Author: Paul Jarvis
Company of One is not your regular business book. Instead of growing a business for growth’s sake, the book suggests the idea that staying small can make a business more durable and more enjoyable for the business owner.
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My Reading Notes
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.
If you’re utilizing systems, automations, and processes to build a long-term business, you’re not trading time for money, but instead operating and profiting outside of the time you spend working and beyond your one-to-one relationships.
The “company of one” model can be laid out in a similar fashion: “start small, define growth, and keep learning.”
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.
If you’re a company of one, your mind-set is to build your business around your life, not the other way around.
A company of one questions growth first, and then resists it if there’s a better, smarter way forward.
The four typical traits of all companies of one: resilience, autonomy, speed, and simplicity.
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.
The first trait that resilient people have is an acceptance of reality. The second characteristic of resilient people is a sense of purpose—being motivated by a sense of meaning rather than 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.
To achieve autonomy as a company of one, you have to be a master at your core skill set. Competence and autonomy are tied together because the opposite—having complete control but not a clue what you’re doing—is a recipe for disaster.
Achieving control over a company of one requires more than just using the core skill you are hired for. It also requires proficiency in 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.
Companies of one question their systems, processes, and structure to become more efficient and to achieve more with the same number of employees and fewer hours of work.
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.
For a company of one at any size, simple rules, simple processes, and simple solutions typically win. Complexity is often well-intentioned, especially at large corporations, where, as complicated processes are added to other complicated processes and systems, accomplishing any task requires more and more work on the job and not toward finishing the task.
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.
If you have an idea for starting a business that requires a lot of money, time, or resources, you’re most likely thinking too big. Your idea can be scaled down to the basics—do it now, do it on the cheap, and do it quickly—and then iterated upon. Start without automation or infrastructure or overhead. Start by helping one customer. Then another. This puts your focus on helping people immediately with what you’ve got available to you right now. Work on things like sales funnels and automation when it no longer makes sense to personalize your interactions with your customers in surprising and delightful ways.
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.
If a business turns a good profit at its current size, then growth can be a choice, made when it makes sense to succeed, and not a requirement for success. 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?”
As long as you’re doing great work that’s in demand, working for yourself has no limits—or, as we’ll see next, only smart upper limits that you put in place yourself.
Socrates said that envy is the ulcer of the soul, meaning that we can easily become negatively affected by the success of others. Who we are and what we actually want become overshadowed when we internally compare ourselves to others.
Envy is also based on a false comparison, like comparing uncooked ingredients to a delicious baked pie. Envying others, we see only the end result or the final product—the delicious dessert. But in ourselves, we see all the not-so-tasty starting ingredients and are aware of all the real work required to combine them into a successful end product. We too often compare our sometimes messy selves to only the best and shiniest part of others and come up short. Remember, every business has not only its successes but also its failures.
There is one way that envy can be useful: as a tool to recognize in ourselves what we truly value.
Charisma—the so-called X-factor that leaders are supposed to be born with in order to make compelling pitches, inspire urgency, and encourage cooperation—isn’t an innate quality that you either have or don’t have. In fact, charisma can be taught or brought out when required, even in quiet individuals.
By using stories and metaphors, high expectations, and even facial expressions, anyone can employ and gain charisma to inspire others.
A leader’s job is to provide clear direction and then get out of the way. Even companies of one require direction and set processes—it’s this common constraint that allows creativity to thrive and goals to be met. This alignment has to be carefully orchestrated, not as binary autonomous/non-autonomous decisions, but as a balance between guidance and trust.
Provide too much guidance and a team will start to rely on it and leadership will become a bottleneck for decision-making. Provide too little and things devolve into anarchy. The middle ground is where high-performing teams excel, providing the most benefit to a company and delivering the most innovative and amazing results.
Even a company without employees still requires constraints.
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.
Generalists will continue to thrive in business as it becomes increasingly valuable to know “a little bit about a lot.”
The more we can learn about how to communicate clearly and effectively, the better we’ll be at leading, as our directives will be better understood.
A company-of-one leader has to become an expert at deftly saying no.
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. You need to learn how to evaluate those options quickly and figure out which ones are good to pursue and which ones to say no to.
