Author: Paul Jarvis
Company of One: Why Staying Small Is the Next Big Thing for Business Paul Jarvis 2019
Onsen Keiunkan Hotel Strategy (Company of One)
Company of One: The average lifespan of S&P 500 businesses is 15 years, while the Nishiyama Onsen Keiunkan in Japan is over 1,300. It is a single building with 35 rooms, serves simple seasonal food from local farmers and fishermen, and has six natural hot springs nearby with pure alkaline water, open for bathing 24 hours 7 days a week. There is no other entertainment and Wi-Fi, but the hotel has been a popular place (including for emperors, politicians, samurai, generals) for several centuries. During the existence of the hotel, the owners have only slightly rebuilt the rooms. They did not expand into a hotel chain and attract investors, but their offspring is still successfully operating.
How the hotel and other small long-lived companies manage to do this, Paul Jarvis, who traded the “best city on Earth” Vancouver for the “city at the end of the world” Tofino, explains in his book. A new backwoods life on an island (after a metropolis with annoying lights, sounds, and endless running around) gave him the opportunity to surf every morning and realize that over the years he deliberately did not expand his company.
When Paul posted on his blog in 2016 that he was not interested in the exponential growth of his business, people began to write to him that they also opposed the traditional expansion and received significant benefits from it. Their stories, as well as the results of various studies and personal experiences, web designer Paul Jarvis, described in the book “The One Man Company”. According to the author, his approach will benefit your wallet, and job satisfaction and allow small and large businesses to thrive even in times of crisis.
Durability, autonomy, speed, simplicity
A company of one is a business run by one or more people (a group of founders) who doubt the wisdom of growth and resist it if there is a more rational way. The principles of a company of one can be applied by employees of large companies (corporations).
The perfect example of a company of one is Marketon, which consists of two people – Tom Fishburne and his wife. Sometimes several more freelancers work on separate projects. Tom used to be the VP of Marketing for a large food company, drawing for customers in the evenings and weekends. Seven years after he retired from a successful career, Fishburne was earning three times as much as an artist than as a manager. The growth of the business is contrary to Tom’s career and personal values: if he expands his company, he will have less time for his family and painting, because he will be busy managing a team of artists.Company of One
Four features of a typical company of one: resilience, autonomy, speed, simplicity of solutions.
The resilience of a person determines his success in business more than the level of education, training, and experience. Resilience can be learned by developing acceptance of reality, motivation by meaning, and the ability to adapt to a new situation.
Acceptance of reality implies a practical view of what is happening and the corresponding actions. For example, the author of a book, even when the neighbor turns on the deafening electric saw, closes the windows, turns on the music, and returns to work on the project.
Motivation by meaning does not mean a purely monetary goal but working for something greater. To enjoy work even if there are problems. For example, the day you launch a new product can be stressful, but it’s easier to get over if your work brings value to customers.
The ability to adapt or solve problems creatively is only possible for individuals, despite the widespread automation and robotization of production processes. When the next economic bubble burst, Paul’s web design orders increased because he did quality work, but cheaper than agencies (however, he earned more than a full-time employee of the agency). When the agencies were overwhelmed, they shared orders with him.
Autonomy. To gain more control over your life, you need to hone your skills. In the process of developing them, you will acquire clients who will listen to your opinion and will be able to choose projects to work on. In addition to mastering the basic skills, you also need to become an expert in sales, marketing, and project management and know everything about customer retention.
Speed allows you to find effective methods for solving a problem: under the pressure of restrictions, you work better and more creatively. For example, a small company, Basecamp, works only four days a week, prioritizing what really matters.
The simplicity of solutions. Think 10 times before adding a new level of difficulty. Many people think that in order to open your own business, you will need an office, a website, business cards, and so on. In fact, for most freelancers or startups, it is enough to find one paying client and build a relationship with him, then do the same with the second and third. And adding new items and processes (sales funnel, automation, etc.) is worth it only when they are needed.
Disadvantages and advantages of a corporation and a company of one
A study by the Startup Genome Project found that 74% of tech startups (3,200 companies were analyzed) failed because they expanded too quickly. They subsequently had to either lay off employees en masse, close the company, or sell it for a penny. Even corporations are not immune from such risks. For example, Starbucks closed 900 new locations after adding sandwiches, fancy drinks, and CDs because it weakened its brand. As a result, the network returned to where it started – to coffee. Takeaway: Think “What can I do to make my business better” rather than “What can I do to make my business bigger.”
