I recently left the corporate world. After working roughly 20 years in mega-large companies with revenues in the billions I am now a company of one. It’s me and only me.
I do all my own stunts, too. Whether it’s booking travel or sending invoices or writing reports, there is no one to lean on, no one to manage. If I’m being truthful, I’m really enjoying life in my company of one.
Which brings me to Paul Jarvis, author of the fantastic book, Company of One.
The premise is simple. Keeping your business small—versus growing it at all costs—brings you a level of sanity and independence. Growth is not the objective; building something slowly and methodically that is “remarkable and resilient” over the long-term is the name of the game.
In summary, staying small is the next big thing for business.
Knowing that Paul lived almost next to me—in the most beautiful part of the world, Vancouver Island, British Columbia—I had to meet him to discuss the book, and life in general. Thanks to our mutual friend—author and incredible human being, Mitch Joel—we met for a latte and got right down to it.
After a riveting conversation that could have lasted all day, I asked if he might follow that up by answering a few questions for this column on Forbes. “Of course, Dan,” said Paul. “I’d be delighted to.”
What are the key reasons capitalism is failing? Does it come down to a fixation on growth?
It’s wholly unsustainable. Resources are finite, so focusing on rapid growth without end seems unwise.
Capitalism isn’t an immutable law, but simply something we collectively believe in. We collectively go to work, make money, and assume the more money generated, the better off we are—in both our businesses and our lives.
This a narrative we can opt out of.
Our belief in a capitalist market creates two classes: the small minority of people who own massive businesses that are ever-growing, and the larger group of people who trade their work for money from the prior group. This difference in classes is essential to the operation of capitalism, because there has to be workers, and those workers have to be governed by someone whose fiduciary duty is not to the workers but to growth in all directions for their own self-serving means and shareholders.
The workers (us!) become convinced that consumerism is the only path forward. But they’re convinced of this by that same small minority of people who directly benefit from their consumerism. It has to happen to keep the wheels spinning, the factories humming, the profits increasing. Under this hype of buy more stuff, is empty promises, when sometimes all we need is what we’ve already got. With more stuff comes more responsibilities, and more problems. In all honestly, most of the time we’d be better off and happier with less. Which on the other end would mean less work, less profits for the small ruling group of people and more free time (because we don’t need to make as much to cover our essentials).
The system has built an economy that seems to have reached a logical conclusion: consumers have grown tired of companies increasing their reach with average goods in huge quantities. Employees have grown tired of working for companies that are more focused on pleasing shareholders with quarterly earnings than creating stable jobs for their workers. En masse people are turning to working for themselves and the freelancer economy and employee-less businesses are booming and eating more and more of the jobs available. According to a study by Intuit, 40% of the workforce in the US (60 million people) will be freelancing by 2020.
Capitalism requires bigger everything (numbers of employees, amount of gross revenue, etc.) and means you can conquer and dominate more of your competition. If you grow larger, you can acquire them or destroy them. None of this, however, benefits the end customer. None of this helps build long-term success.
What if we considered an alternative? What if growth wasn’t our North Star in business? I contend that we can create a company and run it in our own way, focused on what we want to focus on.
Your belief is that every company should be a “lifestyle” business. Why, and how is it important to the Company of One mission?
Every business, at any size, is a lifestyle business—each comes with its own choice in how you want to live. If you work at a corporate job, you’re responsible to have your butt in a chair in your cubicle from 9-5 (probably more). If you work at a high growth or VC-backed start-up, you’re responsible to work 16+ hours a day, at least, and have no life outside of work. All business is simply a choice in the life we want outside of it.
For myself, and for companies of one, it’s important to consider that we may want a business that supports our lives, not a life that exists solely to support our businesses. A study done by Freelancing in America found that 84% of people cared more about lifestyle than earnings, yet, time and time again we forsake our lifestyle for earnings and we become unhappy.
Relationship building is vitally important to someone building a Company of One. What can they do to improve this important requirement?
Just because you might work for yourself doesn’t mean you have to work by yourself.
Just as connections to an audience or paying customers are important, so too are relationships with your peers.
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 out- side 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.
Other people make us better.
In life, in business, in everything. This doesn’t mean we should hire lots of them as full-time employees to fuel the “grow until we’re profitable” mentality. But it does mean that we have to actually work at not being completely “solo” because it’ll only hurt our business if we have the hubris to believe that we can do everything ourselves just because we work for ourselves.
Why is it important for a Company of One to continuously engage the customer directly?
Customers are the people who are already paying attention to us. It’s also much cheaper, much easier and requires much less time to retain a customer than gain a new one.
Ruby Newell-Legner, a twenty-five-year student of customer happiness, found that only 4 percent of customers actually voice their dissatisfaction to a business: a whopping 91 percent of dissatisfied customers simply don’t ever return. And with online reviews and social media, bad customer service tends to be talked about much more than praise for good customer service —the internet loves to turn into a mob against companies that don’t help or that wrong their customers.
With these stats in mind, it’s puzzling that some growth-centric companies care more about new customer acquisition than retention or customer happiness.
The obsession of some companies with growth and acquisition —with chasing a supposedly ever-growing number of users —becomes something of a vanity metric to tout on their home- page or in investor slide decks. But the cost of rapid user acquisition is incredibly high —so much so that it usually results in less overall profit. 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.
A company of one has one massive asset when it comes to customer service: it can be delivered in a way that doesn’t scale. A local restaurant owner can remember my name and dinner order because she works the front of the house and has one location, with regular staff. Just like Charlie Bickford, who’s the CEO of Excalibur Screwbolts but still regularly answers the phone at his small office. Or Basecamp’s founders, who answer technical support requests.
Relationships, when the company is smaller, can be built with regular and loyal customers, and those personal relationships can keep them loyal and happy.
As companies of one, we are very much in the people-serving business. It’s critical that we listen to each of our customers and take full ownership in making sure they are pleased with our service level and then successful in their own lives. Customer service is a huge differentiating factor in why people choose the places where they want to spend their money. If you serve your customers well, they in turn become brand evangelists for your company: basically an unpaid sales force that reduces your need to hire more staff.
You discuss the importance of purpose as well as being focused, in the moment. Why are these traits important to aspiring Company of One entrepreneurs?
We are only entitled to the labor, not the fruits of our labor.