Company of One - Book Summary

Unravel a fresh approach to business triumph

Imagine what it takes to succeed in the world of business. Your mind probably paints a picture of large corporations, groundbreaking products, and influential CEOs—think Amazon, the iPhone, or Bill Gates. This perspective on success might appear overwhelming, making your chances of launching the next corporate titan, crafting the next hit product, or establishing the next billion-dollar startup appear quite slim.

But let's pause for a moment — does this "bigger-is-better" model of success really appeal to you? Is your dream to be consumed by the hunt for profit, new marketplaces, and constant management of expansive organizations? Or would you rather savor the freedom that comes from owning a small business, without needing to sacrifice your personal life at the altar of relentless growth? Do you yearn for a life where work takes up only a fraction of your hours, allowing you to spend the rest relishing quality moments with your family, exploring new places, or indulging in your hobbies?

If these questions stir a sense of curiosity within you — if the idea of scaling down to achieve success strikes a chord — then this audio experience will resonate with you.

Through this journey, you will learn how to:

• Transform a side hustle into a profitable and sustainable small-scale enterprise,

• Find a sense of fulfillment in your work, and

• Accomplish all this without the need for substantial financial resources to kickstart your endeavor.

A fresh approach to business: Embrace balance over boundless growth

In a single word, the ethos of modern capitalism can be summarized as "more." You see it in every sector of the economy — consumers perpetually seeking to acquire more products and services, businesses continuously striving to sell more to increase their profits. The moment one revenue goal is achieved, the bar is raised even higher. Be it $1 million or $10 million, the pursuit is ceaseless.

In essence, the appetite is never satiated. Both consumers and businesses are driven by an unquenchable thirst for constant consumption and growth. But, as with any rule, there are exceptions to this paradigm.

Echoing the sentiments of consumers attempting to curb their consumption, some businesses are also starting to proclaim "enough is enough." Instead of endless expansion, they are veering towards a more balanced, satisfying, and sustainable approach to growth.

These unique businesses exercise self-restraint to chase a financial aim that turns the conventional corporate model upside down. The goal? To generate sufficient revenue that allows their owners and employees to secure the comfort, independence, and leisure time they desire in their lives.

Centering this aspiration as the focal point of their operations, these businesses revolve around the individuals at their helm, as opposed to the reverse. The individuals become the businesses' yardstick for measurement — forming a unit of one. Whether it's a single owner-operator, a team of a couple hundred employees, or something in between, these entities deserve a distinct label — let's call them 'companies of one.'

Contrary to conventional business practice, companies of one set strict growth boundaries to maintain their petite structure. Take the example of Sean D'Souza's firm, Psychotactics, a consultancy service provider. His growth ceiling is capped at $500,000 in profit per annum. Even though he could potentially earn more, he deliberately restricts his company to this profit threshold.

Why not aim for more? Borrowing a famous phrase from rapper Notorious B.I.G., "more money, more problems." In a broader sense, higher profits demand increased production, sales, and customers. This leads to the necessity for more employees, infrastructure, and bureaucracy — resulting in more exhaustion, supervision, and working hours. Consequently, there is less comfort, autonomy, and free time — completely defeating the purpose of a company of one!

D'Souza, for instance, would rather spend his time playing with his children or embarking on three-month vacations. If this resonates with you, establishing a company of one might just be the ideal path for you too!

Deciphering the difference: A company of one versus traditional small businesses and freelancing

You might be tempted to think of a "company of one" as simply another term for a small business or a freelancer. However, important distinctions exist between these three forms of self-employment.

Typically, if a small business remains small, it's often perceived as having limited success. While some small businesses might be comfortable with this notion, many aspire to expand their operations, increase their profits, and achieve greater success—aligned with the "bigger is better" philosophy. Presented with opportunities to scale, many small businesses would jump at the chance.

In contrast, a company of one, having already reached its growth limits, would decline such opportunities. Staying small isn't a sign of failure for these companies; it's integral to their definition of success: attaining and maintaining a self-determined level of income.

However, one key similarity connects a small business and a company of one: both are profit-oriented. They invest a certain amount of time or money into their operations, expecting a return on investment, if all goes well. Often, this involves an initial labor investment. For a company of one, this could mean creating a t-shirt design, developing software, or creating an online course.

Once the products are complete, the company starts earning without having to invest significantly more effort — particularly true for digital products that can be replicated with minimal additional labor.

On the other hand, a freelancer's income typically ceases the moment she stops working. She's paid either per hour or per piece of work, each necessitating a certain amount of time. Essentially, for a freelancer, time equals money, and money requires time.

Unlike a company of one, a freelancer usually can't continue profiting from her work once it's completed. Consider a freelance web designer: she can't design a single website and sell it to multiple buyers. The transaction with her client is a one-off. Once completed, she moves on to the next client or project.