More isn’t better—better is better. There are advantages to putting in the time and effort to master a skill, but there’s also a great need for balance. When hustling turns sleeplessness into a badge of honor and work demands push health, family, and friends to the back burner, it’s definitely time to take a break.
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.
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.
Staying small and not focusing entirely on growth keep your own integrity and personality at the heart of the business, making it much easier to run your business or team in a way that suits you and helps customers.
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.
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.
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.
Success in business is no longer just about making money or moving up the corporate ladder. More and more, one of the biggest indicators of success is purpose. —Richard Branson
A well-integrated, shared purpose lets a company of one set its true direction, leading to easier decision-making, higher retention of team members, and greater connection to customers.
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 craftsperson mindset keeps you focused on what you can offer the world; the passion mindset focuses instead on what the world can offer you.
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. This is great news because it means you no longer have to beat yourself up for not finding your true, hidden passions. Instead, you can simply get to work.
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.
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.
As a company of one, your brand should very much represent some distinct aspect of yourself, while taking into account whom you’re trying to reach.
The most important currency anyone can give a business, and that attention is worth more than revenue or possessions. In an age of information—almost every piece of knowledge in the world is immediately available on computers we keep in our pockets—the vastness of what’s available to learn, read, listen to, or watch causes a scarcity of attention. Every business everywhere wants a piece of this attention, both online and off.
The best marketing is never just about selling a product or service, but about taking a stand—showing an audience why they should believe in what you’re marketing enough to want it at any cost, simply because they agree with what you’re doing.
Products can be changed or adjusted if they aren’t functioning, but rallying points align with the values and meaning behind what you do. These bold statements are impossible to ignore and make clear that your work is more than the work, that you have a serious reason for doing it in the first place.
The worst-case scenario is inciting no passionate reactions from anyone—no one cares enough about a product to talk about it at all, either positively or negatively.
It’s a great feeling when an employee or business owner goes out of their way to be helpful. There’s something quite memorable about a personal touch, or a business taking ownership of a problem and going out of its way to fix it.
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.
If you treat your customers like they’re your one and only customer, they’ll reciprocate that love for your brand by not only continuing to do business with you but telling their own networks to do so as well. Instead of treating customer service as a cost or expense, you can view it as an investment in retention and acquisition, because you’re essentially building a customer sales force through your support staff.
When your customers win, you do too. In truth, your customers don’t care if your business is profitable—but if you help them become profitable too, they’ll never leave you.
The more you understand your customers, the more you can tailor and position products that provide real value to them, the more you can help them with support requests, and the more you can learn from them because customers understand buyers better than you do. After all, they are buyers.
Focusing on customer success is a mentality and a way of doing business for a company of one that encompasses all aspects of a business. It begins before a product is even created, with planning to make sure everything is done correctly and is of the best quality. This way of doing business includes customer education (which we’ll talk about in Chapter 9) to improve their skillset and foster their success.
Nicholas Epley, a professor of behavioral science at the University of Chicago Business School, says that maintaining good business relationships with customers doesn’t require superhuman efforts. Rather, you simply need to do what you say you’ll do and customers will be grateful.
Growth based on realized profit, not growth based on potential profit (the model adopted by most startups or VC-backed companies).
Most people and businesses don’t work backward. 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,” we should first think: “What type of life do I want?” and “How do I want to spend my days?” Then you can work backward from there into a business model that allows you to create scalable systems to deliver your product to your audience.
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.
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.
Ideas aren’t a valid currency. Execution is the only valid currency in business.
Sharing your ideas far and wide helps build not just a following for what you’re selling but a movement around the core values and thinking that your product stands for.
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.
It’s not enough to just tell people you’re an authority—you’ve got to demonstrate your actual expertise by sharing what you know and teaching others. You build authority not by propping yourself up, but by teaching your audience and customers—so that they truly learn, understand, and succeed. When you make that happen consistently, you’re building and establishing the right kind of authority.
Trust is a strategy that starts before a product is even developed. A trust-based company of one begins with creating something that genuinely solves a problem; then the company rigorously tests the product’s validity before honestly communicating its benefits and outcomes to customers.
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.
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 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.
Unfortunately, a lot of people, especially creative people, look upon marketing in a negative way. The truth is, they really shouldn’t. Marketing is simply building a sense of trust and empathy with a specific group of people by consistently communicating with them. Trust has to be developed before anyone will buy anything.