In 2015, more than 38,000 companies without employees were earning seven figures annually, according to the US Census Bureau, an increase of 6% compared to previous data. This shows that it is now easier to work for yourself, outsourcing some tasks from time to time. And since you’re your own boss, you can’t be fired. If you create a quality product that is in demand, working for yourself has only one significant limitation – a reasonable ceiling that you set yourself, such as “I want to make no more than $1.4 million this quarter” (instead of “I want to make at least $1 million this quarter”). “).
In 1996, when most airlines were failing, more than 100 cities offered cooperation to regional carrier Southwest Airlines. But the company began to serve only four new points, refusing the rest. The growth safety threshold set by the company’s leaders has helped them thrive in difficult times.Company of One
Goals without limits create business owners’ overwork and other serious problems. Therefore, do not envy Steve Jobs, Elon Musk, or Oprah – be interested in the advice of successful people, but do not consider their activities as an example for your own success. Better figure out what exactly you envy in order to understand how to achieve it. Mudita (a word from the ancient Indo-Aryan language Pali) is also useful – the ability to rejoice in the achievements of other people. And work aimed at improvement can benefit and influence society without world domination.
Who is “one”?
Contrary to popular belief, the leader of a company does not have to be a charismatic extrovert: the first quality can be learned by developing the skills listed below, and the second is completely redundant. Introverted leaders can also be very successful: they can listen carefully, work long hours without distraction, and are able to manage a team of people who can do the same.
A classic example of an introverted leader is Facebook CEO Mark Zuckerberg.Company of One
The leader of a company of one, in order to succeed, must first all:
• be persistent and determined (according to the characteristics of a typical company of one). Much in business is based on guesswork, so it is important to be able to recover and inspire the team after the defeats that are sure to come. You should also break big problems into small realistic tasks in order to solve them faster and with less stress;
• understand psychology and communicate effectively. You need to know how people think and make decisions. What motivates them to buy the product you created? What makes them doubt? What do they value in life? What benefit does your product bring to them? Why does your business experience customer turnover? Understanding these factors makes you a good trader, marketer, and leader. At the same time, the better you formulate your thoughts, the clearer your orders will be;
• be able to concentrate. The leader of a company of one must forego that which will not benefit his business or team (meetings, etc.) in order to concentrate on more profitable opportunities. Learn to quickly evaluate options and decide which ones deserve your attention and which don’t. Keep a balance: working for yourself day after day and spinning like a squirrel in a wheel are not the same thing. To increase your productivity, work better and faster when you feel more energized. Working late does not provide financial bonuses and self-confidence. As psychologist Wayne Oates has found, workaholics have a lot more stress than non-workaholics, serious work-life conflict, and lousy health.
How to start a business of a company of one
Release the first version of the product as soon as possible
Ugmonk founder Jeff Sheldon worked for a Vermont design agency. At that time, he could not find clothes in stores that matched his minimalist tastes. He created the overall concept and four T-shirt designs, borrowed $2,000 from his father, and made the clothes with the help of American factories (he chose them based on quality of work and shared values). Starting with a batch of 200 T-shirts in four designs, Jeff quickly made a profit and paid off the loan. After the first three batches of clothes sold out, he purchased additional equipment. For two years, Jeff worked nights and weekends for Ugmonk (designing clothes and selling them through websites, planning logistics, packing orders), and lived on the salary of an in-house designer. He invested the profit back into the company until he could pay himself and the people working with him. Only when his apartment was littered with boxes did he move them to a warehouse and set up an order processing and issuance point. While Ugmonk was profitable from the start, Jeff slowly expanded production. He still builds personal relationships with clients and does not need a lot of staff and resources.Company of One
Unlike large companies that allow themselves to spend money in the hope that the investment will pay off sometime in the future, a company with one solution, they rely on a real minimum stable profit (MSE) – a number in which the business is in the black. The smaller it is, the faster you will reach it. A business can become the main job if at least one person has enough income. So it’s important to speed up the pace, target only the core features, cut costs, and test if your business model works on a small scale.
A company of one starts small (one person, no office) and only allows spending after it makes a profit. Growth is slow and gradual: small profits lead to small spending, which gradually increases revenues and then slightly increases expenses, etc. Over time, the owner can choose: grow, stay the same, rest more, scale systems – we have all these opportunities because our goal does not involve profit growth; we just want to earn more than we spend.
