Company of One

In truth, embracing growth appears to be the easier route more often than not, since it’s easier to throw “more” at any problem that might pop up. Want more customers? Hire more employees. Need more revenue? Spend more. Fielding more support requests? Build a bigger support team. But scaling up might not be the best or smartest solution to the basic problem. As a means to generating higher profits, what if you acquired more customers simply by creating more efficiency, so you didn’t have to hire more people? What if you generated more revenue by finding a way to spend less (again, for higher profits)? What if you responded to the growth in support requests by finding a better way to teach your customers how to use what you sell, so they didn’t have to ask questions as often? What if you didn’t have to work more hours to finish a project but just more efficiently, so you could then enjoy more of your life away from work?

But under this hype, this fetishization of wanting more, are empty promises of happiness and fulfillment that never seem to come to fruition. Sometimes “enough” or even less is all we need, since “more” too often equates to more stress, more problems, and more responsibilities in both life and business.

I’ve personally seen the most success in my life when I’ve figured out solutions to problems without having to do what traditional businesses do to solve problems—hire more people, throw more money at the problem, or build complex infrastructures to support the extra employees. Basically, I’m not interested in addressing problems by throwing “more” at them. Solving with “more” means more complexity, more costs, more responsibilities, and typically more expenses. More is generally the easiest answer, but not the smartest. I’ve found both delight and financial benefits in working out solutions to problems without growing. Instead, I and many others enjoy handling problems with the resources currently available. Although it can require a little more ingenuity, solving problems this way can set a business up for long-term stability, since less is needed to keep it afloat.

Many large corporations have companies of one hiding within them. If the skills and passion for innovation and autonomy of these employees are fostered, it can greatly benefit the entire business as a whole. But if they are stifled in their creativeness and freethinking, they tend to move on quickly to other employment or entrepreneurialism. They’re rarely motivated solely by money or salaries and lean more toward reinventing their job and role in a way that works best for them.

However, what’s difficult to automate is exactly what makes a company of one great: the ability to creatively solve problems in new and unique ways without throwing “more” at the problem. Whereas workers in “doing” roles can be replaced by robots or even by other workers, the role of creatively solving difficult problems is more dependent on an irreplaceable individual. Regardless of the rise of the so-called robot overlords, this is where the strength of a company of one lies.

When I was doing web design full-time, each time an economic bubble burst or a recession hit I found myself in a great place to find more jobs because I could offer the quality of work a larger agency could provide, but at a price that had one less zero in it. And not only was I still making more profit than if I had been salaried at an agency, but I could still make the most of the price I was charging because my overhead was almost nothing past having a computer and writing off the second bedroom in a rented condo.

Kaitlin thinks that a sense of autonomy looks different on everyone. She herself has created a work life that rewards her for getting her work done quickly. In a typical company, regardless of how quickly you work, you’re still required to be there for a set number of hours a day; in other words, there’s no reward for productivity or efficiency. Kaitlin has also found that she’s able to get work done with more focus from 9:00 AM to 1:00 PM, so she doesn’t schedule meetings or calls during that window of time.

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.

In an ancient language from India called Pali, there’s a term, “mudita,” which seems like the opposite of envy, because it means “to delight in the good fortunes or the accomplishments of others.” (Interestingly, it has no counterpart in English.) Outside of altruism, mudita is useful in business: we can be pleased that people like Musk or Oprah exist and thrive, while at the same time not letting their prolifically growing empires affect what we do or how we see our own businesses. We can be open to the insight that others have their own business successes but are not the sole factor in steering our own.

In a study done in 2006, 65 percent of senior corporate executives viewed introversion as a barrier to leadership. We must reexamine this stereotype, however, as it doesn’t always hold true. Regent University found that a desire to be of service to others and to empower them to grow is a key factor in becoming a leader and retaining leadership. So-called servant leadership, dating back to ancient philosophy and the Tao Te Ching, adheres to the belief that a company’s goals are best achieved by helping workers or customers achieve their goals. Such leaders do not seek attention but rather want to shine a light on others’ wins and achievements. Servant leadership requires humility, but that humility ultimately pays off. Companies of one recognize that elevating others elevates the entire team or business.

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. My introverted nature is the primary reason I teach online courses instead of doing speaking gigs. Online courses allow me to use a channel through which I can communicate effectively, and in a way that my audience connects with.

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.

According to Carter Phipps, author of Evolutionaries, generalists will continue to thrive in business as it becomes increasingly valuable to know “a little bit about a lot.” Where you fall on the spectrum of generalist to specialist could therefore be the most important aspect of your survival as a company of one. Vikram Mansharamani, a lecturer at Yale, said that acknowledging specific expertise is overvalued. There are certainly domains, like hard science, that require specific knowledge, but for the most part specialist knowledge, if it is blind to everything else, just can’t work in the business world today (or in companies of one) because there is too much uncertainty and ambiguity and metrics are so poorly defined. The time is at hand to embrace generalist thinking and the understanding of many things.

