Company of One

  • Author: Paul Jarvis
  • Full Title: Company of One
  • Tags: #Inbox #books

Highlights

  • Yet we soon learned that living in the woods on an island does something funny—it forces you to go deep within your own thoughts. (Location 60)
  • There’s not a whole lot else you can do, especially if you don’t have a television or even Netflix. And at first, exploring your own thoughts is one of the scariest things in the world. (A study at the University of Virginia by Timothy Wilson found that people would rather get electric shocks than simply be alone with their thoughts.) But then again, if you sit with your thoughts for a while, they can reveal some mind-set-changing ideas. (Location 61)
  • By decluttering my thoughts (creating an “inbox zero” for my brain, if you will), (Location 66)
  • 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? (Location 94)
  • 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. (Location 112)
  • “start small, define growth, and keep learning.” (Location 123)
  • The word “intrapreneur” points to one example of a company of one within a larger organization. It describes corporate leaders who come up with their own goals and then execute them. (Location 188)
  • the four typical traits of all companies of one: resilience, autonomy, speed, and simplicity. (Location 224)
  • Companies of one work best under constraints—because that’s where creativity and ingenuity thrive. Companies like Basecamp have a four-day workweek during the summer (no work on Fridays) because it helps them prioritize what’s important to work on and what they can let go of. (Location 338)
  • Even the latest and greatest HR software, for instance, probably doesn’t need hundreds of screens and drop-down menus. A business selling thousands of products can probably cut most of them if the bulk of their sales comes from just 5 percent of their offerings. There may be no need for thirteen company-wide initiatives if three will do. (Location 402)
  • What if we set upper limits to our goals instead? For instance, “I want to make at least $1 million this quarter, but not more than $1.4 million,” or, “We need to grow our list by 2,000 people per day, but not more than 2,200”? (Location 641)
  • But there is one way that envy can be useful: as a tool to recognize in ourselves what we truly value. For example, if I’m envious that you make more money than I do, then I need to recognize that making more money might be important to me, work toward figuring out if that’s truly the case, and then, if it is, determine how I can best make more of it. Once we learn what triggers our envy, we can focus on how to rethink or move forward. (Location 686)
  • By using stories and metaphors, high expectations, and even facial expressions, anyone can employ and gain charisma to inspire others. (Location 718)
  • In effect, hiring more people ended up not being the solution; instead, introducing more processes and structure helped fewer people accomplish more—while allowing them the autonomy to solve problems in their own way, using a common tool set. Autonomy can also be badly abused. (Location 775)
  • the qualities that lead to the leadership roles we achieve are the exact qualities that diminish once leadership roles are attained. (Location 861)
  • 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). (Location 938)
  • To start a company of one, you should first figure out the smallest version of your idea and then a way to make it happen quickly. (Location 970)
  • Engaging work comprises four key components: clearly defined assignments, tasks you excel at, performance feedback, and work autonomy. (Location 1172)
  • Curiously, up until the 1950s, the word “priority” was almost always singular in use—it wasn’t until later that the misguided belief that multitasking is a good idea took hold, along with “priorities” (plural). (Location 1239)
  • Gloria Mark, a professor in the Department of Informatics at the University of California, found that for every interruption, it takes an average of twenty-three minutes and fifteen seconds to fully get back to the task. Fewer distractions means speedier work. (Location 1253)
  • To combat this, I take several months off from interviews, calls, and meetings each year to create new products or write books without interruption. (Location 1286)
  • I don’t communicate with others—no meetings, calls, interviews, or social media—on Mondays and Fridays so I can write (words or code); I do most of my calls on Thursdays. (Location 1289)
  • 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. (Location 1326)
  • 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. (Location 1327)
  • What do you want your brand to exude? Toughness? Sophistication? Excitement? Sincerity? Luxury? Competence? (Location 1340)
  • only 4 percent of customers actually voice their dissatisfaction to a business: a whopping 91 percent of dissatisfied customers simply don’t ever return. (Location 1483)
  • Similarly, the folks at Basecamp try to answer every support request within fifteen minutes—regardless of the time of day or night. (Location 1507)
  • Understanding customers requires not just providing exceptional handling of their support requests but then gaining a bigger-picture idea about the types of questions and requests that are coming in. Even in a company of one, it’s important to recognize the general theme of each request and to manage it in a way that makes patterns and clues in the data discernible later on. (Location 1576)
  • Cindy Carson, the director of Customer Success at UserIQ, believes that the most successful customers are those who start off on the right footing, with tailored onboarding processes. (Location 1612)
  • the way to be positively assessed by others is by making promises, and then keeping them. (Location 1687)
  • 8 ■ Scalable Systems (Location 1720)
  • all their marketing efforts stem from a team of three who focus entirely on online channels, like social media, paid ads, and a newsletter (all of which can increase reach without too many extra resources to manage). (Location 1732)
  • His focus for paid offerings follows two simple rules that help him remain a company of one (Location 1754)
  • James’s first rule is that his products must take little to no management. (Location 1755)
  • His second rule is to charge a onetime fee for everything he offers; he accepts no retainers and no ongoing consulting work. (Location 1757)
  • James believes that we should first think: What type of life do I want? and How do I want to spend my days? (Location 1763)
  • Then you can work backwards from there into a business model that allows you to create scalable systems to deliver your product to your audience. (Location 1764)
  • Creation as a Scalable System (Location 1766)
  • Connection as a Scalable System (Location 1790)
  • By constantly working toward reducing one-to-one points of contact with customers and focusing instead on one-to-many relationships, a company of one can scale its connection with customers without actually scaling its business. (Location 1790)