According to entrepreneur and writer Dan Norris, you won’t know how well your product solves a problem until people start using it. Therefore, release a functional version of the product as soon as possible, and improve it after.
Groupon founder Andrew Mason got his start by manually typing current stocks and sending out a PDF document to his site’s subscribers via Apple Mail.Company of One
Before the launch of the first version of a product, many questions arise: how to position it in the market, how easy or difficult it is to reach the target audience and attract attention, whether people will want to buy, and, if so, at what price. As soon as you start the “probe”, the data will appear. Go directly to the first customers who use your product for advice on how to improve. Analyze them to make adjustments. Quality results can only be achieved through iterations and restarts. If they stop, the company will die. The process should continue as new information is received from customers, other businesses in your niche, and employees (for example, requests and suggestions from the technical support team or team).
Blockbuster’s outdated retail stores led it into high spending and debt, and then bankruptcy. It failed to keep pace with market changes and as a result, it gave way to the progressive Netflix.Company of One
The new product should be simple. If it is complex, you will have to spend a lot of time creating it and explaining what it is and what it is for.
According to Harvard University professor George Whitesides, simplicity has three elements: predictability, honesty, and easy maintenance.
Predictability means that the product is easy to understand.
Casper mattresses, which help you sleep well, exist in only one version.Company of One
Honesty relies on scientific research or positive reviews.
Casper has over 400,000 customers reporting improved sleep after purchasing a mattress.Company of One
Service should be based on a simple concept.
Casper communicates through all channels (social media, blogs and advertising) that her mattress is a means to achieve good sleep in young people who are ready to update their sagging mattresses, but do not want to go shopping and communicate with sellers: they are more comfortable buying online, with a guarantee that if you don’t like it, you can return it (after 100 nights of sleep).Company of One
Create a business with no money or use a public fundraiser, a loan, your own savings
Ideally, a business should be started only when people demand a particular product/service and are willing to pay for it/her. Some entrepreneurs believe that every decision—whether raising money, expanding the business, or promoting—should be driven by the best interests of the customer. Sometimes it takes almost no money to create a successful business.
To launch Unsplash’s royalty-free stock photos, Crew bought a Tumblr template for just $19, uploaded 10 high-resolution pictures taken by a local photographer, and released the first simplified version three hours later. A few years later, their photo bank began to replenish with a billion photos a month.Company of One
Finding investors who share your vision and are willing to invest in your idea is difficult. In addition, many venture capitalists consider a $0.5–1 million business too small to invest in. Therefore, a company of one is more suitable for crowdfunding, which sends an idea into the hands of potential customers. If they support it, they will spare no money for pre-order. If they don’t like the idea, you will only spend time planning a fundraising campaign (marketing and possibly prototypes), not months or years developing a product. However, Yale University management professor Olav Sorenson points out that crowdfunding is more suitable for consumer products than for business products (the latter are much less likely to succeed).
Ugmonk founder Jeff Sheldon, who designed the new Gather stationery organizer, raised more than $430,000 on Kickstarter for its production, exceeding the goal by 2394%.
And BetterBack CEO Katherine Krug turned down an offer from investors and raised more than $3 million in public money for a device that helps with lower back problems after sitting at a desk for long periods.
BetterBack operates without an office, with a small team dispersed around the world, and Katherine herself leads the work from different countries every quarter.Company of One
Persevere or Retreat
Most successful company founders have stepped back a few times. This is what led them to success after failure.
Sony founder Akio Morita first designed a rice cooker that burned rice (an idea that should have been abandoned).Company of One
When should you persevere, and when should you admit defeat after one or more product launches? Scott Belsky, the co-founder of the online creative platform Behance, believes that if the only reason you persist is to regret the effort, time, and emotions invested in the project, then the idea should be abandoned. Chances are you’ve overestimated the plan because it’s yours (called the ownership effect). If, after what you’ve learned, you still think the idea is profitable and worth the effort, go ahead.
The History of the Paul Jarvis Company
In the mid-1990s, Paul Jarvis studied programming and artificial intelligence at the University of Toronto, but after completing his homework, he turned to create web design pages. One of the sites he created, a dictionary of slang (words not included in “real” dictionaries), attracted the attention of publications and design agencies interested in the Internet. As a result, he dropped out and began to create websites in the agency.
