging. These should be the most important people to your business—far more so than anyone you wish you were reaching. Whether your audience is ten people, a hundred people, or even a thousand people, if you’re not doing right by them, right now, nothing you do regarding growth or marketing will make a lick of difference. Make sure you’re listening to, communicating with, and helping the people who are already paying attention to you.
The current business paradigm teaches us that to make a lot of money or to achieve lasting success, we need to scale our businesses—as if larger businesses are less prone to fail or to become unprofitable (obviously not true). In fact, according to this view, before our imagined businesses are even off the ground we need to create them with the sole purpose of growth—and possibly eventual sale for a huge profit. This paradigm, however, isn’t rooted in truth, nor does it hold up to critical investigation.
Companies of one aren’t always startups in the traditional sense. Many startups focus on growth, buyouts, employees, lavish offices with foosball tables and open-concept floor plans, and massive profits at any cost, and they tend to rely on investors for initial cash. Companies of one instead focus on stability, simplicity, independence, and long-term resilience and rely on starting small and becoming as profitable as possible, without the need for outside investment. Companies of one, with their focus on what can be done in the here and now, not what can be done with investment, can also be started without an injection of capital.
For companies of one, the question is always what can I do to make my business better?, instead of what can I do to grow my business larger?
BEGIN TO THINK ABOUT:
Whether you are paying attention to your existing customers or to just your potential customers
Whether you could make your business better (however you define that) instead of just making it bigger
Whether your business really needs scale to succeed
Where the upper bound to that scale might be, the place where profit and enjoyment have diminishing returns
How you could turn envy of others into enjoying their successes and learning from them
What’s Required to Lead
Companies of one do require leadership. If you work for yourself, you’ve got to be a leader to successfully pitch your services or products, as well as maintain relationships with clients or customers. If you work with a team of contractors or freelancers, then you’ve got to be able to lead them as well. Within a corporate setting, you cannot gain the control, resilience, and speed required to be autonomous without demonstrating leadership, even when corporate structure says that leadership is not your role.
Companies of one are sometimes quiet people who are internally motivated to make a difference in the world without shouting. Many people think they aren’t the type of person who could start and run a business or inspire others to work with them or buy from them. I myself am the first to admit that I’m socially awkward and not well spoken in groups—I have a hard time functioning at everything from conferences to parties. What I have done is structure my business around what I’m better at—online teaching and written communication. I’ve turned my introversion into a positive tool, instead of an excuse for inaction. I find ways to lead that suit my personality and skill set: I avoid speaking to large groups and instead lean more on one-to-one communication.
Since my practically nonexistent ability to lead could easily be a detriment to my company of one, I only work with freelancers and contractors who don’t require management of any kind. They’re A-players who know exactly how to get their work done. I simply need to provide them with the parameters and let them do their work. I give the people I hire full autonomy to do their jobs so I can do mine, with no need for meetings, or check-ins, or management. I ask them to let me know if a problem comes up; if I don’t hear from them, I assume that their silence means they’re accomplishing their tasks. I let my perceived shortcomings, like being awkward or bad at managing others, work for my business, not against it. My leadership style may require that I spend more when I hire (A-players come at a premium), but their work is always worth it and nets a positive return for my business.
Even a company without employees still requires constraints. In serving clients with very specific deliverable requirements as well as customers who need your product to perform in a precise way, the more you can lean on processes, systems, and reusable building blocks (from code to marketing language to visuals) in your leadership, the better and faster you’ll be with your work and the less you’ll require in terms of hours worked or people hired, even as you gain more in terms of revenue, finished processes, and paid customers.
BEGIN TO THINK ABOUT:
Where you could strike a balance between autonomy and guidance
What areas you could learn more about that would benefit your business and make you a more well-rounded generalist
Steps you could take to strike a balance between hustlin’ and recuperation
Growing a Company That Doesn’t Grow
Most companies grow for four reasons: inflation, investors, churn, and ego. By examining each, we can be ready for the decisions we’ll have to make and better able to prevent social or business pressure from swaying us into doing something we don’t want to do or something that isn’t right for our business.
Inflation always happens, and if a business can’t keep up, its profits will shrink. The simple solution is to raise your rates each year to keep up and then invest any extra profit in those places that pay out higher than inflation (in other words, don’t keep the bulk of your business profits in a bank account that earns 0.001 percent interest).