  • And as discussed in Chapter 6, personality is still required, even with automated customer communication, in order for these systems to be effective. (Location 1799)
  • The point of scalable connecting is to make customers and potential customers feel as though they’re getting on-demand information as they need it, not being relegated to an infinite loop of unhelpful and frustrating computer-generated responses. (Location 1800)
  • The Epsilon Email Institute found that segmented automation emails have a 70.5 percent higher open rate and a 152 percent higher click-through rate than “business as usual” firehose blasts. (Location 1807)
  • In my own business, email marketing accounts for more than 93 percent of revenue each year. (Location 1811)
  • Automated emails sent to people immediately after purchase can show these customers how to best use the product they purchased or answer common customer questions, greatly reducing customer support requests. (Location 1815)
  • Automated updates and notes and even simple check-ins with customers after a set amount of time can also increase the likelihood that customers will keep using the product, as well as the likelihood that they’ll tell others about their purchase (for instance, via social media sharing buttons within the emails). (Location 1816)
  • By automating most of her onboarding process with automated emails that delivered information about her services and prices and setting up a calendar system that let people pick a date and time to speak to her (based on her own calendar’s availability), she cut down the amount of time it took her to take a lead and turn it into a paying project from between eight to sixteen hours to only one hour. (Location 1822)
  • Collaboration as a Scalable System (Location 1829)
  • Real-time messaging can turn into all-day meetings, every single day, with no set agenda. (Location 1838)
  • Samuel Hulick, founder of User Onboarding, believes that tools like Slack are “asyncronish”: they’re neither truly real-time (you sometimes have to wait indefinitely for an answer) or asynchronous (meaning no immediate response is expected). (Location 1838)
  • While the use of messaging tools can seem like a truly great advance in collaboration, too often they lead to daylong half-conversations, like a slow-drip coffee maker. (Location 1840)
  • Elsewhere in this chapter, I advise scaling up certain aspects of your business, but collaboration is the one area where companies of one should scale down—from (Location 1856)
  • 9 ■ Teach Everything You Know (Location 1863)
  • 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. (Location 1891)
  • But great salespeople—from car dealers to real estate agents to B2B sellers—know sales increase when you honestly evaluate what someone needs and then teach them the value of what you’re selling. (If your product doesn’t fit their needs, you need to let them know that as well.) Sharing content and information is an effective way to begin a sales process because it helps a potential customer see what they need, why they need it, and then how your products can help solve their problem. (Location 1896)
  • 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. (Location 1904)
  • The first is that (Location 1905)
  • 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. (Location 1905)
  • The second benefit of out-teaching your competition is the chance to show an audience the benefits of what you’re selling. For example, if you’re selling a plug-in electric vehicle, teaching people the benefits of this type of vehicle—how much they’ll save by not buying gas each year, why and how it’s safer than a gas vehicle, the vehicle’s reduced environmental impact, and so on—shows them all the reasons they’d want to buy from you, without overtly selling to them. (Location 1908)
  • 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. (Location 1913)
  • The final reason teaching works for a company of one is that, except for certain proprietary information—like your unexecuted ideas, business strategies, or patentable technologies—most ideas or processes don’t need to be kept under lock and key. Being transparent in almost all areas, while running your company aboveboard, can only help build trust with your customers. (Location 1915)
  • Ideas Alone Are Worthless (Location 1918)
  • The Downside of Sharing Is . . . Nothing (Location 1940)
  • 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. (Location 1950)
  • 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. (Location 1958)
  • When it comes to selling and marketing, consumers are easily tempted to go with a larger company, which seems “safer” simply because it has more people and infrastructure to support it. Authority is the countermeasure to this instinct, as you can assuage any concerns from customers by making them feel that you are an authority on what you’re selling. (Location 1984)
  • 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 (Location 2017)
  • Part III Maintain (Location 2021)
  • 10 ■ Properly Utilizing Trust and Scale (Location 2022)
  • Trust, transparency, and communication are still absolutely required, but your relationships with customers can be scaled in a way that doesn’t require scaling your business scale at the same time. (Location 2030)
  • 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. (Location 2045)
  • Urban has found that 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”). (Location 2061)
  • In my own business, I doubled the amount of sharing for one of my products by automatically sending an email a week after purchase asking customers, if pleased with what they purchased, to share their satisfaction with others—using links with prewritten content provided. (Location 2085)
  • Where a service-based business can really capitalize on making word of mouth happen is by simply following up. Talking to clients a few weeks after a project is finished can yield two massive benefits. The first is being able to collect a testimonial or success story based on the real results the client is seeing. (Location 2106)
  • Second, by creating a schedule for following up with clients, you can then ask them (assuming the project went well) if they know of other businesses that could benefit from your services the way they have—or if they’re interested in arranging another project with you. (Location 2110)
  • For example, a week after a customer buys your product, you can generate an email asking them how much they’re enjoying what they purchased from you on a scale of 1 to 10. Then a second email, which you would send only to people who rated their enjoyment above a 7, could pitch an incentive program, with a double-sided incentive and prewritten text to share on customers’ social media feeds or in their own newsletters. (Location 2114)
  • 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. (Location 2149)
  • By making customer happiness your top priority over new customer acquisition and then incentivizing customers to share the word about your business, less of your money needs to be spent on promotion. (Location 2158)