As it turned out, the amount of work for the agency was more important than the quality of the relationship. It could not keep customers and make more than one order for them. So Paul started looking elsewhere. But the day after he was fired, when he was about to go to the library to figure out how to write a resume (he had never done this before, and there was little information on the Internet at that time), the phone rang. The clients of the agency where he left found out that he no longer worked there and wanted to work with him wherever he was. So instead of learning how to write a resume, he started figuring out how to start his own company. Since then, he has been working for himself for almost 20 years. Paul made a lot of mistakes, so he hopes to save readers from the pitfalls and financial losses that he encountered.
He warns that self-employment is not for everyone. After all, you will not have an HR department dealing with salaries and insurance payments; an accounting department that takes over the receipts and harasses those who owe you money; sales and marketing teams to win new deals for you. In addition to the main occupation that brings money, you will have to perform all these tasks yourself. And they, according to the owners of one company, take up about half of their working time.
To work for yourself, you need an equal amount of ego (“I know I can do better”) and a goal that will inspire you not to give up in difficult times. So, the desire to get rich quickly or become famous does not motivate for a long time, because neither one nor the other can be achieved quickly. Paul was motivated by freedom of choice, although it took him a long time to achieve it: “I like that I can consciously earn less money by turning down projects or clients that I don’t like, go with my wife on a three-month trip through the American desert and work on Saturdays, only if I want.
If you are ready to start a company from scratch, Paul recommends that you first (preferably while you work for a large company) contact people who are looking for or have already found people in your specialty. For example, web designers. Ask these people the following questions: how do they search for web designers and where? What questions do they have about the process? If they’ve had bad experiences with web designers, why not? What would they like to know before taking on the project? Then answer their questions and ask if there is anything specific they want to know about the industry.
For a free mini-consultation or discussion of a project plan, an e-mail, a phone call, or Skype is enough. Start with one person with whom you can share your knowledge, then consult with a second, third, and so on until you notice clear trends in what problems they have and what they don’t understand. This way you will know what your future audience needs, what difficulties they face, and how to effectively communicate with them to solve them.
You can then blog about what you’ve learned, write a book about common customer problems and solutions, or offer services based on what you’ve learned. Most likely, the people you helped will help you. Paul, when he was drafting a project plan for a company, was going to be hired every time to make it happen. Due to the fact that at first Paul helped others for free and in small quantities, later he began to work for money in large volumes.
In addition, you can release something without investment (it only takes time), and then you don’t have to guess about the market, product or potential customers.
The Creative Class author’s online course, according to his idea, was originally supposed to contain 30 lessons, which would take him about a year to prepare. But Paul started with seven classes and the software he already had, and released his first free course a month after he started working on it. Taking into account feedback from users, he added seven more lessons to the second course and then adjusted it based on feedback from already paying customers. The sixth version of the course brought him enough money to live comfortably on them.Company of One
Starting small and building up as needed, consider a few more factors:
• Because the path to SMEs can take several years, many companies start out as side projects. Try to cut costs (Paul, for example, has opened a business, and first lived with his parents) and correlate them with estimated income. If you offer a service for $1,000 and your monthly expenses are $2,000, then you need a minimum of three clients per month to make a profit. Will you manage to find three clients, “process” them, and complete their projects?
• Get a lawyer to legitimize your business and separate it from yourself so that if problems arise, the business is responsible, not you. It must be a separate legal entity, like a limited liability company. To avoid being taken advantage of, enter into a contract (agreement) with customers: users must agree to your terms before they pay for the product.
• Find a freelance accountant who understands the specifics of your job and the size of your business. A good accountant should check all tax returns and save you more money than he earns. Paul talks to his accountant every few months when he’s about to add a new product, enter into a partnership, make a major expense, or whenever he receives letters from the government in an unreadable language.
• Pay yourself a salary according to the formula: average monthly income during the year minus taxes. Try to save money for 3-6 months in case of a decrease in the number of orders, unforeseen circumstances, or holidays.
• Invest in index funds to earn passive income. Paul uses an automated system to transfer money from a bank account to an investment account on a monthly basis.
• Get health insurance (for long-term care) and life insurance. To save on insurance, you can join professional associations, chambers of commerce, or business groups.
• Consider the lifestyle you intend to lead. Once you have a steady income covering expenses, savings, and investments, you can earn either more or the same amount, but spend more time with your family, traveling, or experimenting with new business ideas. After that, think over the business model of your company alone.
How to increase profit without expansion
Raise your prices. This will limit the influx of customers and give you the opportunity to work in a relaxed mode.