Investors, even if they own the company, are the biggest reason businesses want to grow. If a VC firm puts $1 million into your company today, it will want to see a return at least three times that much (and more if they’re early-stage investors) within a few years. To hit those goals, growth has to be excessive. Even if you invest your own money to start a company, you’ll want to see a good payoff for the risk you took. However, if you’re able to start small—with little to no upfront investments—you can focus on running your business and making it better for the customers you serve instead of being constantly aware of the need to be “paid back” for what you put in.
Churn is what happens when existing customers decide they don’t want to be customers anymore. So the revenue they generated needs to be replaced with revenue from new customers. If your churn is higher than your user acquisition rate, then you’re in a downward spiral. Most of the time, companies try to fix churn, as we saw with Kate O’Neill, by focusing on adding more customers to the mix instead of working at reducing the reasons existing customers are leaving. Adding a new customer costs five times as much as keeping an existing one. So while prioritizing acquisition over retention can aid growth, it’s also extremely expensive.
Ego is the final reason most companies want to grow. It’s also the trickiest, because it’s harder to overcome. As a society, we give people more clout and respect if they own a large company, so building one is a desirable goal. Many of us dream of being in charge of a large company but fail to look at the bigger picture and think about the impact of such growth on our personal lives, or even on the type of work we enjoy doing. Growth adds complexity, often strains relationships, and ratchets up stress. Not all of us have a father who’s got a sticky note on the family computer monitor that says, “OVERHEAD = DEATH.” When we start to examine why we want to see more and more growth, we may conclude that the main reason is wanting to appear more respected than we really are. Ego is usually overcome once we determine what our reason was for starting our business in the first place.
People sometimes tend to focus on the wrong things when starting a business, like office space, scaling, websites, business cards, computers. You can add expenses or bigger ideas later, once revenue is coming in. But if your idea requires a lot of money, time, or resources to start, you’re probably thinking too big too soon. Scale it down to what can be done right now, on the cheap and fast, and then iterated upon.
To start a company of one, you should first figure out the smallest version of your idea and then a way to make it happen quickly. Automation can happen later. Scale, if desired, can happen later. Infrastructure and process can happen later. Focus on where you can test the waters without a massive investment of time or money, and then pay attention to what happens when casual contacts turn into customers, even if it’s only a handful at first. Why did they buy? What motivated them to do so? How can I keep them happy? And most important: How can I help them succeed?
Scaling down an idea that you can start right now puts the focus on helping people immediately with what you have available right now and are resourceful enough to provide, like a sort of business MacGyver. If your business only has an expertise plus a figurative stick of gum, a paper clip, and a ball of twine, think: Whom can I help with these things? In short, start small. Start with just the smallest version of your idea and a way to make it happen. Instead of waiting (sometimes for years) for bigger wins to happen, you can use small wins to propel you. That’s actually a much smarter way to launch. Easing up on the “growth equals success” mentality opens you up to starting and becoming more profitable much sooner.
BEGIN TO THINK ABOUT:
How you could prioritize your existing customers or transform them into repeat customers
The smallest version of your business idea that you could start with now, with little to no investment
How you want to grow as a business, or as an employee who doesn’t require transitioning into work you don’t actually want to do
Determining the Right Mind-Set
To succeed as a company of one, you have to have a real underlying purpose. Your why matters as an unseen but ever-present element that drives your business. Your purpose is more than just a pretty-sounding mission statement on your website; it’s how your business acts and represents itself. And it’s what your business sometimes places above even profit.
Your purpose is the lens through which you filter all your business decisions, from the tiny to the monumental. We’re talking about who you work with, what you offer, where you focus your time and energy, and even how you define your audience. Determining the unique purpose that underpins your company of one isn’t always a quick or easy process, and there’s no spreadsheet that can crunch some numbers and spit out the answer. Figuring out your purpose requires actual reflection on both your own desires and the audience you want to serve. After all, doing business boils down to serving others in a mutually beneficial way. Customers give you money, gratitude, and a shared passion, and you address their problems by applying your unique skills and knowledge to what you sell them.
