Company of One: Why Staying Small is the Next Big Thing in Business
Houghton Mifflin Harcourt Publishing, Jan. 15, 2019
272 pages, Hardcover
Reviewed by Chris Wendel
In a Nutshell: For years we have been taught that fast growth is the way to financial success and happiness. “Company of One” explains how this dynamic has changed.
Who’s it for? Aspiring entrepreneurs; someone already working on their own; managers seeking meaningful innovation from the teams they oversee.
Author Quote: “Business success lies in growing something that’s both remarkable and resilient over the long term.”
Traditional American entrepreneurship emphasizes the rapid advance of a business by scaling to large markets in order to maximize financial rewards. Spurred on by the books “The E-Myth” and “The E-Myth Revisited” by Michael Gerber, this viewpoint encouraged business owners to build replicable systems to increase sales and profits, while focusing less on people’s skills. More recently, Silicon Valley startups have made headlines striving for exponential “unicorn” growth that has maligned our view of business success.
Tech consultant and writer Paul Jarvis reveals a quiet counter-movement based on ignoring the siren song of rapid growth, opting instead to focus on high-quality work and running a business that better suits an owner’s lifestyle. Like other shifts in the small business landscape, “Company of One” explains that efficiencies from the internet make it easier for someone working on their own to create manageable systems and reach a distinct (and profitable) customer niche.
Compare this approach to the companies that risk losing their core identity and the respect of their customers as they succumb to growth pressure. Being a devoted customer doesn’t mean much if an upstart company offers new customers lavish incentives that surpass the benefits one received by loyal existing customers. Yet the drive to secure new customers (lots of new customers) reveals the stress that a scaling up business is under to fuel its growth.
Instead of focusing on quickly growing sales, Jarvis stresses that the solo entrepreneur should first determine the desired profit from the business that he or she requires. If their work is in high demand, the price for that work increases instead of adding the pressure of producing more. Instead of hiring employees, the single person business can contract tasks they are not strong in to other outside companies of one.
This simplified approach also means starting a business with a clearly defined market and growing in a slower, methodical way where a company finances itself more from its own profits than from borrowed money. This also eliminates the need to generate large amounts of outside capital and the sacrifice of equity ownership to feed scaled up growth.
Jarvis uses Psychotactics – a consulting company run by Sean D’Souza – as a good example. D’Souza sets limits on his annual profit, salary and growth. By performing higher-quality work for customers that fit with his expertise, he is able to work more on his terms, take long vacations and spend more time with his children. D’Souza also resists the urge to take on employees. Instead, he uses contract workers to cover the tasks that he is not strong in. Taking on this refined management style is not easy. Jarvis stresses that it takes resiliency, plus the ability to both manage and prioritize to be successful.
In the end, “Company of One” harkens back to a book that was popular three decades ago, “Growing a Business” by Paul Hawken. Hawken focused on developing a single location retail business that stressed high-quality products and fitting well with its community. Seth Godin’s recent book “This Is Marketing” also runs on a parallel track to “Company of One” with its theme of attracting a specific and meaningful customer niche. By sticking to an original vision, it is possible for a business owner to serve customers effectively, while maintaining a healthy and fulfilling life. If you work on your own or run a business or organization with that’s a bit larger, “Company of One” is a relatable book that will help you recalibrate your priorities.
Chris Wendel is a business advisor with Northern Initiatives, a Community Development Financial institution based (CDFI) based in Marquette, Michigan. Northern Initiatives provides money and know-how to businesses throughout Michigan. Wendel lives and works in Traverse City and can be reached at email@example.com.