The Queen of Snow Globes founder makes custom-made glass snow globes for clients including Quentin Tarantino, Channing Tatum and the Netflix office. When the demand for unique pieces became overwhelming, Lee Andrews raised prices until demand was reduced enough for her to fill orders.Company of One
Reduce costs. You can always find something to save on – try to get by with minimal funds for as long as possible.
When Steve Hickson was fired from his architecture firm, he went into self-employment as a project manager in the garage where the family’s only computer stood with a sticker on the monitor that says “Excess Costs = Death.” Following this philosophy, he used freelance architects, engineers, and appraisers only when they were needed.Company of One
Work “almost on demand”. Create a system where production does not exceed demand. At the same time, take care of ethical standards, fair wages, and recycling.
Girlfriend Collective, founded by Ellie and Kuang Ding, sews tops and leggings from recycled plastic bottles in Taiwan without hoarding products: their customers are ready to wait for the order to be made. The owners of the firm pay employees 125% more than the minimum wage, provide free lunches, take breaks for exercise, and conduct six-monthly medical examinations. Their environmental practices exceed government standards.Company of One
Use scalable systems. Let the management structure remain small, and production and delivery, if necessary, work in large volumes.
Need/Want, which sells products ranging from notebooks to bedding, generates nearly $10 million in annual revenue with 10 employees. The company uses ready-made software to manage its online store Shopify, which allows you to process up to a million orders per day. All of its marketing relies on a three-person team dedicated to all-online channels—social media, paid advertising, and mailing lists. The company trusts production to a factory that can fulfill from a few pieces to tens of thousands of orders a day, and deliveries to a reliable partner. In addition to the marketing and founders of the company, Need/Want has a director of operations, four employees (two of them part-time), a financial director and a developer. When a company needs help, it hires freelancers, contractors, or outsources functions. Need/Want is located in St. Louis, where it is much cheaper to rent an office than in the “hotbeds” of start-ups – San Francisco or New York. To reach more potential customers, the company relies on one-to-many relationships: A/B testing.Company of One
Segment your email subscribers. Sending an email to 50,000 contacts takes as much effort as sending an email to one person. But it is important to filter the target audience with tools like MailChimp: they allow you to send emails with a product presentation only to those who have not yet bought it, information about sales in the store – to those who live nearby and offers for additional or cross-border sales – to those who have already purchased relevant products. According to the Epsilon Email Institute, segmented automated email open rates and click-through rates (CTRs) are 70.5% and 152% higher, respectively, than traditional email methods.
Reduce request processing time. With email marketing, you can teach paying customers how to get the most out of a purchased product without talking to each of them, or answering the most common questions, reducing the need for technical support. This increases the likelihood that the product will continue to be used and that customers will tell other people about it (via the “share” button on social networks offered in the newsletter).
Designer and Paul Jarvis Creative Class student, using an email newsletter with information about services and prices and a calendar where you can choose the day and time to communicate with her personally, reduced the processing time for inquiries of potential customers by several hours.Company of One
Communicate with colleagues only at clearly designated times. As telecommuting and flexible working become more common, corporate messaging tools such as Slack, the intranet, and free VOIP calling are gaining popularity. However, it’s better to replace always-on/online collaboration with sluggish and inefficient messaging with clear-cut, timed communication to work together on big tasks.
During a hackathon—a combination of exploratory programming and a marathon—developers, designers, and project managers work on specific tasks in small teams for hours or days. Hackathons are about purposeful collaboration, not “availability 24 hours a day, 7 days a week, just in case.” At the end, each team presents the results of their work to the others, and after that everyone can return to their usual work. Internal hackathons with employees can result in successful innovations like the Facebook “like” button.Company of One
How do companies of one build relationships with people
Treat each client as if they are one and only. Do your best to keep him satisfied and successful. The success of your customers leads to the success of your business: a financially capable buyer will continue to do business with you and increase your profits.
During a call with a client, a RackSpace (cloud hosting provider) call center employee overheard someone in the client’s office mention that he was hungry. She put the man on standby, ordered a pizza to the address on file, and resumed the conversation to help solve the customer’s problem. After 20 minutes, she heard a knock on the phone on the door, asked the client to open it and said: “This is your pizza.” A pleasant surprise brought the company not only a satisfied and well-fed client, but also fame – this story was shared online thousands of times.Company of One
To help customers, you need not only a quality product but also simple human care.