Purpose and passion are quite different. While purpose is based on a core set of values held by a company or even a business owner and shared with customers, passion is simply a whim based on what we think we enjoy doing. The tired business advice that we should all “follow our passion” implies that we are entitled to getting paid to do work that is always enjoyable.
When you focus on solving problems or on making a difference, passion may follow, because you’re actually involved in the work you’re doing instead of just dreaming that you might be passionate about something. Cal Newport, the best-selling author of So Good They Can’t Ignore You, argues that passion is the side effect of mastery. To Newport, following your passion is fundamentally flawed as a career strategy because it fails to describe how most successful people ended up with compelling careers and can lead to chronic job-shifting and angst when your reality falls short of your passionate dream for your career. Newport believes that we need to be craftspeople, focused on getting better and better at how we use our skills, in order to be valuable to our company and its customers. The craftsperson mind-set keeps you focused on what you can offer the world; the passion mind-set focuses instead on what the world can offer you.
Engaging work helps you develop passion, not the other way around. This kind of work draws you in, holds your attention, and gives you a sense of flow (being absorbed in the work and losing track of time). Engaging work comprises four key components: clearly defined assignments, tasks you excel at, performance feedback, and work autonomy.
The final part of aligning your mind-set with a company-of-one mentality is learning to handle the onslaught and weight of opportunities and obligations. Just as growth in revenue and employees should be questioned as to whether or not it will make things better or simply bigger, we must also question the idea that a busier life, with a packed schedule, is a better life. Opportunities are just obligations wearing an appealing mask. There might be a positive outcome to seizing them, but they always come at a cost—in terms of time, attention, or resources. No matter how hard you try, you can’t scale the amount of time in your day. And since you can’t somehow buy more hours, you need to find ways to use those hours better.
Companies of one need to become adept at “single-tasking”—doing one thing for an extended period of time without distraction. This capacity helps you focus on the right tasks, do them faster, and do them with less stress.
The funny thing, though, is that any task will take up the time we give it. So if we give ourselves eight hours to work each day, our work will take eight hours, and if our tasks take less time than that, we usually fill much of the “extra” time with busywork. If we reframe the question of how we spend our time, however, we can start to figure out how long each of our tasks actually takes. Perhaps we need only four hours a day to get our work done.
BEGIN TO THINK ABOUT:
The true purpose of your business and whether it shows up in your actions (not just in your marketing material)
What you are skilled at that is already in demand and where else that skill could be leveraged
Where you could test your leap into something in a small way first
How you could align your day/schedule to be focused on single-tasking
Personality Matters
Personality—the authentic you that traditional business has taught you to suppress under the guise of “professionalism”—can be your biggest edge over the competition when you’re a company of one. What’s even better is that while skills and expertise can be replicated, it’s damn near impossible to replicate someone’s personality and style. Especially in a company of one, where you aren’t the largest player in your niche and probably not the cheapest, using your quirks and standing for something can be exactly how and why you gain customers’ attention.
The key is to unlearn being boring. That is, you need to learn how to elicit a strong emotional response to your business, and the personality of your brand, because while it’s easy to forget or lose interest in information, it’s much harder to forget strong emotion. You can do this by allowing your business to have some aspect of your own innate personality or quirks. Fascination in a product or service builds an emotional connection, and emotional connections hold attention.
It can be scary to draw that line in the sand—especially when it’s your business and livelihood. Doing so immediately alienates certain people or entire groups. But taking a stand is important because you become a beacon for those individuals who are your people, your tribe, and your audience. When you hoist your viewpoint up like a flag, people know where to find you; it becomes a rallying point. Displaying your perspective lets prospective (and current) customers know that you don’t just sell your products or services. You do it for a specific reason.
As a small business or one that isn’t aiming to grow rapidly, you can use polarization to provide an avenue for reaching your potential audience—without massive advertising spends or paid user acquisition—by getting people talking.
BEGIN TO THINK ABOUT:
How you could infuse your own distinct and unique personality into your products and company image
Where you could lean on what makes your business or product quirky or different to garner attention in the market
The One Customer
There’s overwhelming evidence that treating customers well, as if they’re your one and only customer, drives value to your bottom line. In short, helping your customers succeed and providing amazing service are good for business.