Miles Kington, a British journalist, reportedly said that “knowledge is knowing that a tomato is a fruit. Wisdom is not putting it in a fruit salad.” We should never assume that having an abundance of knowledge is the same as having an abundance of wisdom. Even if you have access to a plethora of data or experience, there are still so many factors beyond your control.

Focus A company-of-one leader has to become an expert at deftly saying no. You can learn to view saying no as an actual actionable strategy, as opportunities, tasks, distractions, plans, meetings, and so on all come up frequently. By saying no to anything that won’t serve your business or your team, you can open up space to focus on a better opportunity in your business.

Hansson despises this paradigm of working more as the only way to be successful. He believes that the pressure to work more doesn’t just get passed down from leadership; rather, it’s amplified as it moves outward through a company. He believes that companies need to stop hustling and should encourage their employees to focus on accepting that there’s life outside of work, that there’s real usefulness to sleep and recuperation, and that their work habits should be much calmer.

In many quickly growing companies, however, leaders feel that they are required to detach from human relationships and focus on using people as resources to achieve necessary growth by any means necessary. The problem is that a leader who stops feeling what is either motivating or demotivating within their team stops being able to lead.

For example, by adding a pop-up message offering access to a free report on every page on your website, you might increase the number of subscribers to your company’s mailing list, but you might also end up with a list that has few email opens and more unsubscribes, making your net-net growth very low or even negative. A company of one would have a mind-set more in line with providing a great newsletter with lots of valuable content of interest to the people it wants to attract; its overall subscription rate might be lower, but the open-rate and retention would be higher.

Kate realized that user growth would cost more than user retention. By decreasing the number of subscription cancellations, Magazines.com would see better profits and gains than it would by trying to increase the number of subscribers. Since its whole business model was based on renewals, the company had to totally shift its thinking—from constantly searching for new customers to making sure existing customers were so pleased with the service that they’d renew for another year. Kate showed the company that the number of renewing customers was a far more important metric for success (and far cheaper) than the number of new customers acquired. Magazines.com also changed its home-page messaging in order to speak to existing customers, added more renewal offers, and improved customer support for paid users. Over and over again, Kate has seen that sacrificing customer experience for customer acquisition doesn’t work long-term and is not a sound strategy with which to start a company.

So 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).

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. This is growth that stems from doing things correctly, not from making growth your top priority and just hoping you do everything right.

Having business minimalism as its functional ideal has led Patagonia to create an ironclad guarantee for its products, which is in essence a lifetime refund/replacement policy. This ideal also led Chouinard to start the charity 1% for the Planet, instead of attempting to maximize and grow sales at all costs. Patagonia even has ad campaigns telling people, “Don’t buy this jacket,” and encouraging them to repair or recycle the clothes they already have.

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 is how our friends at Buffer (introduced in Chapter 2) approach career advancement—with an interesting hybrid of a pyramidal bureaucratic hierarchy and a holocracy (a completely flat organization where no one manages anyone else).

—she’s in charge of people decisions in engineering. In this model, Katie makes decisions in engineering as they relate to people, as she has a scope of influence and ownership over that entire team. But in this style of organization, an engineering team member can make specific decisions as they relate to their own scope of influence and control—for example, the team member who knows the most about Android. In this way of doing things, different people are in charge of different areas. So it’s possible to have a scenario where two employees are working together and one is in charge of one type of programming and the other is subordinate, but in an HR scenario their roles are reversed. Basically, the most qualified and best-suited person makes the decisions for each specific project.

Buffer’s goal in organizing the company this way is to illustrate that there’s no ceiling for rising: employees who don’t want to outgrow their jobs don’t have to. An employee who loves programming for Android can simply acquire more and more Android-related ownership and decision-making abilities. Other employees may choose to grow to manage Android projects, or to become people managers. Buffer employees never have to choose between stagnation and leading people—they can choose to go deeper into their area of expertise or go wider by building a name for themselves outside the company in their area of expertise (which is then rewarded).

If your business is fully aligned with your purpose, you’ll be more motivated to keep at it, even during the tough moments; your workforce will turn over less, since employees won’t have to leave their values at home when they head to work; and your customers will become and remain loyal. Your purpose will also serve as a litmus test for all your business decisions, enabling you to make smart, prompt, and more confident choices in all areas of your work.

A study done by Michael Porter, a Harvard Business School professor, and Mark Kramer, the cofounder of the social-impact firm FSG, found that taking a “shared value” approach to purpose generates positive economic impacts for companies. They can align their business with their values and with what matters to their customers by reconsidering how they produce and sell products and redefining what productivity means for employees (valuing their rest and happiness and discouraging overworking).

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.

I 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. If I hadn’t done that, I wouldn’t have even started working for myself.

