Unlocking the Power of Small: The Rise of the Company of One

Inc. magazine followed 5,000 of the fastest‐growing companies and discovered that more than two‐thirds were out of business, experienced massive layoffs, or sold below their market value after eight‐years. A study of 3,200 high‐growth startups found that 74 percent of those businesses failed, not because of competition or lousy business plans, but because they scaled up too quickly.

Staying small on purpose and adopting what author Paul Jarvis calls “A Company of One” mentality could be the healthiest thing you can do for your business and your life.

You don’t have to be a one‐person company to be a “Company of One.” A small business with 5 or 50 people can operate as a “Company of One.” The key to being a “Company of One” is making three fundamental shifts:

Better, not bigger

When you obsessively focus on growth, you play a dangerous game of Russian Roulette with your company ‐?while you delay profit to grow you may encounter an economic recession or disruptive new technology that could put you out of business.

A “Company of One” is more likely to weather a recession or pivot when a new technology enters the market because a “Company of One” aims to be profitable as soon as possible by building better products or services and increasing profit margins.??

A “Company of One” spends time with customers to better understand their core problem, then finds creative ways to solve it with as few input costs as possible. Lowering input costs typically means using scalable, low‐cost technologies like Shopify or finding high‐quality contractors on Fiverr and Freelance.com to build products without taking on excessive overhead.

When you focus on better, not bigger, you seek to make a profit on your 10th sale, not your 10,000th sale.

Customer retention & referrals, not mass marketing

A “Company of One” focuses more on retaining its customers than acquiring new customers with expensive marketing campaigns.??

Fast‐growing businesses that acquire customers through mass marketing efforts on Facebook, YouTube, and Google advertisements are like pickup artists who go into a bar looking for a one‐night stand. They might get someone to click their ad and buy what they offer, but the relationship probably won’t last long. A “Company of One” plays the long game and aims to build lifelong relationships with its customers, resulting in repeat sales and referrals to friends and family. A “Company of One” starts building lifelong relationships by creating education campaigns, not marketing campaigns.

A realtor with a “Company of One” mentality might give free webinars on market updates or how to make money investing in real estate without pushing anyone to hire them. Casper, a mattress company with a “Company of One” mentality, built a loyal customer base by teaching people the latest sleep science and good sleep hygiene via an online publication called “Pillow Talk,” which did not include links to their mattresses.

When you educate potential customers, you display competence and empathy – two primary ingredients of trust. When people trust you, they are willing to pay more for your product, and buy from you again. Customers who trust you become your unpaid salesforce – recommending your products through word of mouth and on social media. However, to get your unpaid salesforce in motion, you need to give them a gentle nudge (a study at Texas Tech found that while 83 percent of customers are willing to provide referrals, only 29 percent do so).??

Autonomy, not ego

Jarvis says, “Culturally, growth feeds our ego and social standing. The bigger the company you own, with more profits and more employees than the next person, the better you might feel.” But satisfying the ego comes at a cost. In the pursuit of more, you have more people to manage, more problems to think about, and less time to do what you want, when you want. The extra money you earn might allow you and your family to go on a nice vacation, but you don’t get to enjoy it because you are answering phone calls and responding to urgent emails the entire time.??

James Clear, the author of Atomic Habits and founder of a successful online business, says, “Instead of thinking, ‘What product can I create?’ or ‘What service can I offer?’ Think: ‘What type of life do I want?’ and ‘How do I want to spend my days?’ 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.”

James Clear has created two rules to ensure his business provides him with maximum autonomy: All products must require little to no management & only one‐time fee work (no retainers or ongoing consulting work). With those two rules in place, Clear created digital courses with prerecorded videos and zero live training. When asked to provide business consulting, he charged a one‐time fee to fly in, give a talk, answer questions, and leave the following day. These rules allowed Clear to pay his bills and make time for what he wanted to do most: research and write.