Being a profit-focused company of one (fewer expenses increase revenue just as much as more profits do), you can forgo vapid user expansion at any price and concentrate instead on retaining, pleasing, and helping your customers. In the long run, this approach costs far less and aids your company far more.
In short, customer happiness is the new marketing. If your customers feel that you are taking care of them, then they’ll stick around and they’ll tell others. This is the precise way in which companies of one can compete with behemoths in their market—by outsupporting them. It’s much harder to compete with bigger companies on aspects like volume, low prices, or logistics. But it’s much easier as a smaller business to compete on the personal touches—going the extra mile and treating customers like humans, not numbers. That’s a major advantage for any company of one.
BEGIN TO THINK ABOUT:
What you could do to ensure that your existing customers feel both happy and acknowledged
Where you could exceed expectations with your customer service
How you could create opportunities for word of mouth and referrals
How you own and then fix mistakes
What you could do to ensure that your customers end up with wins
Scalable Systems
People tend to start with a business model and then become unhappy when their days are filled with tasks they don’t enjoy. Instead of thinking, What product can I create? or What service can I offer, James believes that we should first think: What type of life do I want? and How do I want to spend my days? Then you can work backwards from there into a business model that allows you to create scalable systems to deliver your product to your audience.
By constantly working toward reducing one-to-one points of contact with customers and focusing instead on one-to-many relationships, a company of one can scale its connection with customers without actually scaling its business. Yes, personal touches are essential, and direct communication with customers is always required to learn, empathize, adapt, and revise—yet the majority of connecting can be done en masse. A perfect example is email marketing. It requires the same amount of effort to send an email to 50,000 people as it does to send that same email to one person. This is precisely why most companies of one rely heavily on newsletters and email automation: these are powerful tools for building relationships, trust, and even revenue.
I advise scaling up certain aspects of your business, but collaboration is the one area where companies of one should scale down—from an environment of always-on, always-available, slow-drip messaging distractions to a regimen of clearly defined times to work together to accomplish large tasks together. Otherwise, you run the risk of being available for distraction during every hour of every day.
BEGIN TO THINK ABOUT:
Where you could use automation and technology to scale so your business doesn’t have to
How you could outsource tasks that require massive scale
How you could add personalization and segmentation to your one-to-many communication channels
Teach Everything You Know
To stand out and build an audience as a company of one, you have to out-teach and outshare the competition, not outscale them. This approach has several positive outcomes. The first is that creating a relationship with an audience that sees you as a teacher sets you up to be perceived as the domain expert on the subject matter.
The second benefit of out-teaching your competition is the chance to show an audience the benefits of what you’re selling.
The third reason teaching works is that by educating new customers on how best to use your product or service and showing them how to get the most out of it or how to be the most successful with it, you also ensure that they’ll become long-term customers and tell others about their positive experience. The final reason teaching works for a company of one is that, except for certain proprietary information—like your unexecuted ideas, business strategies, or patentable technologies—most ideas or processes don’t need to be kept under lock and key. Being transparent in almost all areas, while running your company aboveboard, can only help build trust with your customers.
There are also very few completely new ideas. Most ideas just riff off existing companies, plans, ideas, or solutions. By focusing a lot of time and energy on protecting ideas instead of sharing them, you run the risk of not letting them get better through critical feedback from others. Even sharing your business idea with potential customers has its benefits, as they can weigh in early, before you’ve invested a lot of time or resources, and help you shape and position the idea into an even better execution.
Customer education—providing an audience with the knowledge, skills, and abilities to become an informed buyer—is one of the most important parts of a sales cycle. Too often we’re so close to what we’re selling that we assume others are also experts on it, or know what we know, but most of the time that’s not the case. Customers don’t always know what they don’t know, or don’t know enough about something to realize how useful or beneficial that information could be to them or their own business.
BEGIN TO THINK ABOUT:
What you could begin to share with or teach your customers or audience
How you could focus more on executing ideas than on protecting them
What investments you could make in consumer education as a marketing channel
What you could share that would position you or your company as an authority in a niche
Properly Utilizing Trust and Scale
In studying how trust is built between companies and consumers, Urban has found that there are three aspects of trust: confidence (“I believe what you say”), competence (“I believe you have the skills to do what you say”), and benevolence (“I believe you’re acting on my behalf”). He’s found countless instances of companies that advocate for their customers. This is a long-term investment in honesty and transparency, and every company of one needs to employ it from the start.