Meanwhile, an owner of a company of one might be off surfing, continuing to earn money from work completed months ago!

While freelancing vastly differs from running a company of one, it can be an effective stepping stone towards the latter, as we'll explore in the following segment.

Start with a side gig: Launch your company of one without quitting your day job

From here on, we'll explore the journey of establishing a company of one, dissecting the process step by step. As we move along, we'll also delve into the distinct features, goals, and strategies that characterize a successful company of one.

The first step may surprise you — it's about not taking a particular action: don't quit your day job. Like many nascent companies of one, your new venture is likely to sprout from a side gig. It must evolve into a sustainable enterprise before you can fully dedicate yourself to it and transform it into a thriving company of one.

Take the example of Tom Fishburne, who spent two decades in marketing. In his spare time, he nurtured a hobby he had cherished since childhood: cartooning. Initially, it was simply a leisure activity. Gradually, he started accepting side gigs, crafting drawings for clients during weekends and evenings.

He didn't resign from his job to pursue cartooning full-time until he had established a robust client base and saved enough money to create a financial safety net. This buffer was aimed at covering his living expenses during potentially slow months.

That was seven years ago. Since then, he's been earning double or even triple the salary he made as a marketing executive. Meanwhile, he's been able to spend quality time with his family and do something he loves — creating cartoons for businesses that use them in their marketing efforts. All this forms the backbone of his work at Marketoonist, a company of one nestled in his serene, sun-kissed home in Marin County, California.

Tom runs the company with his wife, occasionally hiring freelancers as and when needed — but that's as far as their expansion plans have gone. Despite having a waiting list of clients and the potential to earn more by scaling their operations, Tom and his wife have chosen not to.

Tom and his wife aren't aiming to become the next corporate behemoth. They simply wish to enjoy their lives. For Tom, that means cartooning — not overseeing a colossal workforce or managing a chain of satellite offices.

Tom's story imparts a valuable lesson: if scaling up implies making compromises you're not willing to make, it's a clear indication that your company of one has hit its growth limit!

But remember, at this stage, when you're still nurturing a side gig, you're far from having to worry about managing excessive growth. So, bearing Tom's lesson in mind, let's move on to the next step in your journey.

Ignite passion from your work, rather than chasing work from your passion

After successfully resisting the urge to leave your day job, you might wonder, what's the next stride towards developing a side gig that could eventually evolve into a company of one?

Well, the first step is to identify the gig, assuming you haven't already done so. At this juncture, you might feel inclined to heed the conventional wisdom propagated by business gurus: pursue your passion.

However, there's a minor hiccup with this counsel. Unless your passion aligns with an in-demand, marketable skill, making a financial success out of it might not be realistic.

Most people's passions don't dovetail with market demands. Let's take a 2003 study by Robert Vallerand, a psychology professor at the University of Quebec, as an example. When he asked his students about their passions, the majority cited sports, music, or art instead of their majors. But with these fields constituting only 3 percent of all jobs, a career based on these passions would be an uphill battle for most.

This fact may be stark but it's crucial to acknowledge. You may love playing tennis but the chances of becoming the next Serena Williams are slim. The same holds true for other passions that only a small percentage of people can transform into a full-time, lucrative career.

It's imperative to be practical. Ask yourself: What am I already proficient at that others would pay me for? If the answer is "nothing," consider: What could I potentially improve upon and transform into a marketable skill?

For the author, the answer was web design. While he wasn't overly passionate about it, he was employed at a design agency and had honed his skills there. As he transitioned from the agency to establishing a web-design company of one, he refined his skill set, continually improving at addressing his clients' issues. This process fostered a sense of satisfaction and enthusiasm for his work and its outcomes — a sentiment akin to passion!

To sum up, don't wait around for a financially feasible career path to suddenly emerge from your passion. Instead, zero in on identifying and honing a marketable skill set right away, allowing your passion to gradually evolve from refining, mastering, and aiding others with that skill.

Zoom in on a particular audience and carve out your niche

As you identify and polish a marketable skill set, you may fall prey to a common misconception: the more people who desire the product or service your skill offers, the better. After all, a larger market implies more potential customers, right?

However, by attempting to cater to everyone, you may end up appealing to no one. The pitfall here is that targeting the lowest common denominator could lead to a generic product or service that dilutes your brand's charm.

Even conglomerates aren't immune to this pitfall. Take Starbucks as an example. In its early stages, Starbucks positioned itself as a local, boutique-style coffee shop that was accessible at multiple locations.

However, around the mid-2000s, with an abundance of Starbucks outlets appearing on every corner, coupled with an ever-growing product range, the Starbucks experience began to lose its allure. The charm of high-quality coffee was eclipsed by an array of sandwiches, CDs, and a plethora of extravagant drinks, while its local charm was debunked by its omnipresence.

