By working to become profitable as quickly as possible in tiny steps and not waiting for tremendous scale to happen, Jeff got a bonus: scale happened anyway. (Location 2214)
In short, his profits rose because the increased volume cut his costs. (Location 2215)
For two years Jeff created clothing and routinely sold it out through Ugmonk and its website while still working in his full-time design job. (Location 2217)
During those first two years he lived off his salary from the full-time job and invested all the profits from Ugmonk back into his company of one until there was enough momentum and scale to pay himself and the other people who worked with him. (Location 2218)
Although Ugmonk was profitable from the beginning, Jeff has been careful not to scale too quickly. (Location 2221)
As a company of one, you need to reach profitability as quickly as possible. (Location 2225)
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. (Location 2226)
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In determining your minimum viable profit—the point at which your business is operating in the black (we’ll call it MVPr from here on in)—keep in mind that the lower the number, the quicker you can reach it. (Location 2230)
So it’s important to scale up your timelines and focus on core features only, reduce expenses and overhead, and ensure that your business model works at a small scale first. (Location 2231)
The assumption at work here is that your MVPr—not the number of your customers, not your measured growth, not even your gross revenue—is the most important determinant of the sustainability of your company of one. (Location 2233)
If you make a profit right from the beginning, then you can figure out everything else. If your expenses are low, profit happens sooner. (Location 2234)
Profit happens when the business is making enough money to cover a salary for the owner(s); this is the “minimum” part of MVPr, as a company of one can be a full-time endeavor only when it’s making enough to support at least one person. (Location 2239)
The more viable your company becomes, the more your profits can truly grow. From there, you can choose to pay yourself more, to focus on scaling systems, to work less and keep paying yourself the same, to invest in the business further, or to grow based on the increased money coming in. In the end, the choice is yours. (Location 2242)
Becoming a business that earns revenues predictably and consistently is a milestone for a company of one. MVPr is achieved with the least investment and in the shortest amount of time possible. (Location 2244)
Quickly becoming profitable is important to a company of one because focusing on growth and focusing on profit are nearly impossible to do at the same time. (Location 2246)
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A company of one begins quite small (one person, no office required) and spends only when profits allow it. (Location 2251)
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Growth is much slower because it’s incremental from zero—a tiny amount of profit leads to a tiny amount of spending, which leads to slightly more profit and then slightly more spending, and so on. (Location 2251)
With companies of one, exponential profit increases aren’t a core objective because just hitting profitability is usually enough. (Location 2253)
Simplicity Sells (Quickly) (Location 2256)
you don’t learn anything until you launch. (Location 2257)
you won’t know how well your product solves that problem until people are actually paying for it and using it. (Location 2258)
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. (Location 2263)
Once these startups were up and running, they were able to build from customer feedback and make positive changes. (Location 2268)
launch your company quickly, but then immediately start to refine your product and make it better. (Location 2270)
finding a simple solution to a big or complicated problem is your strongest asset as a company of one. (Location 2275)
Your unique ingenuity can’t be outsourced to artificial intelligence or to a massive team. Your ability to problem-solve with simplicity will keep you and your skills relevant in any market. (Location 2276)
For a company of one to launch a new product, the process has to be simple. (If you recall from Chapter 1, this is a defining trait of companies of one.) Your launch should be simple in choice, simple in messaging, and simple in hypertargeting only one audience. (Location 2279)
Being predictable means that simple products are easy to instantly understand. (Location 2282)
Being accessible means being honest: (Location 2284)
to serve as a building block is to build on an existing and understood concept. (Location 2285)
Keeping your launch simple lets you avoid roadblocks in getting your product to market and then sharing it with the market. (Location 2292)
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. (Location 2293)
crowdfunding seems more aligned with companies of one—if the product idea solves a problem for an audience, that audience will become customers. (Location 2314)
investors—who are predominantly white males—prefer ventures pitched and run by people like themselves, i.e., other white men. By contrast, women excel with crowdfunding, according to research from PwC and the Crowdfunding Center: they are actually 32 percent more successful at hitting their fundraising goals than men. (Location 2321)
