A Business that Questions Growth: The Company of One
According to Paul Jarvis, as mentioned in his book The Company of One, “most companies grow for 4 reasons: inflation, investors, churn, and ego.”
Inflation may push your company to seek growth for survival reasons: if things are more expensive due to inflation, you need to earn more income to pay those expenses.
Investors may push your company to grow because that’s in their best interest: growing organizations in order to get a return on their investment.
Churn is the rate at which you lose customers over a specific period of time. A high churn rate creates a downward spiral of losing profit, which may push you to invest more in customer acquisition. As Paul Jarvis points out, however, customer acquisition is much more expensive than investing in retaining existing customers. Your ultimate goal is to reduce the churn rate as much as possible.
Ego is the enemy, as the book title of author Ryan Holiday states boldly. Ego is the inflated sense of self that may push you to grow because it feels more impressive to own a $10,000,000 business compared to a $1,000,000 business. Controlling the ego is a personal choice you may commit to. If you set a clear purpose for yourself and the size of your business, you can stick to it and let go of egoic pursuits.
An additional valid argument for growing a business that an effective altruist may make is this: the more you grow a business, the more social impact you can have. That is seemingly true: when you own a big business, you create many jobs, generate higher profits, and can invest those profits into the community around you or charitable associations.
It is also true that the more you grow a business, the more layers of complexity you are adding to the game. The levels of bureaucracy and approval layers may also make your social impact slower and more underwhelming than you may think. Overall, growing a business to have a greater social impact is a rational argument that can apply to those individuals who want to maximize social impact rather than their own tranquility and peace of existence. Tranquility and peace of existence are more likely to be a byproduct of operating a small company instead of a large one with many employees.
Besides tranquility and peace of existence—the sense that you don’t have to run around hyperactively all day long, the promise of the company of one mindset by Paul Jarvis is the lifestyle it brings with it. Operating a “company of one” is a lifestyle-centric choice, similar to lifestyle-centered career planning, a concept coined by computer science professor and writer Cal Newport. You operate your business to benefit your lifestyle and sanity.
The environment of a company of one is devoid of the urgency trap and unnecessary slowness in decision-making. No matter how many employees you have, a company of one maximizes well-being and lifestyle rather than hyper-growth. This mindset leads to a lower sense of burden on everyone working with you, but it can also lead to dullness if you don’t pay close attention to what you are doing and why.
There is a balance between tension and relaxation in work-related endeavors. Too much tension, and there are diminishing returns to the quality of output because everyone feels rushed and anxious. Too much relaxation and there are also diminishing returns to the quality of output because everyone is idle. You want to strike a good balance between the two states, and that’s what a company of one is—a company that builds itself around lifestyle rather than status and money. And to maintain a lifestyle-centric purpose, you get to find the balance between tension and relaxation and maintain it over time.
Whether you find the company of one mindset enticing also depends on your personality makeup. People higher in openness to experience (the “creativity dimension”, so to speak) may tend to prefer a company of one mindset and environment because of their tendency to seek novelty and freedom. A company of one is designed around maximizing freedom. If you are high in “conscientiousness” and lower in “openness to experience”, you may feel more pulled toward growing a company as much as possible, because the thought of working as hard as possible for a prolonged period of time is “in your DNA”.
Ultimately, being aware of the company of one mindset can be a valuable tool to stir your decisions in life and business. This is an additional framework that has always been there, and that Paul Jarvis articulated very well in his landmark book. When merged with the concepts of a world without email, and leadership frameworks, a company of one can become a powerful means of optimizing freedom and designing your own deep life.
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