The Perspective of Paul Jarvis
Paul Jarvis is a former Silicon Valley tech guy turned author. Company of One is his first book, but he also writes for Inc.com, Fast Company, Huffington Post, and, previously, his newsletter, the Sunday Dispatch.
In addition to being an author, Jarvis hosts classes on how to be a successful freelancer. Through it all, he advocates for the contrarian idea that businesses don’t need growth to be profitable.
Have you ever wanted to start a business but felt like it was impossible without a big financial backer? In his best-selling book, Company of One, Paul Jarvis takes on this question and more.
Company of One explains how you can get all the successes of a large enterprise without having to grow your business. So how do you do that? You’ll have to read the book yourself or check out our key takeaways below.
StoryShot #1: Lack of Growth Defines a Company of One
Jarvis uses the first third of Company of One to define just what “company of one” means. A company of one isn’t a small business. And “company of one” isn’t another word for a freelancer.
What is the difference between a small business and a company of one? Small businesses have one main goal: to grow. Companies of one, on the other hand, purposefully remain small.
However, unlike a freelancer, companies of one don’t work to earn. Instead, freelancers make active income— the second they stop working, the money stops coming in. Meanwhile, companies of one make both active and passive income.
One person doesn’t have to run a company of one. You could start up a company of one with your partner, your closest friends, or your most brilliant colleagues. The only thing your company of one must feature is keeping the business small.
The Benefits of a Company of One
A company of one doesn’t grow larger or require constant work. But this isn’t necessarily on principle. Instead, rejecting traditional growth mechanisms can get you the following benefits:
A company of one is small and agile. That makes these microbusinesses extremely agile. As a result, they’re able to adapt to changing realities and always have a sense of purpose as they do so.
Further, as the sole proprietor of a company of one, you get complete control over the brand vision. That doesn’t only mean you get autonomy over business decisions. You also get to decide how much of your life you want to spend at work in the first place.
Remember how Jarvis mentions that companies of one are agile? Another benefit of this is less bureaucracy. For example, you don’t have to run your decisions by a board of executives or shareholders.
By their nature, larger companies are more complex than smaller ones. But for a company of one to be successful, it must remain simple. That means a simple customer base, simple product offerings, and a simple business structure.
StoryShot #2: Running a Company of One Requires the Right Mindset
Jarvis spends a lot of time talking about why every person should aspire to be a company of one. The main idea is this: running a company of one allows you to build your business around your lifestyle.
These days, most of us do the opposite. Work is the primary driver of our day-to-day schedule. So, we must often plan life events around when we’re working or the project deadlines we need to hit.
Instead, Company of One inspires us to fund our lifestyles with our passions. The book pulls this off because Jarvis reminds us why a busy life isn’t a good life. Working more productively can help reduce the time and energy it takes to earn your living.
Another part of the company of one mindset is to understand the difference between passion and purpose. You must have more than passion alone to succeed as a company of one.
You have to have a clear purpose guiding your business decisions. Part of that purpose? You must decide you want to stay small, even in the face of an opportunity to grow your company of one.
For the owner of a company of one, growth actually equals decline. Success, on the other hand, means sustaining a particular income level. And that income level is something you get to define.
Here’s how: first, you must outline the type of life you want to live. Think about what kind of home you want to live in, the type of car you want to drive, and how many vacations you want to take each year.
Next, you’ll work backward. Figure out exactly how much money you need to live your desired lifestyle. Then, you’ll build your business around this figure, and once you reach your goal, you get to take a much-deserved break.
Earning More Isn’t Always Better
So, what if you hit your income figure but want to keep working. Company of One warns you to expect some hard times ahead because more profit often equals more problems.
In other words, working more may mean you acquire more customers. But, then, you’ll need more products to satisfy them. So you’ll have to hire more workers to help you meet that demand, effectively eliminating your company-of-one status.
That type of work environment is actually the antithesis of a company of one. For this reason, Jarvis recommends saying, “enough is enough” once you hit your pre-designated income figure.
StoryShot #3: Don’t Quit Your Day Job (Yet)
By now, you should understand what a company of one is and what type of mindset you need to run one. But it isn’t time to quit your nine to five just yet. First, you need to build your side hustle.