When the roads in Pennsylvania were covered with snow, the daughter of an elderly man cut off from the world, who was not in the city, began to call the stores in the area for someone to deliver groceries to her father: his supplies were not enough to ride out the storm. None of the stores delivered home deliveries, but a Trader Joes employee said that, given the emergency, they would bring her father everything she needed, and even extra supplies with a limited amount of salt, free of charge. He wished the girl good holidays, and half an hour later her father received the order.Company of One
It is stories like these that benefit businesses. If your customers feel that you care about them, they will tell others about you. Compared to the giants of the market, it is easier for a small business to treat customers as people, not numbers. This is their unique advantage.
On the other hand, service automation (such as the “press 1, then 2, then 3 to ask the operator” call switching system) is causing dissatisfaction.
According to McKinsey research, 70% of the shopping experience is based on the customer’s feelings about how they are being treated.Company of One
Spot trends: If you think support tickets are about the same topic, run a little user training on that topic. If the same requests come in, again and again, come up with a solution to the problem.
Make friends with clients. If you constantly push the product, people will instinctively avoid you and stop responding to your emails and calls. But if you educate, inform and try to improve the lives of customers through your platform, they will reciprocate when you offer them your product (just do not use the phrase “our audience” in relation to your community – this can set people against you because they are buying also other products from other companies).
Best-selling author and Owner Media CEO Chris Brogan sends and interacts with his email subscribers with helpful weekly articles, but very rarely offers his own products.Company of One
Large corporations are not made for personal responses to letters, so many of them acquire small artisanal businesses in an attempt to act as small businesses. Companies of one may know their customers by name, need,s and motivation. This greatly reduces the likelihood of customers leaving them and reassures them that a modest scale may be the best option.
Accumulate social capital. Relationships are one type of currency. Cashing in social capital means asking people to do something that will benefit you (buy your product or share what you wrote with others). But before you do this, you need to invest and accumulate a substantial amount in your account – help the maximum number of people from your audience or share useful information with them. When a single company finds out what the consumer wants besides the product or service: knowledge, training, or help, social capital grows and long-term relationships begin.
Replace “What can I sell you?” to “How can I help you?”. Ask yourself, “What can I do to keep my clients happy?”
By building relationships through social capital, you can increase sales by a third. Sam Milbrath of HootSuite put forward the idea that communication with the audience should be divided into three parts: one-third of the time to engage in content, another to share it with the audience, and a third to communicate with its representatives individually.
By not taking into account the interests of the core group of people that your business relies on, you run the risk of convincing them that you are not interested in them, receiving dissatisfaction on the Internet, and other serious consequences.
Nivea’s ‘White Means Clean’ ad has experienced backlash from customers who found it racist.Company of One
Jim Doherty, a lecturer at the MIT Sloan School of Management, has found that there are a few things that make customers emotionally connected and loyal to your business. Firstly, the consumer must like your business, so focus on individuality, friendliness, and usefulness. Second, he must admire your work, the offer, and the behavior of the company: communicate with customers after the purchase, segment your mailing list subscribers, constantly improve offers, support charities, and be inspiring outside of work. Third, even if people don’t buy anything from you for a long time, keep the relationship going. Many businesses go under because when times get tough, they can’t find time for customers, when they may be contemplating their next purchase or actively recommending your company to others.
Stimulate word of mouth. It builds trust through a third party: most consumers are more likely to trust recommendations from relatives or friends than advertising. In order for people to tell their friends about your business, ensure not only the quality of the product but also a high level of service. Provide existing customers with small discounts, exclusive gifts (like unbranded designer T-shirts or Freddy chimpanzee figurines that MailChimp sends to loyal customers), special offers, access to premium features, or two-way rewards that benefit both the referrer and the new one. to the buyer.
Basecamp spent about $1 million on online advertising. Now, according to Jason Fried, co-founder of the company and author of the bestselling book Rework: Business Without Prejudice, he prefers to reward satisfied customers with bonuses for bringing new ones. It’s much cheaper than paying Facebook and Google.Company of One
A week after customers purchase your product, you can ask them in a segmented email how much they liked it on a scale of 1 to 10, and offer a two-way incentive for a recommendation and ready-made text for publication on their pages on social networks to those who rated it above 7 points or your own mailing list.
Service companies (consultants, freelancers, client-oriented agencies) to effectively use the “sundress” should communicate with clients a few weeks or months after the completion of the project (depending on how long it takes for their service to bring the client a result). This way they will be able to get the opinion of customers, their impressions, or success stories that can be used in marketing. If the project went well, ask if the clients know of other companies you could benefit from, or if they would be interested in doing another project with you.
