Company Of One: Why Staying Small Is the Next Big Thing for Business

by Paul Jarvis

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.

Your measuring stick for success doesn’t have to be growth as a one-dimensional metric; it can be something more personal and focused on your specific company of one—like the quality of what you sell, employee happiness, customer happiness and retention, or even some greater purpose.

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?

You can’t start a business with every idea you’ve got for it listed in the “need to have” column. You’ll never get anywhere. Plus, a lot of your assumptions about what you need might change once people start buying and using what you’ve made. A true “need to have” is whatever will make your idea fall apart if you don’t have it. For example, if your idea is a health care SEO consultancy, your business first needs to thoroughly understand SEO and its implications for hospital websites; otherwise, your idea is of no use to hospitals.

Questioning growth—or at least, not scaling—isn’t the same as staying static and unchanging. Even a business that doesn’t want to grow much needs to constantly learn, adapt, and refine. The cost of living, labor, equipment, materials, travel—all increase year over year. Companies of one aren’t anti-scale; rather, they’re aware that they need to determine which areas of their business need to scale and when it makes the most sense to do so.

There’s a real difference between growth as a goal and growth as a direct result of profit from sales of a valuable product. Letting growth as a goal guide your company’s decisions can be shortsighted or result in high churn. Whereas if your decisions are guided by growth resulting from profit, you stay focused on how you can continue to make things better for your customers—with better products, better experiences, better support, and increased success for them.

The same is true for private companies with investors—they want to make a return to show those investors that investing in the company was a smart idea.

He’s faced pressure to grow much faster and has even been offered VC investment, but he continues to turn it down. To him, such investments, far from helping to improve his software, would just make him beholden to growing for the sake of investor ROI.

By focusing on customer success and happiness, Peldi avoids the dangers of “thinking big” or pushing aside profit in the hope that one day margins will be huge.

For Peldi and his team at Balsamiq, focusing on better, not bigger, removes any pressure to take shortcuts in software development. He gets to spend his time talking to customers instead of in board meetings or at investor pitches.

But then how do you advance in your career within a company that doesn’t grow, or that grows extremely slowly? Career growth in this case happens by increasing your scope of influence and the level of your ownership; success in these two areas allows you to stay focused on your skill set.

This approach may run counter to how a lot of clothing companies operate, but Patagonia’s purpose is to produce less clothing, to make it last longer, and to offset its price socially and environmentally. Because this purpose resonates with Patagonia’s audience, they’re able to charge a higher price for their responsible clothing.

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.

Defining your purpose has more to do with your personal values and ethics than with business plans or marketing strategies. You can’t fake your purpose. Your gut and your customers simply won’t let you. And really, why would you want to? You’ll get so much more enjoyment and satisfaction from running your business in alignment with your purpose. If you don’t feel a deep connection to your purpose, no one else will feel it either.

“Follow your passion” is irresponsible business advice. Barbara Corcoran, a real estate investor and a “shark” on the popular television show Shark Tank, said that she didn’t follow her passion; instead, she discovered it by accident as she worked her ass off.

Corcoran says that it’s more important to focus on solving problems than on passion. Her problem-solving focus allows her to better evaluate new business ventures that are presented to her on the show. 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.

Engaging work comprises four key components: clearly defined assignments, tasks you excel at, performance feedback, and work autonomy.

The first is that they were skilled at what they did before they took a leap—so skilled that they were doing well enough that if their leap to something new faltered, they’d still be okay.

The second missing ingredient in their account of successfully “following their passion” is that they were able to test their leap with a smaller jump before they climbed to the top of the highest platform.

started my own business doing web design only after I became an in-demand designer at an agency. I built up the skills as an employee until the clients of that agency wanted to leave with me when I quit.

I wasn’t passionate about web design, or even passionate about starting my own business. I found the courage to do it only because I had a small list of companies that wanted to pay me from day one.

They happened slowly after I honed my related skills to the point where they were in demand. The passion for those jobs followed, but only once I had spent a lot of time doing them and getting better at them.

Passion isn’t the catalyst that creates success, but more often what develops after success is achieved.

The gist is this: you can pursue any passion you want, but you shouldn’t feel entitled to make money off it. Passion in work comes from first crafting a valuable skill set and mastering your work.

A Microsoft Research study found that attempting to focus on more than one priority at a time reduces productivity by as much as 40 percent, which is the cognitive equivalent of pulling an all-nighter.

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.

it takes an average of twenty-three minutes and fifteen seconds to fully get back to the task. Fewer distractions means speedier work.