Why is this important to you and your company of one? Because the power of recommendation—or word of mouth—lies in its ability to create trust by proxy. If your good friend tells you that a product is worth buying, you’ll listen because you trust your friend; some of that trust is then passed on to the product they’re recommending. This works online to some degree as well: the people you follow have earned a bit of your trust, so you tend to trust their recommendations.
You don’t need massive growth or scale to realize profits; since you can see benefits with much less mass, you can capitalize on products and consumer relationships that build referrals. Companies of one can truly benefit from word of mouth because it’s easier for a company of one to create these kinds of personal relationships and stay more closely connected with customers.
For companies of one, focusing on existing and loyal customers as brand advocates—instead of trying to build an affiliate program of anyone who wants to make a quick buck referring you—creates a much greater trust, because those promoting your product already have a direct relationship with it. These are the customers who can tell the story of how they benefited from purchasing your product or service.
No company or product is too good to not have to consider and utilize marketing. No matter how great your product is, if you aren’t reaching the right audience, you won’t sustain your business. Marketing is also no longer a silo job function within a larger organization—it’s embedded in every role and aspect of a business, from customer support to product design. It’s also not a single event—focused on a launch, for example. It’s the sum total of everything your company does that a potential or actual customer sees or interacts with, from emails to casual conversations to tweets.
Where companies of one can use their focus on betterment over growth in marketing is by focusing on a specific niche instead of a massive market. Trust is more easily established within a smaller customer base because it’s easier to stand out as an expert or to gather referrals that hold weight from other industry experts in that niche.
By making customer happiness your top priority over new customer acquisition and then incentivizing customers to share the word about your business, less of your money needs to be spent on promotion. With a company of one, which can be profitable at any size, such slow but sustainable growth makes sense. You start with the idea of creating a trust-centric business, build products that customers love, make sure they’re educated and happy with what they’ve purchased from you, and then give them systematic ways to share their success with others.
BEGIN TO THINK ABOUT:
How you embed trust and honesty as a marketing strategy in your company of one
The relationships you could foster with your customers to incentivize them to share word of your business with others
How to ensure—whether through email, support, or social media—that you’re always honoring social contracts with your customers
Launching and Iterating in Tiny Steps
As a company of one, you need to reach profitability as quickly as possible. Since you’re not relying on massive influxes of cash from investors, every minute you spend getting set up and started is a minute when you aren’t making money. So getting your product or service released as soon as possible, even if it’s small, is both financially wise and educational, since a quick release can also serve as a perfect learning experience. The first version of a product doesn’t need to be huge—it simply needs to solve one problem well and leave your customers feeling better than before they purchased it.
In determining your minimum viable profit—the point at which your business is operating in the black (we’ll call it MVPr from here on in)—keep in mind that the lower the number, the quicker you can reach it. So it’s important to scale up your timelines and focus on core features only, reduce expenses and overhead, and ensure that your business model works at a small scale first. The assumption at work here is that your MVPr—not the number of your customers, not your measured growth, not even your gross revenue—is the most important determinant of the sustainability of your company of one. If you make a profit right from the beginning, then you can figure out everything else. If your expenses are low, profit happens sooner. Decisions should be made with a focus on realized profit, not based on the expectation that profit may happen. This is such a key and main difference in how growth-focused businesses and companies of one operate. Even when a company of one needs to grow, that can happen only if metrics are based on actual profit, not on hopeful profit projections.
Every minute you spend as a company of one in the ongoing development of a new product is a minute you aren’t seeing how well it solves a problem, and even worse, you aren’t making money from it or building toward your MVPr. That’s why getting a working version of your product released as quickly as possible is important: your company needs to start generating cash flow and obtaining customer feedback.
In much the same way, companies of one need to continually iterate on their products to keep them useful, fresh, and relevant to the market they serve. So, launch your company quickly, but then immediately start to refine your product and make it better. When you launch a first version of a product, you’re guessing at a lot of things—how it’s positioned in its market, how easy or difficult it will be to reach your target audience and get its attention, and how willing people will be to buy it and at what price. But the good news is that once you launch the first version, data immediately starts to pour in. How are sales going? How are the reviews? How is customer retention? Are they so excited about your product that they are telling others? You can and must use this data to further refine your product to be an even better and more useful solution to the problem you set out to solve.