Katherine herself works from various parts of the world, spending each quarter in a different country. (Location 2329)
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. (Location 2331)
And sometimes you should start a business only when people are asking you for something and are willing to give you money for it. (Location 2332)
He didn’t have to please anyone but his customers and himself. Every decision, he feels, whether it’s to raise money, to expand a business, or to run promotions, should be done according to what’s best for your customers. (Location 2338)
When they launched another product, Unsplash (royalty-free stock photographs), they did so in a similar manner: they bought a $19 Tumblr theme and uploaded ten high-resolution images taken by a local photographer. Within three hours, the first low-fi version was launched. They did the work manually until a scalable system was absolutely required, then invested in it with their profits. (Location 2345)
a business succeeds only when it’s viewed by your audience as useful. So your first goal, as a company of one just starting out, is to figure out the best way to solve a specific audience’s problems, and then get to work at doing it quickly and cost-effectively. (Location 2350)
By starting out small, a company of one can put all of its energy into solving problems for real people rather than into growing large enough to maybe solve problems for people one day. (Location 2352)
by eliminating bureaucracy and the friction of large infrastructures, you can interact with, listen to, and empathize with your customers directly. (Location 2354)
if you’d like to sell an online course that teaches people how to run an online business, then it’s faster to offer that advice as a one-on-one consulting service first. (Location 2355)
most people who start a new business by themselves make the mistake of believing the products should always come first. (Location 2359)
new founders can start almost immediately by offering their product idea as a service first. (Location 2361)
We somehow feel that there’s magic in the first time we open our (sometimes digital) doors to the public. (Location 2367)
WD-40, the well-known everyday lubricant, is literally named after its thirty-nine failures and one success. (Location 2371)
Only after you’ve first launched can you then start to measure data and collect key insights: what worked, what did not, how was it received, and how could it be positioned differently? (Location 2374)
Launching isn’t a onetime, singular event, but a continual process of launch, measure, adjust, repeat. (Location 2375)
if you aren’t embarrassed by the first version of your product, you’ve launched too late. (Location 2376)
most wildly successful companies achieved their place only by course-correcting, changing entirely, or iterating their way to greatness. (Location 2378)
every great company that’s very profitable and successful started out as simply good enough to launch. (Location 2380)
successful companies that thrive over the long term work at a single task and master it. (Location 2384)
your focus on serving customers needs to be singular. (Location 2385)
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. (Location 2394)
By iterating and relaunching, greater results can be achieved. (Location 2395)
launch quickly, but immediately start to refine and improve your product. (Location 2397)
Without iteration and adjustment based on new data and insights, a company will stagnate and die. (Location 2407)
if you’re continuing only because you’ve put so much of your time and energy and heart into the project, then it’s not logical to keep at it. If you’re overvaluing your plan because it’s your plan (known as the “endowment effect”), then you should probably quit. (Location 2415)
if your initial vision still seems objectively valid and progress and profit are just coming along slower than you’d like, by all means continue. (Location 2424)
reduced costs to a minimum so they could achieve profit faster. (Location 2429)
by working toward MVPr as quickly as possible with a simple solution and then iterating upon it after it’s launched, your company of one can build a resilient business that may change over time in its products or features, but still serves and is totally valuable to its customers. (Location 2432)
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. (Location 2444)
if your business is constantly selling and constantly pushing its wares, people instinctively start to avoid your business or stop responding to your emails. (Location 2446)
But if you use your platform to teach, empower, and make customers’ lives or businesses better (as we saw in Chapter 9), you are seen as a trusted adviser, not a shady or slick salesperson. (Location 2447)
He creates relationships by constantly thinking: Who do I know who could benefit from connecting with this person? (Location 2449)
consumers innately trust smaller businesses over large corporations, deservedly or not. (Location 2453)
Smaller businesses tend to want to act like larger companies, which is curious, since many large businesses these days are trying to act like smaller ones. (Location 2457)
When customers say that they want more personal experiences from a brand, what they really want is a more personal connection or relationship with the company, so as to be understood better by them. (Location 2461)