This point may seem counterintuitive at first. After all, how are you supposed to build a whole business while you’re working?
Company of One doesn’t encourage building just any business, though. Instead, the book enables you to build a successful one. And your business won’t be successful if you need quick cash to fund your lifestyle.
Instead, build up your passion project during your free hours. Start by coming up with your product idea. Then, try to see if you can land your first few clients.
Once you have a client or two, you can finally think about quitting your day job.
A Real-Life Company of One
Company of One describes many different instances of the type of business it describes. The first example in the book is cartoonist Tom Fishburne. Fishburne built up a cartoon company of one before leaving his corporate job.
Only after winning a handful of clients did Fishburne finally leave his Vice President role. He wanted to ensure he had a steady, stable income coming in to support his family before making his company of one dream a reality.
And Fishburne is a success story. He and his wife have run their company of one, Marketoonist, since day one. Today, he reports that he makes more from Marketoonist than he did in his corporate VP role.
StoryShot #4: Passion Isn’t Enough When Choosing Your Product Idea
So, you quit your job and are on your way to growing your company of one without getting bigger. How do you get started? That’s the question the next section of Company of One addresses.
Obviously, the first thing you need is an idea for a product or service. Company of One suggests using a passion project, side hustle, or freelance gig to inspire you. The more passionate you feel about the idea, the better.
However, you should also understand the downfalls of turning a passion into a business. Studies show that the majority of people are most passionate about one of the following:
- The arts
If your passion lies in one of these areas, you have an uphill battle ahead. After all, everyone who wants to be an artist won’t necessarily make it big.
So, instead of relying solely on your passions to inform your company of one idea, you need to dig deeper. Be realistic about which of your passions people will actually pay for.
For example, say you’re really into making digital art for your Instagram. You can’t necessarily create a business out of posting your art on social media. But you may be able to come up with a business idea out of transforming your art into NFTs.
Iterate on Your Product Using Customer Feedback
Once you’ve determined your product or service idea, it’s time for launch. But wait, you may be thinking: shouldn’t you perfect your product before launching it? According to Company of One, the answer to this question is no.
Company of One advocates for launching your product in its early stages. That way, you can receive valuable feedback from your customers. This feedback can then help you hone your product, figure out the right pricing, and more.
Why should you do this? Because when you launch your product as early as possible, you can start earning money off of it immediately.
StoryShot #5: Defining Your Audience Is Key to Success
Here’s another tip to help you identify the best idea for your company of one. Start with your audience. Defining an audience will help you understand how to market your product(s) and brand your company of one.
Ideally, you want to define a niche audience. A niche market is a subgroup of a larger market. For example, there are first-time home buyers and long-time owners, each of which is a niche subgroup of the overall homeowner market.
And don’t be afraid to be specific, too. Identify your target audience’s age, interests, and shopping habits. Then, work to understand how you can reach this audience.
Once you’ve identified how to market to your niche, you should start thinking about how to retain that audience. A big goal of a company of one is to retain customers instead of having to acquire new ones, which takes a lot of effort.
When you can instead retain your customer base, you aren’t just building a customer base. You’re also building a loyal fanbase that will market your products and services for you.
Why You Want Referrals
Because companies of one focus on retention instead of acquisition, they can benefit a lot from referral marketing. Referral marketing occurs when your customers tell other people about your products or services. Those people then buy from your brand based on their friend’s referral.
Studies show that customers who come to brands via referrals are 37% more likely to keep buying from you. Referrals also contribute 18% less churn than customers you acquire by other means. Best of all, the average referral generates over 16% more revenue than traditional customers.
StoryShot #6: Grow Without Getting Bigger
By now, you may be wondering: how exactly do you grow a business that has the one goal of not growing? Company of One explains that you can scale your business without needing to hire more employees. Instead, the goal is to do business development by growing your customer base, profits, or reach.
You need to leverage what Jarvis calls scalable systems to pull this off. These systems will allow you to grow your profits while also keeping your lean company of one business model.
What is a scalable system? Glad you asked. A scalable system is a system that is flexible enough to deal with rapid changes, whether those changes come about due to customer demand or the competitive landscape.
