I’ve always identified with the culture of small. To me, big and safe is synonymous with slow and clumsy. When Seth Godin cheered small as the new big, I thought “new?” But, small isn’t always efficient, and sometimes staying agile means getting bigger.
Before I get too far into the thought, I should point out that I’m speaking only to my own field, web development. In terms of scale, I would call teams with 2-11 web-focused employees small. My company, electric pulp, has been in business for 10 years and will exceed 10 employees for the first time later this month. We were small before it was popular.
Back to the point…
Small isn’t always agile.
The baseline of project work and client demand can quickly max out a small company’s capacity. The issue is that small companies typically have problems defining what their capacity is. In the case where a few or more of the employees are also [exempt] owners, there’s a perception that you can always bring on more projects. But take it from one such [exempt] guy, one day you wake up and realize there aren’t enough hours in a day.
As far as I can tell, long hours and crazy stress are both part of getting a business running. But if you find yourself spending your nights just trying to keep up, the last thing you are is agile. And agility is the one true competitive advantage of being small. The way to gain it back is to hire.
There’s no room for average inside of small.
I see growth as a response only to ideal conditions. At ep, we’ve always waited until we were slammed with no sign of letting up before hiring. You might think being too busy encourages a quick hire of someone that may not be qualified. We’ve found that it does the opposite. It forces you to hire a monster. Sleep deprivation seems to draw a tight focus on the need to find someone that can make an immediate impact.
As a sidenote, if you find yourself considering a hire that you think you could keep busy on mundane tasks, back away slowly. You’ll only find yourself bringing on mundane work to keep that person busy. If you’re interested in retiring doing what you enjoy most and do best, you can’t be managing villagers handling mundane tasks. Only hire monsters.
Small shouldn’t mean all-access.
This will sound really basic to most of you (especially if you’ve never been small,) but hordes of small business owners will list out the fact they answer the main line as if it’s a competitive advantage. Don’t do it. If your role is anything other than customer service, you don’t have time to answer the phones. Ask one of your monsters to do it.
That should act as a prep for what’s coming next…
Web developers can quickly fall into the all access trap. If you find yourself presenting, proposing, meeting, producing and billing your client, you’re going to run into trouble. Project managers are worth their weight in gold. It isn’t until you have them that you realize how much production and billing you were losing. At ep, we need one project manager for every four producers – there’s no science behind it, that’s just what seems to work for us.
To repeat, being an all-access owner is not a competitive advantage. You’ll find exceptions to that rule (we have two clients that have everything but our house keys,) but keep them as exceptions.
The label of small is rarely given as a compliment.
Potential clients do not say “you guys are pretty small…” and mean it as a compliment. Loosely translated, what you just heard was “I’m not quite sure I’d trust you as a vendor.” In the case where the speaker is from a traditional ad agency, I think it’s actually more likely that what you just heard was “boy, you little guys must really suck.” It’s on you to demonstrate a proven track record and a culture of accountability (not all-accessibility.)
To be clear, we’ve never tried to hide our size, and we aren’t afraid to drop a little Tom Jones into our hold music. The last thing we want to do is give a false impression of who we are and what we do. But we also know that we need to prove that being small does not mean we screw around (on client time.) We provide clear proposals, scopes and contracts. We explain points of contact, development schedules and deliverables. And we stick to them.
Don’t let small mean unreliable.
At 10 years in, we understand that redundancy is a requirement. If you develop web sites / applications as business solutions you have to be reliable. And if your team has only one person that can effectively support a client’s mission critical application, you are your clients Achilles’ heel.
This is a situation that sneaks up on you. One day you think you build websites, and the next, you realize you’re supporting systems that clients rely on to keep their business running. If you don’t have sufficient redundancy, this should make you very nervous. Redundancy belies small (in the bad sense) but doesn’t make you big (in the bad sense.) Redundancy means you can take on big clients. Redundancy means you can support revenue shares. Redundancy means you can go to Mexico for the week. Just make sure you’re plugging in monsters and not villagers. Redundancy does not mean you have someone at the office that can call your cell if there’s a problem.
Sick of reading yet?
I’m not sure I’m making any sense at this point, so I’ll close it down by reiterating a few thoughts. Small in and of itself is not a competitive advantage. Being agile is. If agile is what you’re shooting for, keep that as your target. Maybe agile means mid-size, and who cares? 37Signals? Seth Godin? Probably not. I think many of their points are mistaken. I don’t think either of these two are trying to convey the idea that 5 is inherently better than 50.
Just make sure that whatever size you become, you still enjoy what you’re doing. Like I mentioned above, I fully intend to retire doing what I enjoy most and do best. Whether I leave a team of 5 or 50, I still plan to identify with the culture of small when I’m out.
7 Responses to “The culture of small”
Awesome post. As someone considering starting their own company, I have a million questions. I’ll just ask one for now — How important is incorporating for a small developer? I know a lot of freelancers who don’t do it.
Hey Ryan. I’m not a lawyer, so I can only speak from personal level of comfort. With that lead, I think it’s very important, both for legal reasons and tax purposes. I would never be comfortable without some degree of separation between business assets and liabilities, personal assets and liabilities, and business partner’s personal assets and liabilities. EP has three owners, we file as an S-Corp. inc.com will have articles on the topic.
Great points in this post. At 1 time, I tried to “stretch” the size of IDC by adding in every contract worker I could think of when someone asked how many employees we have. It did not work for 2 reasons…1) I did not like the feeling of deceipt (sp?) combined with 2) when I would say “7 or 8″ rather than a hard number, it was wishy washy. For years now, when someone asks, I respond “2 with a team of contractors who can assist us to meet all of our/your needs when necessary.” You nailed the key though…we have 2 Monsters and looking to hit 3 soon. In our space is not necessarily manpower but rather the mind of the individuals and the ability to use task-rapidifying (not a word, but works) tools and software.
2nd time on your blog and each time, I have spent a good hour reading. Great content and writing style.
The importance of numbers [of employees] onboard a small company is sometimes misunderstood by big guys, but past performance is hard to dispute. It’s pretty easy to point to volume of work if capacity is questioned, time in business (or in the industry) if stability is questioned, and/or client references if reliability is questioned.
For anyone reading not familiar with IDC, Greg’s company is a poster child for good [while] small. If the IDC playbook ever gets declassified, I want a copy.
Couple other points I will share for companies who do not have scale via sheer employee numbers is that scale has many variables for most businesses. In search marketing, especially the PPC side, our scale often comes through massive keyword campaigns or by understanding “terming”. In less than 1 week, we can scale from zero and assuming the client offering warrants (product database or skus enable) to realistically 250,000 keywords all tied to unique ad clusters; we do this often. Yet, if time is tight, we may scale through various matching (broad, phrase, exact) and geo-targetting methods instead, possibly achieving similar results in say 1,000 terms. Ideally you use both but resources dictate when you get in a bind. The key is to know how to use that limited time to get maximum results.
Also, for companies with limited time, I think it is essential to set client expectations. Do not overpromise, yet do not underpromise either…set a realistic promise; you know how you work. And, once you have clients, service your best ones at all costs. It is much harder to go fishing than it is to do a little whale watching.
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