Companies of one can be proud to be companies of one and can use their personality to stand out and their smaller focus to niche down to the specific groups of customers they want to serve. They can know customers by name, by need, and by motivation. (Location 2463)
no audience or consumer group is solely one business’s property. (Location 2468)
Chris uses his own mailing list mostly just to connect with his audience, through weekly articles; (very) occasionally, he pitches them products he’s created. (Location 2471)
For the most part, though, he uses his list to connect with the community he serves with news, information, and valuable content. (Location 2472)
Building relationships by being helpful first enables an audience to benefit from the relationship, and that experience will lead them to feel a sense of real reciprocity (Location 2473)
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. (Location 2476)
Companies of one don’t growth-hack, because the true north of growth-hacking is, of course, growth. (Location 2479)
Relationships for growth-hackers mostly revolve around offsetting churn, in that their goal is to build an audience as quickly as possible, then sell as much as possible to them until they relent, buy, or give up and leave. (Location 2482)
Metrics produced only by growth aren’t always good indicators of a healthy, sustainable, profitable business, and they certainly can’t compete over the long haul with customer satisfaction from an empathetic company and a well-developed product. (Location 2501)
Kiva is a relationship business whose outcome is microloans. (Location 2513)
A company of one finds its true north by working toward being better, not bigger, and the way to do that is to build long-term relationships with its audience and customers. (Location 2514)
The difference between relationship companies and companies that focus solely on growth is that the former recognize that real relationships are built more slowly, in more meaningful ways, and without massive turnover. (Location 2516)
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). (Location 2518)
real connections are built when companies share a simple message, repeatedly, through their actions. (Location 2525)
The newsletter isn’t directly pitching your fortune cookies each week, as no one would want to subscribe to a weekly product pitch. What it does is show the potential benefits of rewarding good work, featuring your product as one specific way that can be accomplished. (Location 2532)
as a business first and foremost, you want your customers to succeed and thrive, and that secondarily you’ve got a product that can help them do that. (Location 2534)
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. (Location 2543)
When cashed in, social capital is what you can ask people to do that benefits you (like buying your product or having someone share what you wrote with others). (Location 2546)
Relationships are currency. So companies of one need to think of social capital like a bank account. (Location 2549)
you have to make deposits into your social capital account often and build up your balance well before you ask your audience to buy what you’re selling. Do this by being helpful and creating value for as many people in your audience as possible. (Location 2554)
At the core, your social capital depends on what you can provide for your audience that educates and builds trust, value, and reputation. (Location 2556)
Relationships are the basis for building the trust required for commerce. (Location 2559)
Sometimes doing something that doesn’t scale but is truly genuine is a great way to form strong connections with your audience. (Location 2565)
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. (Location 2568)
as much as 26.6 percent of variance in sales performance comes from the social capital of a business. So building relationships by banking social capital leads directly to higher sales—sometimes as much as one-third higher. By sharing and teaching, as we’ve seen in previous chapters, you can establish yourself as a credible expert. And in helping people with your expertise, you can build social capital with an audience. (Location 2571)
Social capital works because it fosters reciprocity. (Location 2574)
Empathy takes a relationship from “What can I sell you?” to “How can I truly help you?” (Location 2579)
HighRise, a CRM (customer relationship management) company (and an offshoot business of our friends at Basecamp), does something most unusual when a person becomes a customer of their software—their support team films a personalized video for that new customer: addressing them by name, asking what help they specifically need, and giving them direct access to a human being at HighRise. (Location 2581)
in Lieberman’s estimation, belonging and connection, which Maslow defines as psychological needs, are our most basic need and should be at the bottom of the pyramid, (Location 2591)
Large businesses, however, in focusing on making everything quicker, often offer little real human interaction. (Location 2593)
Obviously, scalable systems are important, but only if human interaction is still at play. (Location 2594)
Too often, companies put all of their focus on turning their audience into paying customers and don’t spend enough time connecting with people once they become paying customers. (Location 2595)
In their efforts to increase reach, audience, and customers, companies cannot forget about their existing customer base. (Location 2600)