11 ■ Launching and Iterating in Tiny Steps

  • 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. In short, his profits rose because the increased volume cut his costs. (Location 2214)
  • 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)
  • 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 (Location 2234)
  • Decisions should be made with a focus on realized profit, not based on the expectation that profit may happen. (Location 2235)
  • 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)
  • 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)
  • 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. (Location 2263)
  • When you launch a first version of a product, you’re guessing at a lot of things—how it’s positioned in its market, how easy or difficult it will be to reach your target audience and get its attention, and how willing people will be to buy it and at what price. (Location 2270)
  • There are three elements to the psychology of simple, according to Harvard professor George Whitesides: predictability, accessibility, and serving as a building block. (Location 2281)
  • Being predictable means that simple products are easy to instantly understand. A product that solves a single problem, like a Casper mattress helping you get a good night’s sleep, is simple. (Location 2282)
  • Being accessible means being honest: Casper makes no over-the-top claims, but backs its product with solid research and overwhelmingly positive reviews from over 400,000 customers. (Location 2284)
  • Finally, to serve as a building block is to build on an existing and understood concept. Casper didn’t invent a soft and rectangular piece of foam to sleep on and call it a mattress. They simply built off an existing industry, an existing product, and made it better. (Location 2285)
  • Halley Gray, founder of Evolve + Succeed, has found that most people who start a new business by themselves make the mistake of believing the products should always come first. Instead of developing a product, which can take a lot of time (and sometimes cash) to develop, new founders can start almost immediately by offering their product idea as a service first. (Location 2359)
  • Launching isn’t a onetime, singular event, but a continual process of launch, measure, adjust, repeat. (Location 2375)
  • 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)