The company found itself overstretched and began to struggle. By the end of the decade, approximately 900 stores had been shut down. Since then, Starbucks has pulled back and refocused on its initial mission, learning the hard way that it's impossible to be all things to all people.

If the Starbucks example hasn't deterred you from pursuing a mass audience, bear in mind that larger markets typically draw a larger crowd of competitors, which further complicates standing out from the crowd.

Therefore, it's better to find a niche. The smaller and more defined your target audience, the easier it will be to connect with them and build trust. And the more specific their needs, the simpler it will be to learn how to cater to them. This approach will allow you to command premium prices for your customized, impeccably provided products or services.

This is exactly what successful e-commerce consultant Kurt Elster did. Rather than offering general consulting services to all e-commerce businesses (a vast audience), he has increased his revenue eightfold by positioning himself as a consultant who works solely with businesses using the Shopify e-commerce platform.

Reflect on this: If you ran a Shopify-based business, who would you prefer to hire as a consultant — a generalist who claims he can work with anyone, or a specialist like Elster who is well-versed with the platform you use?

Harness the might of minimalism and individuality

You can focus your product or service further with two additional strategies — adopting simplicity and embracing your unique personality.

First, let's talk about simplicity. This principle can be illustrated with the example of Casper, a small online mattress company. The mattress industry is far from unique, so what makes Casper stand out?

Casper has chosen a specific audience — younger people seeking better sleep quality, but without the hassle of shopping in brick-and-mortar stores. Moreover, while their competitors confuse customers with numerous options, Casper offers just three types of mattresses.

By narrowing down its audience and simplifying choices, Casper provides a clear proposition: buy a better mattress online, bypass the trouble of in-store shopping, and if you're not satisfied after 100 nights, return it for a full refund.

The second strategy entails enhancing your uniqueness by utilizing your most potent asset — your personality. Even within a particular niche, you might still find yourself outmatched by larger, more established competitors.

Luckily, what may appear as a drawback can be turned into your advantage. True, you're only one person — but you possess a unique personality, giving you the ability to brand your business, product, or service in a distinct way.

To accomplish this, pick an aspect of your personality and weave it into your work and its communication, permeating everything from your product design or service delivery to your emails, tweets, and customer interactions.

Here again, the principle of simplicity applies; your personality-driven brand should be describable with straightforward adjectives like "youthful," "rebellious," "authentic," "capable," "sophisticated," or "vibrant." Then, put your unique twist on these descriptors — a twist that reflects your true self.

Always remember: your competitors might offer similar skills, products, or services, but they can't imitate your personality. It's your personality that will set you apart from the crowd, so let it shine brightly!

Establish a bond with your audience while gaining insight into their needs

Once you've honed your marketable skills and identified your niche audience, you're ready to offer a product or service they'd happily pay for. The trick now is to convince them that you're the best person to deliver what they need!

This task isn't accomplished overnight, and it involves a multistep process. First, you need to connect with your audience and understand their needs to better cater to them. Offering free consultations with no strings attached can be an effective strategy to accomplish this.

Imagine you're launching a web design business. You'd begin by identifying individuals in need of a web designer or those who have recently hired one. Engaging them in conversations about their experiences can provide invaluable insights. You'd learn about their search methods, hiring criteria, objectives, negative experiences, and questions about the web design process.

Responding to these queries allows you to position yourself not just as a consultant, but as a trusted expert in your field — someone whose knowledge and expertise others can lean on.

However, during this phase, you're not charging a cent or even promoting your services. Your genuine aim is to assist your audience, albeit in small, meaningful ways.

Emphasize the word "small" here. You're not offering to revamp someone's entire website for free. Instead, you're providing answers, suggestions, a second opinion, brainstorming sessions — let's call them mini-consultations.

This process aids you in learning about your audience, building your reputation, and cultivating mutually beneficial relationships. By the time your mini-consultations are over, they've already benefited you, and you've assisted them, without any money changing hands!

After you've fostered these relationships and demonstrated your value, who will your audience turn to the next time they require a paid web design service? A stranger, or you — a person they already recognize and trust as an authority in the field?

In the author's experience, the latter was true; almost everyone he consulted ended up wanting to hire him.

Forego hefty initial investments and aim for swift, cost-effective profitability

Once you've built your reputation, demonstrated your authority, and cultivated relationships with prospective clients, you've reached the stage where you can start doing serious business and making a profit. It might seem like it's time to quit your job, rent an office, order swanky business cards, and make other big moves, right?

Hang on a minute. It would be best to hold onto your job until your budding venture matures and rethink any substantial investments.

These investments might be unnecessary. Numerous technological advancements let you forgo massive outlays that would've been essential earlier. Services from a remote contractor can replace an in-house IT department. Free analytics software can provide valuable insights into your website traffic without needing an in-house expert.