Because the first launch generally doesn’t yield amazing results, companies of one should try to get it out of the way as soon as they have something to launch. Then the focus can turn to making the product better, based on what was learned. By iterating and relaunching, greater results can be achieved. Companies of one need to continually iterate on their products to keep them useful and relevant to the market they’re intended to serve. So launch quickly, but immediately start to refine and improve your product.
BEGIN TO THINK ABOUT:
A new business or product you could start right now by executing the smallest version of your idea
How to determine your MVPr, the steps that could be taken to achieve it as quickly as possible, and what could be scaled back to reach it faster
A product or service that would be the simplest solution to a problem your customers are having
Whether you could start your company of one without capital and what that would look like
The Hidden Value of Relationships
You can’t buy your way into real relationships any more than you can force people to buy your products. To create an audience of people who are keen to support your business by purchasing from you, a real relationship is required first—one that includes trust, humanity, and empathy.
A company of one finds its true north by working toward being better, not bigger, and the way to do that is to build long-term relationships with its audience and customers. Part of being better is better serving an audience who, if served well, will become customers and, if served well as customers, will become advocates. The difference between relationship companies and companies that focus solely on growth is that the former recognize that real relationships are built more slowly, in more meaningful ways, and without massive turnover. Sales aren’t asked for immediately; they’re brought up after relationships have developed a bit of trust. The idea is that in rewarding an audience who’s giving you their attention by giving your attention back to them, through listening and empathy, you’ll be rewarded with a sale (and most of the time several sales over the long term). Measuring profit or customer retention can lead to more sustainability because, as the adage goes, “What gets measured gets done.” So if you’re focusing on growth, growth is what will happen. But if you focus instead on relationships that turn into long-term customers and sales, that’s what will happen instead.
The premise of social capital as the term is used today is that our social networks indeed have value. The people in those networks do things for each other, such as buying products, sharing articles, and helping each other. Relationships are currency. So companies of one need to think of social capital like a bank account. You can only take out what you put in. If you’re always asking people to buy your products or doing nothing but promoting your business and its products on social media, your balance will hit zero or you may even be quickly overdrawn. People don’t want to buy something from someone who is constantly bothering them on social media with “Buy my stuff!” tweets and posts or newsletters extolling the virtues of their products every week. No matter how often you ask, you won’t make any sales, and no conversion tactics or growth-hacking will help. Instead, you have to make deposits into your social capital account often and build up your balance well before you ask your audience to buy what you’re selling. Do this by being helpful and creating value for as many people in your audience as possible. At the core, your social capital depends on what you can provide for your audience that educates and builds trust, value, and reputation. Social capital is built on mutually beneficial relationships, not one-sided sales-pitch-fests.
Especially if you’re working for yourself, the tendency can be to believe and then act like your company of one is in this struggle all alone and that your business needs to be just you, with no outside interaction or involvement. But in connecting with peers and fostering relationships with them, as well as with other people in our industry and even similar industries, we gain access to new ideas and a way to build valuable connections that can lead to new customers—or to simply vent. We want to retain our autonomy and independence, sure, but we also need to run with a pack from time to time, as there’s strength in numbers.
BEGIN TO THINK ABOUT:
How you could get to know your customers as real people with specific problems
Where the true north of your business lies and what actions you could take to stay aligned with it
How you could build relationship wealth by increasing your value and thus your social capital
The ways in which you could empathize with your current customer base
Starting a Company of One—My Story
When you’re the boss of you, there’s no HR department to handle payroll, benefits, and training. There’s no accounting department to handle payables and receivables or to chase after folks who haven’t paid you yet. There’s no sales and marketing team drumming up new business leads for you. On top of the main skill you use to make money, you’ve got to do all the other jobs as well. Some folks are fine with doing this kind of work, but it may not be how others want to spend their days. The people I know with their own company of one spend approximately half of their time, or less, doing their core skill (writing, designing, programming, etc.). They spend the rest of their time on the business—chasing leads, doing their books, communicating with clients or customers, marketing, and so forth.