Daiya had felt that it could reach a larger customer base by selling itself to a multinational company, but the resulting sudden misalignment of values caused loyal and long-term customers to revolt. (Location 2606)
Note: Misalignment - revolt
By not first considering the core group and relationship that your business serves, you can run a risk of making them feel like they don’t matter—or worse, making them feel like your company doesn’t care about them. (Location 2615)
consumer outrage rarely stops at angry tweets—it causes serious business repercussions too. (Location 2618)
customers need to admire your “whole person”—not just how you act when you’re trying to sell them something. (Location 2625)
Customers admire businesses that feel and act similarly to them. (Location 2628)
it’s important that you maintain the relationship over time, even with customers who haven’t financially supported your business in a while with a purchase. (Location 2630)
Consistency and longevity are key. (Location 2631)
Building connections with customers comes down to happiness: if they’re happy, they’ll keep using your product or service. (Location 2638)
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? (Location 2640)
partnering with the top people in related fields in order to offer fuller services to its clients. (Location 2645)
tight-knit and trusted network of independent business owners who work together under a single brand for a client. (Location 2647)
Each person serves on a team that is brought together for a specific project, then disbanded until they’re required again. This requires no micromanaging, as these business owners are skilled at the service that’s required of them, so full autonomy, with the direction of a project lead, can and does happen. (Location 2648)
by building connections to other independent contractors, the company can pool its expertise and skills with these other businesses and take on much bigger contracts. (Location 2656)
Wakefield Brunswick only partners with other businesses when a project requires it; otherwise, they are free to work on whatever they want. (Location 2657)
Ghostly Ferns, a “family of designers,” works on agency-sized projects while remaining a loose group of independent workers who all offer different design services, from illustration to branding to web application design. (Location 2659)
The team grows and shrinks as projects demand, and individual members also take on their own projects as needed. (Location 2661)
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 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. (Location 2668)
The people I know with their own company of one spend approximately half of their time, or less, doing their core skill (writing, designing, programming, etc.). They spend the rest of their time on the business—chasing leads, doing their books, communicating with clients or customers, marketing, and so forth. (Location 2713)
“People want to be the noun without doing the verb.” (Location 2718)
Ideas and dreams are nice, but they’re also cheap and meaningless if you don’t take action and do the work to make them happen. (Location 2720)
The daily slog is what separates wannabe business owners from those who make it a reality. (Location 2723)
Working for yourself requires ego and purpose in equal measure. (Location 2723)
ego is involved, not in a bad way but in a “I know I can do this better” sort of way. (Location 2726)
For myself, I happen to like choices. I like that I can choose to make less money by saying no to a project or a client or a customer I don’t think is a good fit for me. (Location 2732)
This freedom of choice is my north star. (Location 2735)
sometimes the best client isn’t the best fit but he’s the one who’s here right now and willing to pay you this month. (Location 2737)
I would add small bits of helpful advice without offering my own services or charging them. More important, I wouldn’t be pushy about it—I’d just look for folks who have questions I have answers to. (Location 2752)
Basically, I would offer a free consult or a project roadmapping session. (Location 2754)
I’d start by finding a single person to offer my knowledge to. Then another. And another. (Location 2756)
I’d talk to as many people as possible, until I start to notice definite trends where people are having issues or not understanding things. And I’d do all of this without pitching or selling myself once. (Location 2757)
Long before I’d start selling anyone anything, I’d be building relationships with the people I’ve helped in some way. I wouldn’t build this following so I could “promote” or sell to them later. I’d build and foster relationships with these people so I could continue learning from them. (Location 2762)
Most important, I’d do this fact-finding/mini-consulting while I was working somewhere else, probably at a full-time (Location 2765)
Through a blog, I could write publicly about what I learned and eventually compile my posts into a book—full of insight into common client issues and how they can be resolved (as I did in writing a previous book). (Location 2768)
Or I could use my newly acquired knowledge to create my own services, since I’d know where my potential audience needed the most help. (Location 2769)
the people I’d helped would help me precisely because I had helped them (Location 2771)