Jarvis says you need scalable systems for a minimum of three areas of business. These three areas could include:
- Product creation
- Business connections
- Collaborative partners
When you put these scalable systems in place, your company of one can handle the ins and outs of the business. And it can do this without needing an army of employees.
Scalable Systems in Practice
Need/Want is a multi-million dollar business that started out as a company of one. The company has a staff of fewer than ten employees. Yet, it still manages to increase its revenue every year.
How does Need/Want do it? The company’s founder, Marshall Haas, deploys scalable systems to help increase its bottom line. He uses products like Shopify to easily scale Need/Want and an online-only advertising strategy to cut back on extraneous marketing expenses.
Further, this company of one outsources wherever possible. It uses a third-party manufacturer and logistics vendor. That way, the company doesn’t need to increase its employee base to turn a higher profit.
StoryShot #7: Set Your Business Apart With a Brand Personality
You’ve perfected your product idea (or close to it) and deployed some scalable systems to keep your profits growing. What now? It’s time to focus on your company of one branding.
Successful businesses aren’t just about their products or services. Customers return to popular businesses over and over again because of their unique brand personalities.
Take Starbucks as an example. Starbucks started off as a coffee company for hip young people. Today, it has grown its brand as the #1 coffee shop in the nation, and its name is almost synonymous with coffee.
You want to do the same thing for your brand. Identify what sets your company of one apart from the competition. Then, lean into that identity and use it to determine what you say and do online and in the real world.
Why Your Brand Should Be Polarizing
These days, you can’t go anywhere without hearing a polarizing debate. Whether it’s politics or vaccines, people can’t seem to agree on anything. The good news for you is that you can harness this phenomenon as free marketing.
For example, a mayonnaise company used polarization in its ads. It showcased people arguing about the value of mayo. This strategy resulted in a 14% increase in sales but a whopping 631% rise in social media attention.
As a company of one, you don’t have the staff for a big marketing campaign. So, instead of running an ad campaign, get your audience to talk about your product for you. Creating polarization around your brand or product(s) can do just that.
StoryShot #8: Retain Your Customer Base Instead of Growing It
Company of One alludes to this point many times early on. However, the book doesn’t address this idea fully until the final chapter, and for a good reason. Learning how to retain customers should be the primary goal of any successful company of one.
Why does retention matter so much for companies of one? You want to simplify business processes as much as possible. And it’s always easier to market to customers who are already familiar with your brand.
A failure to retain customers is one of the biggest problems with growth-minded companies. Enterprises put all their focus on acquiring new customers. The changes these companies must make can often alienate their existing customer base, leading to high levels of churn.
Companies of one are different. They should focus solely on retention by creating personal relationships with their customers. They should understand what customers like about the brand and keep giving them what they love.
But how do you earn your customers’ loyalty? One way is to address their pain points. In general, we differentiate between four types of pain points, but the most important ones are lack of time and too little money.
Strive to use your business to help customers save money or time. That way, they’ll feel grateful and possibly even indebted to your brand.
An additional tip from Company of One is to build trust through transparency. You increase transparency when you teach your customers what you know. This fact is one reason why Jarvis hosts classes for freelancers (his customer base) alongside his writing business.
Final Summary and Review of Company of One
Company of One by Paul Jarvis is one of the best business books out there. That’s because it challenges the traditional mindset most entrepreneurs have. That is that you must grow the size of your business in order to increase your customer base and profit margins.
Instead, this book encourages people to start up a company of one that doesn’t grow in size but does grow in profits. To run a company of one successfully, you’ve got to have the right mindset: you have to want to work to live, not live to work.
Are you tired of your nine to five and looking for career development advice? Then this is one of our favorite book recommendations for you.
Here’s a review of the key takeaways from Company of One to remind you why this is one of the best books to read in 2022:
- A Company of One Is Defined by Its Lack of Growth
- Running a Company of One Requires the Right Mindset
- Don’t Quit Your Day Job (Yet)
- Passion Isn’t Enough When Choosing Your Product Idea
- Defining Your Audience Is Key to Success
- Grow Without Getting Bigger
- Set Your Business Apart With a Brand Personality
- Retain Your Customer Base Instead of Growing It