Why do you want to work for yourself? What will drive you to keep going when things get rough or take longer than you hoped they would? What will make it worth it when you’re stuck in the day-to-day minutiae of running a business? For myself, I happen to like choices. I like that I can choose to make less money by saying no to a project or a client or a customer I don’t think is a good fit for me. I like that I can choose to unplug for three months at a time and go on camping road trips across American deserts with my wife. I like that I can pick what I work on next, rather than have work handed down to me. I like that I can work on Saturday if I want, and go hiking on Wednesday. This freedom of choice is my north star.
Let’s say I had to start my business tomorrow from scratch, with no existing clients or following. How would I build an audience? How would I attract customers? This is how lots of people start businesses every day: knowing how to do something well (their craft), but without an existing group of people eager to work with them. Where do you begin?
With my skill set, I’d start by listening to people who are looking to hire web designers or have already hired web designers, since that’s the most marketable skill I’ve got. How are these potential clients conducting their search for a designer? Where are they searching? What questions do they have about the process? If they’ve had a bad experience with a web designer, what went wrong? What do they wish they’d known before starting a web design project? Then I’d offer to help with their questions. Is there anything in particular they want to know? Do they want a second set of eyes to look at something? Do they want to brainstorm on what to do next? Do they want a second opinion? Is there anything they want to know about the industry? I would add small bits of helpful advice without offering my own services or charging them. More important, I wouldn’t be pushy about it—I’d just look for folks who have questions I have answers to. This free help I offer wouldn’t be a month of work or a redesign of their whole website, but rather emails and chats, either in person or by phone or Skype. Basically, I would offer a free consult or a project roadmapping session. In this way, I’d learn the key factors involved when people are thinking about hiring a web designer and gain insight into why and how they end up choosing to hire one.
Talking to people this way would do two things. First, it gives me be an opportunity to share my knowledge with the type of people I want to work with (without asking for anything in return). Second, I’d learn what my future audience is looking for, where they’re getting hung up in projects in my field, and how I can communicate with them effectively to help solve those problems. Long before I’d start selling anyone anything, I’d be building relationships with the people I’ve helped in some way. I wouldn’t build this following so I could “promote” or sell to them later. I’d build and foster relationships with these people so I could continue learning from them. And these would be mutually beneficial relationships: they’d receive my help and I’d receive their knowledge.
Most important, I’d do this fact-finding/mini-consulting while I was working somewhere else, probably at a full-time job. I wouldn’t dive headfirst into building my own company from the ground up, because I wouldn’t know yet if it was an idea that I could execute well enough to make into a sustainable living.
From there the path could go several ways. Through a blog, I could write publicly about what I learned and eventually compile my posts into a book—full of insight into common client issues and how they can be resolved (as I did in writing a previous book). Or I could use my newly acquired knowledge to create my own services, since I’d know where my potential audience needed the most help. I’d probably do both things, with confidence that the people I’d been helping would promote what I came up with, and with no need on my part to constantly promote/sell at them. And this is the key—the people I’d helped would help me precisely because I had helped them (although I would never expect it of them).
Legal
Small businesses can be taken advantage of, ripped off, or screwed out of money they’re owed—sometimes by larger businesses, but sometimes by businesses the same size. This is why having legal systems in place right from the start is important.
You need to ensure, first, that your business entity is set up properly for the country and region you’re operating from, and second, that your business is removed by one layer from you personally. In other words, your business should be its own legal entity—a corporation in most countries or an LLC in the United States. That way, should anything go wrong in your business, it is your business that is liable, not you personally. All money should go into your business directly, not straight to you, and then you should be paid out, by salary or dividends. There are so many different ways to structure a business—based on your needs, what you provide to clients or customers, and where you’re located—that you probably need a lawyer (and an accountant sometimes) to help you set up the right business for you.
Next, after you’ve separated your company of one from yourself personally, you need to prevent your company from being taken advantage of. With service-based businesses, this means having contracts between your business and your clients. In the beginning, you can source contracts fairly cheaply online. Eventually, it makes sense to enlist the help of a lawyer who’s familiar with both your area of practice and how laws work in your geographic location and who, of course, can make sure that your contract is sound. For a product-based business, this means having users agree to your terms of service before they pay you for what you’re selling.