In my own company of one, every single business I consulted with or roadmapped for wanted to hire me to execute the plan I’d helped them come up with. Even when I was charging good money for consulting, I’d still be at the top of each client’s list to hire. Being helpful proved to be a great lead-generation funnel. (Location 2772)
My new business would be based on helping others first, with a contract for web design or design consulting coming later. (Location 2775)
I’ve simply used my skills to help others, because I enjoy doing it. And I’ve offered this help for free, in small doses at first, and then later for good money in larger doses. (Location 2780)
The best thing about gearing your business to make money now rather than spending money now to maybe make more money later is that profit happens faster. (Location 2784)
All you need is to be a decent human being with a valued skill set and a willingness to share what you know with people who’ll listen. (Location 2787)
I focused on the work I could do immediately in order to make enough money to cover living expenses once I moved out (which I did quickly, heading west) and then to not only make a living but save as much as I could. (Location 2789)
You can start your company of one simply by making your business idea as small as possible, then launching quickly. (Location 2796)
In the beginning, can you reduce any of your expenses so that you can do less work to be profitable each month? (Location 2809)
If acquiring three clients seems doable but having five would stretch you too thin, you’ve got to either reduce your overall costs or raise your rates. (Location 2811)
Consider how long it takes to find a client, court the client, work with the client, and then finish up each client’s project. (Location 2812)
after you’ve separated your company of one from yourself personally, you need to prevent your company from being taken advantage of. (Location 2830)
Since revenue from my work can sometimes be inconsistent, I’ve always figured my base salary as the average I’ve made in profit (not revenue) for the last twelve months, minus 25 to 30 percent (to set aside for taxes). Before raising my salary if my profits increase, I also take into consideration the minimum amount I need each month to live on and be comfortable. (Location 2857)
keep in mind that the more money you take out of your business, the more it’s taxed. (Location 2861)
I truly think companies of one should invest as much money as they can save up in passive investments like index funds. (Location 2873)
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. (Location 2880)
By removing the hurdle of having to consider scaling up in all areas at all times when things are going well, you can open yourself up to investing in enjoying your own life. (Location 2905)
The temple construction company had survived countless political crises, two atomic detonations, and even a period when the Japanese government set out to eradicate Buddhism from Japan completely. But ironically, what they couldn’t survive was the cost of rapid growth. Their downfall was putting growth above stability and profit. (Location 2933)
the average life span of a business on the S&P 500 is only fifteen years total. (Location 2944)
Becoming Too Small to Fail (Location 2946)
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. (Location 2947)
Success, then, ought not to be measured by quarterly profit increases or ever-growing customer acquisition, or even by your ability to create an exit strategy and leave with more than you entered with. Instead, as Natasha Lampard of the popular internet conference “WebStock” says, you can focus on an “exist strategy”—based on sticking around, profiting, and serving your customers as best you can. (Location 2953)
Your success can be measured by being profitable quickly as you stay small and build real relationships with your customers—not because you’re an altruistic hippie, but because it pays off over time. (Location 2956)
Ricardo Semler, whom I quoted at the start of this book, believes that profit past the minimum isn’t essential for business survival. He likens going for profit at all costs to seeing a jail with empty cells and assuming that not enough prisoners have been rounded up yet. (Location 2965)
Enough is the antithesis of growth. (Location 2974)
Note: Bam
When you become too small to fail, you also become small enough to make your own choices about your work. (Location 2977)
Real freedom is gained when you define upper bounds to your goals and figure out what your own personal sense of enough is. (Location 2978)
There’s a satisfaction in reaching the point of enough in your business, and then knowing that you don’t have to explore every new potential opportunity that comes up. (Location 2979)
There’s a point—and it’s different for everyone—where you realize that having more won’t affect your quality of (Location 2999)
As long as you’re questioning concepts and determining what’s best for your own business and customers, I’ll be happy. (Location 3004)
In fact, there are infinite paths, and unless you start asking questions about each pathway, you may not enjoy where you end up. (Location 3007)
There’s only one rule for being a company of one: stay attentive to those opportunities that require growth and question them before taking them. (Location 3016)
The more products, the more markets, the more alliances a company makes, the less money it makes. (Location 3021)