When I started selling online courses, the same elements were present. I used the skills I had built for years as a designer to make courses on related subjects. And before I moved entirely into products, I spent a few years transitioning, waiting until I was sure that selling these online products would make me enough money before completely diving in.

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. Research done by Hewlett-Packard found that the IQs of employees who were interrupted by email, calls, or messaging were reduced by more than ten points—which is twice the impact of smoking marijuana.

Researcher John Pencavel from Stanford University says that if you start to define your productivity in physical terms, you can see that your ability to focus drastically diminishes after fifty-five hours a week. So adding anything more to your schedule that takes longer will not be productive. The social badge of honor for always being busy and always working has no rewards past bragging rights. It also has no place in the company-of-one mind-set. What you should be bragging about is figuring out how to get your work done quicker and more productively.

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.

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.

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

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. A great example is a now-infamous story from the tech world about a customer service call to RackSpace, an enterprise-level cloud hosting provider. The call center rep heard someone in the background of a support call mention that he was hungry and wonder about ordering something. She quietly put the customer on hold, ordered a pizza to be delivered to the address she had on file, and went back to assisting the customer with his problem. Twenty minutes later, still on the phone with the customer, she heard a knock in the background and told him to go answer the door, saying, “It’s your pizza.” The pleasant unexpected experience led to not only a very happy (and full) customer but also a story that would be shared thousands of times online. This is the kind of customer service that builds reciprocity: your customer gets something unexpected and then feels the need to help your business, not only by remaining loyal but also by telling others.

Some companies don’t allow employees to apologize in any way because they fear the legal consequences of admitting fault. Unfortunately, this approach can make customers angry, especially if all they want is to hear someone owning a mistake. This book is definitely not offering legal advice, but it’s worth noting here the 2015 New York Times report that doctors who are transparent about errors and offer apologies to patients are actually sued far less for malpractice than doctors who deny wrongdoing and defend mistakes. Two years after the University of Illinois adopted this practice of transparency, with full apologies, its malpractice filings dropped by half. A separate study by Nottingham University found that in most cases apologizing costs nothing—companies that simply apologize for mistakes and work to fix them fare better even than companies that offer financial compensation.

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. With an average return on investment of 3,800 percent, according to the Data & Marketing Association, email marketing is a valid model for scaling without scale.

He learned from Seth Godin that selling to people who truly want to hear from you, because you’ve been sharing with them, is far more effective than interrupting strangers online who don’t even know you. Each year this idea was proven correct, as every product CopyBlogger launched was more and more successful. Each product was based on direct intel from interacting with and listening to the audience consuming the content that Brian was sharing. This “education through content” built the necessary trust to turn into sales.

Conventional (but uninformed) wisdom has been that if you teach customers everything you know or share inside tricks of the trade, your customers will use that knowledge to not buy from you—or even worse, they’ll buy from the competition instead, armed with the knowledge they gained from you. But these fears are just myths. In fact, the opposite tends to happen, according to a study done by Andreas Eisingerich and Simon Bell at the MIT Sloan School of Business. Eisingerich and Bell surveyed 1,200 clients of an investment firm and found that 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.

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

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.

Keeping your launch simple lets you avoid roadblocks in getting your product to market and then sharing it with the market. If it’s not simple, you’ll have to spend too much time first creating your product, and then explaining what it is and what it does. Simple lets you hit MVPr sooner and really start learning how your product is faring in the market.

Jim Collins, best-selling author of Good to Great, studied 1,435 companies over a forty-year span. He found that every great company that’s very profitable and successful started out as simply good enough to launch. These companies focused on one thing and let go of the rest. He likens it to foxes and hedgehogs. Foxes are very smart and wily and have many tricks for catching prey. In contrast, a hedgehog has only a single trick—curling up into a spike-laden ball. Regardless of how many tricks a fox deploys to catch a hedgehog, the hedgehog’s singular trick beats all of them, because a fox can’t eat a hedgehog. Many companies try to be foxes, doing everything for everyone or launching products full of bells and whistles, but successful companies that thrive over the long term work at a single task and master it. You still need a varied skill set to build a company of one, but your focus on serving customers needs to be singular.

In Japanese, shinise is the word for a long-lasting company. Interestingly, about 90 percent of all businesses worldwide that are more than 100 years old are Japanese. They all have fewer than 300 employees, and the ones that still exist never grow quickly or without great reason.

Onsen Keiunkan has survived, not in spite of being small, but because of it. They didn’t expand into a hotel chain, or turn their interests to real estate investing, or follow the whims of market booms. They haven’t taken on investors or gone public. To put this all into perspective, Richard Foster, a lecturer at the Yale School of Management, found that the average life span of a business on the S&P 500 is only fifteen years total. Onsen Keiunkan, on the other hand, has been in business and operating for 1,300 years.