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Embrace smallness

If you think you are too small to make a difference, try sleeping in a tent with a mosquito.

Unknown

The grass is always greener. When you start out, you may be in a market full of huge, seemingly invincible companies with deep pockets and the power to crush your dreams. That’s the wrong way to look at it.

Plenty of companies that raised millions of dollars have unsuccessfully burned through that money and gone out of business. They hired too fast or ran out of runway by focusing on the wrong things. Remember that when a company raises millions of dollars, the most likely outcome is still to go out of business.

Don’t get caught up worrying about the ways you can’t compete with big companies. Instead, focus on the ways that they can’t compete with you. There are a few big ones: focus, agility, and customer service. And all three work together to benefit small businesses.

As time goes on and a business grows larger, it faces a constant battle between focusing enough to get things done, and expanding that focus to appeal to a larger market for growth’s sake. Businesses similarly struggle to maintain agility while decreasing risk, and they naturally gravitate towards decreasing risk at the expense of agility. Lastly, as the gap between the customers and the decision-makers grows, entropy begins to eat away at customer service. All three of these factors create opportunities for your business.

The most important thing to understand about larger businesses is that as a business grows, it becomes more difficult for the business to continue to grow. If you have 100 customers, gaining 10 new customers is a win. If you have 10,000 customers, another 10 is irrelevant. As a result, as companies get bigger they’re constantly hitting ceilings on growth that force them to place increasingly large bets. Frequently, those bets aren’t about things that matter to customers, and that’s when things go downhill.

But enough about context, let’s talk about your strengths.

When you’re small, you can change faster and improve at a rate that larger companies can only dream of. The larger those companies become, the more they face outside pressures that force them to make decisions that won’t necessarily benefit customers. Unless they fight it, companies naturally become less responsive, and in some cases they just let customer service fall by the wayside because they’re too distracted dealing with the larger organizational problems of being a huge company.

A bigger company is also forced to broaden its appeal. It needs to grow, and that means it needs to enter more markets. As any product becomes more generic, there will always be subsets of customers who feel it’s no longer quite the right fit.

That leaves the door wide open for you with lots of disgruntled customers looking for alternatives. And your strength is that you don’t need all of their customers. You only need some. And remember it’s not a zero-sum game. You don’t have to destroy the larger company. You just need enough customers to be comfortably profitable.

So how do you win those customers? Through great hands-on service. As the founder of your business, you’re in a position to have direct lines of communication with customers. You can build strong relationships, gather more feedback faster, and then incorporate that feedback into the product even faster. At the same time as customers are looking to leave the larger, less responsive company, you’re there to give them better service and a product that’s more in tune with their needs.

Moreover, since you don’t have the pressure of needing to gain hundreds or thousands of customers, you’re able to have a laser-focus on a specific audience. This is precisely how Nathan Barry grew ConvertKit. By focusing exclusively on the needs of professional bloggers, he was able to build a product that carved out a niche and was much more compelling than MailChimp for ConvertKit’s use case.

When you get started, focus ruthlessly on the thing that makes your business special. Big companies tend to become more generic and watered-down to appeal to larger audiences. Find the thing that makes you unique in the market, and focus on doing that one thing better than anyone else.

Remember that every company was small at one point, and plenty of upstarts have taken down behemoths. Focus. Stay scrappy and agile. Reduce your costs. Pay yourself just enough. Regularly talk to and take amazing care of your customers. As long as you make just enough profit to cover your living expenses, you’ll need very little to stay in the game, and you’ll have a virtually infinite runway to find your niche and succeed.

There’s one other key tip to being small: don’t hide your smallness. Too many online businesses try to hide the fact that they’re small. They write like a corporation and have an about page that dances around being a small team. This is disingenuous at best. If you’re worried that people won’t trust your business if they discover the size of the company, lying or misleading them isn’t going to win that trust.

Instead, create an about page that embraces your smallness. Let people know exactly what they’re getting, and start building relationships with people. You’ll earn far more trust and leeway by doing this than by pretending you’re something you’re not.

And finally, remember that someday, you too could very well be that big company. At each step, think about your decisions, and strive to make sure you’re not leaving the door open for that next scrappy business. Stay focused. Stay agile. And take great care of your customers.

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