Accounting
To find the best accountant for your company of one, look for a firm or individual who has knowledge of your type of work and familiarity with businesses of your size. My own business needs a firm that understands how online business works, and how to deal with revenue that comes from selling digital products primarily in the United States (in U.S. dollars) while my business is in Canada (operating in Canadian dollars). An accountant is not just a person you talk to at the end of your business year when you file your taxes. You can use an accountant as an adviser on all things related to government requests, on how to stay up to date with financial laws (so you don’t inadvertently break them), on sound ways to pay yourself and pay your expenses, and on how best to structure your business to pay the least amount in taxes.
Salary
As I mentioned in the legal section, you need to make sure your business is separated from yourself, and to this end, the first thing you need to do is open a separate bank account for your business and then, from that account, pay yourself either a dividend or a salary. Since revenue from my work can sometimes be inconsistent, I’ve always figured my base salary as the average I’ve made in profit (not revenue) for the last twelve months, minus 25 to 30 percent (to set aside for taxes). Before raising my salary if my profits increase, I also take into consideration the minimum amount I need each month to live on and be comfortable. With my twelve-month average profit in mind, and not going too far past my minimum living expenses, I can set myself a fairly steady salary. Obviously, you can change this up if you find you need less money—or more—but keep in mind that the more money you take out of your business, the more it’s taxed.
Savings
Alongside a salary and a runway buffer, I truly think companies of one should invest as much money as they can save up in passive investments like index funds. If inflation is approximately 3 percent per year, then you’re losing money on any assets you’ve got that aren’t making at least 3 percent per year in returns. This applies, by the way, to all the money in your bank account, since checking and savings accounts pay barely any interest.
The goal here is to work your money in small steps. First, ensure that your company of one is making enough profit to cover your living expenses. Second, make sure you’ve got enough of a runway buffer built up to work full-time at your company of one, even if things get slow. Third, with your salary and runway buffer covered, you can reinvest money in your company; if things are going well, you should be able to get a better than 3 percent return on such an investment. Alternatively, if you don’t need to invest more in your company—maybe your business costs are covered and you have no reason to grow them—you can invest any extra money in something like index funds.
Health Coverage
As a company of one, you’ll definitely find it worth your while to do some outreach to see where you can obtain health and life insurance. Regardless of where you’re located, there are usually groups you can join to take advantage of bulk savings, such as professional associations, chambers of commerce, and business groups.
Lifestyle
The benefit of a company of one is that you can build your lifestyle around it, optimizing for both profit and your own happiness. The first step is to develop a consistent, healthy monthly revenue to cover costs, your runway buffer, and investments. Once you take care of those considerations, a beautiful thing happens: you’re presented with choices. You can choose to make more money, if that’s what you want, or you can choose to work the same and make the same amount. If you make the latter choice, you can then start to prioritize. Do you want to spend more time with your family? Do you want to explore the world? Do you want to spend more time experimenting with new business ideas and opportunities? By removing the hurdle of having to consider scaling up in all areas at all times when things are going well, you can open yourself up to investing in enjoying your own life. You will have the freedom to enjoy the benefits of having figured out how to make “enough.”
BEGIN TO THINK ABOUT:
Your purpose or reasoning in starting your own company of one, and whether it will hold up over time
How you could start your own company of one right now, with some first version of what you want to do
What you need to do to set up your company of one correctly and responsibly, both legally and financially
Afterword: Never Grow Up
Growth, as we’ve seen from the studies and stories presented in this book, is not an unalterable law of business. Instead, growth doesn’t have to inevitably follow success or profit, especially for a company of one. When you become too small to fail, you also become small enough to make your own choices about your work. Real freedom is gained when you define upper bounds to your goals and figure out what your own personal sense of enough is. You’ll have the freedom to say no to doing the expected, or to opportunities that don’t serve you. There’s a satisfaction in reaching the point of enough in your business, and then knowing that you don’t have to explore every new potential opportunity that comes up. This freedom allows you to run your company of one in your own way—a way that gives you a life you enjoy, fills your days with tasks you actually want to do, and brings you customers you actually want to serve.