Glei suggests doing a productivity audit once or twice a year: for a week or two, record what tasks you’re working on, for how long, and where the big distractions lie. With this record, you can reapportion your time more appropriately or even create a “stop doing” list—such

Basecamp also doesn’t allow calendar sharing between employees at any level. Shared calendars can easily be abused by those who assume that others have time if there’s nothing on their calendar. In fact, blank time has probably been left on their calendar so they can focus on their work.

For example, I don’t communicate with others—no meetings, calls, interviews, or social media—on Mondays and Fridays so I can write (words or code); I do most of my calls on Thursdays. In this way, I don’t feel bad if all I do on a Thursday is meetings and interviews, because that’s my singular focus for that day.

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.

personality is required for your company of one, regardless of size. Your human characteristics are the way your brand speaks and behaves.

we try to appeal to everyone, we won’t appeal to anyone in particular, muddying our message. Creating indifference or simply being another boring small company in a crowded marketplace just won’t serve you well as a company of one.

People can copy skills, expertise, and knowledge, which are all replicable with enough time and effort. What’s not replicable is who you truly are—your style, your personality, your sense of activism, and your unique way of finding creative solutions to complicated problems. So lean on that in your work. Sell your way of thinking as much as you would a commodity. Polarization can shorten a sales cycle because it forces customers into a quicker binary choice, to decided yes or no. After all, it’s hard to make money from maybes.

There’s overwhelming evidence that treating customers well, as if they’re your one and only customer, drives value to your bottom line.

You don’t get referrals by just meeting the standard expectations of customer service—people rarely find it worth mentioning to others that a company did just enough to help them but nothing more. You have to do much more than that to evangelize customers if you want them to talk about your company favorably.

Customers don’t expect perfect—they just expect problems to be dealt with fairly, empathetically, and quickly.

Real-time collaboration can be very useful when a whole team is required to brainstorm or solve a problem together, but it can also be completely distracting if it’s expected most of the time.

Scaled collaboration does make sense when a project can’t be advanced without input from several team members. A perfect example is what is known as a “hackathon”—a combination of the words “hack” (exploratory programming, not computer crimes) and “marathon.” In a hackathon, several small teams of developers, designers, and project managers are formed, each group collaborating, with speed and focus, to complete a large project over the course of several hours or a few days.

Hackathons work because they are focused collaboration, not 24/7 “be available at all times” collaboration. They can be fun, energetic, and highly productive, since everyone is collaborating on a common goal and purpose.

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.

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. If you’re teaching an audience about legal issues on the internet each week in a newsletter, they’ll begin to trust your insights, and then, as happened with Brian, you’ll probably be the first person they think of when they need to hire someone to help them with legal issues. The second benefit of out-teaching your competition is the chance to show an audience the benefits of what you’re selling.

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.

At the core of many massive, profitable, global companies is an old idea executed exceptionally well. Facebook is just a better MySpace, and both are essentially digital meeting places. Taxis take people from point A to point B. Uber/Lyft just figured out how to make this service more convenient. None of these are billion-dollar ideas; rather, they’re billion-dollar executions of ideas. That’s why companies of one shouldn’t worry about sharing their ideas, as long as they’re taking care of execution and their ideas are not proprietary.

the more those clients were educated on the pros and cons of the financial products the investment firm offered, the more they trusted that firm, the more loyalty to the firm they developed, and the more appreciative they became of the firm’s customer service for taking the time to educate them. The truth is that lots of companies use marketing ploys or disingenuous advertising to trick consumers into making a quick and sometimes impulsive decision. But these days, more and more consumers are demanding honest and straight information about products, so they can make their buying decisions at their own speed.

People can be guarded if they think they’re being sold to. But more often than not, customers will engage and open up if they feel like they’re learning something useful. The more you teach, the more your audience will see you as an expert. Then, when it comes time to buy something, they’ll find that they want to pay for more of that expertise.

92 percent of consumers trust recommendations from family or friends over any other form of advertising.

word-of-mouth conversation drives sales five times more than paid online media and is responsible for $6 trillion in annual customer spending.

Some businesses expect word of mouth to just happen organically, without any effort on their part. Another reason is the difficulty of measuring recommendations, which can happen via any medium from a coffee shop conversation to a private (untrackable) message on social media. Another reason businesses don’t rely on referrals is that they’re hard to quickly scale. That may be bad for a large business focused on exponential growth, but it’s fine for a company of one.

Rewarding loyalty in your best customers is also a great way to incentivize recommendations.