If you still find yourself needing to make significant investments, you may need to reassess. Your plan might be overly ambitious. At this stage, you should aim to be more modest. Unlike traditional start-ups that make extensive upfront investments in anticipation of even larger future profits, your goal as a prospective one-person company is to become profitable as quickly and economically as possible.

You can't count on the large capital injections that traditional start-ups might receive from external investors. While this might seem daunting, it actually allows you to remain more independent than a start-up, which often needs investor approval for major changes. However, this means you don't have the luxury of spending money while taking months or even years to turn a profit.

The longer you take setting up your business to generate money, the longer you're not making money from it. Moreover, the more money you spend establishing your business, the more challenging it becomes to earn a profit. After all, higher upfront costs mean you need more revenue to break even, let alone turn a profit.

Thus, it's crucial to develop a sellable product or service as swiftly and cheaply as possible. Perfection isn't necessary — it just needs to be good enough to get things started!

Once you set the ball rolling, your business can grow gradually, leading to a snowball effect. Let's explore this in the next section.

Let your business grow organically, making investments as necessary

At the start, your product or service offering will likely be humble: a handful of clients, a few projects, or a limited product run. However, these few clients or projects can lead to more, triggering a chain reaction or a 'snowball effect'.

Consider the example of Alexandra Franzen, who transitioned from a career in radio broadcasting to become a professional writer. Success didn't come overnight. Initially, she only landed three projects. But each project led to another, as her initial clients rehired her or referred her to new ones. Fast-forward to today, and she has a client and project backlog that extends nearly a year!

A similar progression occurred when Jeff Sheldon founded Ugmonk, a small but successful clothing company. He kickstarted the brand with a $2,000 loan, creating four t-shirt designs and a limited run of 200 shirts, which sold out quickly.

The success of this initial run resulted in successive production runs, enabling him to repay his loan and turn a profit almost immediately. He continued to support himself with his regular job income while reinvesting the profits back into the company, allowing him to fund further production without any additional outlays.

For the first two years, Sheldon ran Ugmonk from his apartment. Only when the business outgrew his living space did he invest in a warehouse. This instance underlines an important point: it's okay to make larger investments in your one-person business — but only when necessary and at the right time.

Rather than trying to predict and invest in every potential future need, add new tools, infrastructure, software, contractors, etc., as your business's needs evolve and your revenue allows.

However, remember, as a one-person company with deliberately limited operations and profit level, you'll need to handle many of your business's needs independently. Unlike a larger company, you can't delegate tasks like marketing or customer service to dedicated departments. You'll need to become a multi-skilled entrepreneur, handling the majority of these tasks yourself.

Emphasize customer service and strive for customer loyalty

As you embark on the journey of creating a one-person company, your competitive edge lies in the petite size of your operation. This size allows for a personal touch with your clients and a focus on offering them exceptional customer service.

As your business develops, you might feel inclined to scale back this personalized attention and service — but this could be risky. The personal touch makes your company likeable, and it could be challenging to persuade people to keep doing business with you if they stop finding you personable.

Customer service is a pivotal aspect of success in the current economic landscape. According to a study by Harris Interactive, a market research firm, 90% of Americans are willing to spend more on businesses offering stellar customer service. Furthermore, nearly 79% have avoided making a purchase due to poor service.

Big companies also risk losing customers because of a lack of personal touch and customer service. However, many of them resort to a churn-and-burn customer strategy — acquiring as many new customers as possible, making quick profits, and replacing those who leave due to dissatisfaction.

Ethics aside, this strategy is unsuitable for a one-person company. When operating on a tight budget, customer retention becomes crucial. Econsultancy and Responsys have found it can cost five times more to acquire a new customer than retain an existing one. Additionally, there are opportunity costs associated with losing customers. A study conducted by the White House Office of Consumer Affairs states that loyal customers, on average, are worth ten times the value of their initial purchase through subsequent purchases.

Lastly, the happier your customers are, the more likely they are to refer you to others. Word-of-mouth referrals are the top way small businesses acquire new customers, according to a study by Verizon and Small Business Trends. These referrals can even be five times more effective than paid online advertisements when it comes to driving sales.

So, cherish your company's small scale and continue treating your customers as friends. They are your potential allies and are likely to reciprocate your efforts!

Concluding thoughts

A 'company of one' is a deliberately small business venture, designed to provide a sustainable income, significant independence, and a balanced work-life experience to its owner. Beginning with freelancing can pave the way for launching such a venture. The key to building a successful 'company of one' lies in harnessing a valuable skill set, targeting a specific audience, fostering beneficial relationships, embracing simplicity, showcasing your personality, utilizing technology, and delivering excellent customer service.