• Share ideas and educate clients on everything you know. People are passionate and open when they learn something useful. Assess what the person needs and honestly explain how the product or service will help meet their needs or why he/she does not meet their needs. Tell them how to get the most out of the product and even use it in new ways. If the customer does not learn this from you, they may buy a similar product from a competitor. So if you sell sports tops, share your running technique by selling suitcases, give travel tips.
Informing customers brings the following positive results:
• You position yourself as an expert. A study by neuroscientist Greg Burns found that the decision-making area of the brain slows down or stops when we get the right advice from experts: consumers value it more than advice from CEOs and celebrities. That is, if you educate people on legal issues through a weekly email newsletter, chances are you will be the first person they turn to when they need a specialist.
• You explain how your product is useful, and give the audience the opportunity to decide for themselves whether it suits them or not. For example, if you are selling an electric car, describe its benefits (how much you can save on gas per year, why it is safer than traditional cars, etc.) and the reasons why you should buy it yourself without resorting to open sales methods.
• You can count on new customers to become repeat customers and tell others about their positive experiences if you teach them how to be successful with your product or service.
• You build customer confidence by sharing ideas and processes with them (excluding unrealized business strategies and proprietary technologies). The audience can help refine the idea by giving their opinion on it before you invest resources. Without execution, an idea is still useless.
Many companies are based on an old but masterfully implemented idea: the same Facebook is just an improved MySpace.Company of One
It used to be considered this way: if you tell your customers everything you know, they will go with this knowledge to competitors. But, according to an MIT study, the exact opposite is happening.
Previously, if a person wanted to buy a mattress, they would lay down on several of them in a retail store to choose the most comfortable one. But because mattress maker Casper only sells mattresses online, it uses two mailing lists, Van Winkle and Blanket Talk, that are not overloaded with ads and links to buy, but teach the science of sleep. Coupled with a 100-night money-back policy (much more than the competition) Casper expands its market without becoming a retail store or resorting to wholesale.Company of One
When a person is interested in what you teach him, he instinctively trusts you. If you regularly deliver useful, relevant, and timely content to your audience through your email newsletter, speaker events, website, etc., they will contact you for more information (for which you can charge). Informing does not require a lot of time, resources, or even expenses – just share what you know with those who are ready to listen.
Basecamp’s goal is to outperform competitors in the quality of information and training. Its employees write books, speak at conferences and hold seminars in the Chicago office about their methods of work, where they talk in detail about what they did to become successful. Tickets for these $1,000 events sell out in minutes. By teaching everything they know, Basecamp employees have become the #1 experts for technology companies not obsessed with growth. They do not worry that someone will steal their innovations, but they try to implement and distribute them faster and better than anyone else, in their own unique style.Company of One
Treat every promise you make as a legal contract. If you promise to give something to someone (information, product, service), do it on time. If you are not sure that you can provide what you want, either refuse or agree on a longer period in order to do it in a timely manner. Every time you break your word, you lose the opportunity to work with all the contacts that a person or enterprise has because he will not recommend you to anyone or tell those he knows that you do not keep your word. You will ruin the relationship with the client and lose the chance to work with his acquaintances.
Huge Amazon delivers on promises. Previously, the company promised to deliver the order in less than seven days, then – in two, and now in some places – on the day of the order. Corporation buyers believe that the order will be delivered quickly and in which case it is easy to return it.Company of One
Admit mistakes and apologize. Even when a third party is the cause of the problem. Customers expect you to solve problems fairly, understandingly, and quickly. Therefore, listen carefully to the complaint, acknowledge the validity of the dissatisfaction, and tell honestly what happened and how you solve the problem. Finally, explain what will be done to make it last. Apologize like an empathetic person, not a corporate robot saying “we’re sorry.” After all, an apology is cheaper than a lawsuit or a refund.
Doctors who admitted their mistakes and apologized were much less likely to be accused of incompetence than those who denied them and defended themselves. A study by the University of Nottingham found that in most cases, an apology doesn’t cost a dime. Companies that apologized and tried to correct mistakes were in a better position than those that did not apologize but offered financial compensation.Company of One
Don’t hunt for new clients. In recent years, major companies have been obsessed with increasing the number of likes and followers but forget to keep in touch with those who already buy their products. But this is more important.
“100 zealous fans who are willing to buy everything you release is much more effective than 100 thousand followers who simply signed up to let you-play something like a free iPad.”Company of One
Andy Jones, head of product development at Wealthfront (formerly of Facebook and Twitter), believes that startups that aggressively target and prioritize rapid audience growth are accelerating their path to defeat.