12 ■ The Hidden Value of Relationships

  • Chris Brogan believes that real connections are built when companies share a simple message, repeatedly, through their actions. (Location 2524)
  • This message shows that, 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)
  • Even a company of one whose true north isn’t growth requires three types of capital. The first is financial capital, which we learned in Chapter 11 should be as small as possible to start so that profit—achieving your MVPr—happens quickly. (Location 2539)
  • The second is human capital, which is the value that you (or your small team) bring to the business or group: this (Location 2540)
  • 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)
  • 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)

13 ■ Starting a Company of One—My Story

  • how to build something that’s too small and resilient to fail. (Location 2684)
  • 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)
  • Let’s say I had to start my business tomorrow from scratch, with no existing clients or following. How would I build an audience? How would I attract customers? This is how lots of people start businesses every day: knowing how to do something well (their craft), but without an existing group of people eager to work with them. Where do you begin? (Location 2743)
  • With my skill set, I’d start by listening to people who are looking to hire web designers or have already hired web designers, since that’s the most marketable skill I’ve got. How are these potential clients conducting their search for a designer? (Location 2746)
  • Then I’d offer to help with their questions. Is there anything in particular they want to know? Do they want a second set of eyes to look at something? Do they want to brainstorm on what to do next? Do they want a second opinion? Is there anything they want to know about the industry? (Location 2750)
  • would add small bits of helpful advice without offering my own services or charging them. (Location 2752)
  • Long before I’d start selling anyone anything, I’d be building relationships with the people I’ve helped in some way. (Location 2762)
  • For example, Creative Class (my own first online course) started out as an idea for thirty lessons, which would have taken me four to six months to create. I also wanted to develop course software to run it (another four to six months of work). I resisted the urge to spend four to six months writing lessons, however, and instead started with seven lessons and existing software; this way I could launch in a month instead of a year. The quick launch enabled me to see what worked and what didn’t with an actual audience, and then I could adjust, iterate, and improve. After starting with seven lessons, I added seven more, based on the feedback I received from students. With the second round of seven lessons, I was able to get my course out quickly, have it generate money, and then adjust it based on real feedback from paying customers. By the sixth version of the course, it was making enough money to sustain me. (Location 2797)
  • Small businesses can be taken advantage of, ripped off, or screwed out of money they’re owed—sometimes by larger businesses, but sometimes by businesses the same size. This is why having legal systems in place right from the start is important. (Location 2822)
  • business entity is set up properly for the country and region you’re operating from, and second, that your business is removed by one layer from you personally. In other words, your business should be its own legal entity—a corporation in most countries or an LLC in the United States. (Location 2824)
  • That way, should anything go wrong in your business, it is your business that is liable, not you personally. All money should go into your business directly, not straight to you, and then you should be paid out, by salary or dividends. (Location 2826)
  • Next, after you’ve separated your company of one from yourself personally, you need to prevent your company from being taken advantage of. With service-based businesses, this means having contracts between your business and your clients. (Location 2830)
  • For a product-based business, this means having users agree to your terms of service before they pay you for what you’re selling. (Location 2833)
  • The reason for having a business lawyer—and one who’s on contract, not an employee—is not so that you can sue everyone, but so that lawsuits rarely happen. (Location 2834)
  • To find the best accountant for your company of one, look for a firm or individual who has knowledge of your type of work and familiarity with businesses of your size. (Location 2843)
  • Since revenue from my work can sometimes be inconsistent, I’ve always figured my base salary as the average I’ve made (Location 2857)
  • in profit (not revenue) for the last twelve months, minus 25 to 30 percent (to set aside for taxes). (Location 2858)
  • 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)
  • the first millennium has passed, but that success is about finding a way to sustain a business as long as it needs to be sustained. (Location 2949)
  • 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. That’s it—one rule. The rest is entirely up to you. But if you ever stop questioning the need for growth, you run the risk that the beast of growth will devour you and your business whole. (Location 3016)