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.
Making money is often easier than earning trust because money can be lost and won back without judgment, whereas trust is hard to regain once it’s lost. Your word and your company’s word have to be a contract with your customers. This is how many companies of one stand out in competitive industries: by simply doing the work they say they’ll do and then honoring social contracts with their customers.
The paradox of focusing on a niche is that the more specific you are, the easier it is to sell to that group and the more likely it is that you can charge a premium for being that focused. With that kind of focus in mind, you can get to know the specifics of your niche better, learn how to serve customers more effectively, and build a reputation for yourself in that smaller niche.
Trust is more important than virality when it comes to content.
Trust has to be totally baked into every aspect of not only what you sell, but how you sell and support it. For a company of one, even at a tiny scale, maintaining a business worthy of customer trust creates a market differentiator and helps you stand out. Such a business focuses on quality over speed, compassion over profit, and honesty over tricks.
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.
Quickly becoming profitable is important to a company of one because focusing on growth and focusing on profit is nearly impossible to do at the same time.
You won’t know how well your product solves that problem until people are actually paying for it and using it.
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.
Finding a simple solution to a big or complicated problem is your strongest asset as a company of one.
Sometimes, if your idea for a business or product requires a substantial influx of funds to start, it could be that your idea is too large or too complex. And sometimes you should start a business only when people are asking you for something and are willing to give you money for it.
By eliminating bureaucracy and the friction of large infrastructures, you can interact with, listen to, and empathize with your customers directly.
The co-founder of LinkedIn, Reid Hoffman, has said that if you aren’t embarrassed by the first version of your product, you’ve launched too late. 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.
The idea that winners never quit is both overly simplistic and completely false. Most successful founders of companies have quit several times. In fact, it’s their quitting that led them to the success they found after they failed.
It’s much easier to sell to people with whom you’ve already built a relationship because they know that you actually care about them personally and their betterment. In this kind of relationship, selling doesn’t have to be pushy. It’s based entirely on a cultivated friendship.
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.
The difference between relationship companies and companies that focus solely on growth is that the former recognizes that real relationships are built more slowly, in more meaningful ways, and without a 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).
Real connections are built when companies share a simple message, repeatedly, through their actions.
Even a company of one whose true north isn’t growth requires three types of capital. The first is financial capital, which we learned should be as small as possible to start so that profit—achieving your MVPr—happens quickly. The second is human capital, which is the value that you (or your small team) bring to the business or group: this value takes the form of the skills you’ll need—or your willingness to learn them—to build something and be autonomous in running it. The third type of capital required is social capital. While financial and human capital are important, social capital tends to be what makes or breaks a business, as it’s the piece that relates to how a market or audience sees the value in what you’re offering.
There are several schools of thought about building social capital, but a popular theory put forth by Sam Milbrath of HootSuite is that you can begin by dividing your mass interactions with an audience into thirds. Sam suggests that one-third of your updates should be about your business or your content, one-third should be sharing content from others, and one-third should be personal interactions that build relationships with your audience.
All good business relationships have a strong spine of personal friendship, where both parties genuinely care about and want to help each other. These are relationships that last.
Building connections with customers comes down to happiness: if they’re happy, they’ll keep using your product or service. If they’re happy, they’ll tell others about your business. If they’re happy, they’ll stay loyal to your brand. There’s no need to overthink customer relationships when the main point should always be: what can you do as a company of one to make your customers happy?
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.
The traditional way to establish a business is to start by getting an investment (from the bank, from a rich relative, from a VC), then work hard for a long time to create a perfect product. This way of working, however, has a lot of drawbacks. You have to make a ton of assumptions about the market, your positioning, and your customers, and then, before launching, you have to spend a lot of money and then just wait for the results to come in.
Taking the opposite approach, the company-of-one approach can work just as well, if not better. Being able to launch your business without any investment (other than a tiny bit of your own time), you don’t have to make as many assumptions about the market, your product, or your potential customers. You can start your company of one simply by making your business idea as small as possible, then launching quickly.
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.
Business success does not lie in growing something quickly and massively, but rather in building something that’s both remarkable and resilient over the long term.
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.