Glide launched at number one in the App Store’s social media section thanks to a massive invitation system. It sent text messages to user contacts on their behalf (without their knowledge) immediately upon downloading the application. In order for it to stop sending spam, it was necessary to disable this feature in the settings. As a result, the rating of the application has fallen by hundreds of points.Company of One
The goal of a company of one is to strive to be better, not bigger. True relationships are built more slowly, require more effort, and result in less customer turnover. If you pay attention to the audience and listen to it, it will reward you with sales (most likely several over a long period).
Counterbalancing explosive growth is Kiva’s microfinance service, which develops relationships between lenders and borrowers. On the company’s website, residents of poor countries who need money for business talk about themselves. People like the farm shop owner in Zimbabwe write about where they come from and what they want to achieve with the loan. Those who read these stories can lend some or all of the funds needed. Thanks to this policy, Kiva’s loan repayment rate is 97%.Company of One
Turn new customers into lifetime ones. Write articles for websites and blogs, come up with an incentive program (including through a mobile app), appear on specialized podcasts in your industry, or show a personal touch.
At the author’s favorite restaurant in Tofino, the award-winning Pointe, visitors are always greeted with a glass of champagne. The waiters, bringing impeccably prepared dishes, sincerely strive to get to know the visitors better. Periodically, the chef comes out to take an interest in the affairs of customers. When the bill is brought, the maitre d’ offers to bring the car to the entrance. Giving customers surprise and joy, the restaurant justifiably requires a premium.Company of One
Specialize in certain consumers. A person needs to feel that you understand their needs and can solve their problems, and this cannot be achieved by trying to sell a product to everyone you meet. In this regard, targeted mailing with cross-selling is more effective than cold calls. The narrower the niche, the easier it is to sell and increase the margin.
Kurt Elster, instead of targeting all ecommerce consulting customers, focused on users of the Shopify platform. As a result, he increased his income eight times, gained fame and traveled the world as an expert speaker.Company of One
Build relationships with colleagues and people from other fields. Collaborating with colleagues, people from similar fields of activity, and even other industries, we get access to new ideas, and the opportunity to voice our concerns or make connections that will bring new customers. While maintaining autonomy, it is sometimes useful to feel part of the pack and realize that strength is in numbers.
Ghostly Ferns, a “design family”, works collaboratively on projects normally done by agencies, but remains a loose group of independent workers providing services from illustration to web application design. The team grows and shrinks depending on the requirements of the projects, and its members can work on their own ideas. This allows the company to win tenders of large clients and receive prestigious awards. The founder of the company believes that combining skills and talents with mutual support brings more significant results than when they work separately.Company of One
Top 10 Thoughts
1. To increase the profit of the company, it is not necessary to expand it at the expense of full-time employees and new items. You can cut costs, raise product prices, and hire freelancers or outsourcing organizations to solve specific problems.
2. Set a reasonable income ceiling so you can thrive even when times are tough, experience less stress, be healthier, and have a work-life balance.
3. Launch a business (or the first version of a product) and improve it based on real profits. Achieve quality results through restarts.
4. Sometimes you don’t even need money to start a business – only time (for example, when creating an online course) or you need insignificant investments (so small that you can borrow money from relatives). If you can’t do without a serious amount, attract public fundraising using sites like Kickstarter.com.
5. Treat every customer as if they were the only one: The success of your business depends on the success of your customers. Admit mistakes when problems arise and keep promises.
6. For long-term success, share information with customers about the benefits and uses of your product (including non-standard ones), communicate with them most of the time, and less – offer to purchase your product.
7. Don’t focus on the number of likes and followers – keep those who already buy your products. Incentivize word of mouth by offering a high-quality product and service, discounts, unique gifts, special deals, access to premium features, or two-way incentives for the referrer and new customer. Set up a communication schedule with clients to learn about their experiences and whether they are ready to cooperate again or refer potential clients to you.
8. Use business tools like Shopify to create an online store, MailChimp email marketing service to segment your target audience, and A/B testing to improve content.
9. Open a business after you have considered your future lifestyle. Then seek the help of a freelance lawyer and accountant. And then to receive additional income (in addition to the main one), invest part of the profit in index funds.
10. Ask those who work with people in your field what questions and problems they have in the process. Help them with free advice or develop a project plan to work for money in the future.