Company of One

by Paul Jarvis

  How does a company of one build genuine connections in order to navigate its true north? Unfortunately, a simple desire to be authentic won’t magically make us authentic, and consumers are smart enough to see our true intentions whether we want them to or not.

  Chris Brogan believes that real connections are built when companies share a simple message, repeatedly, through their actions. Long before they ask for a sale, these companies articulate their message by sharing who they serve, and why. In our interview, Chris created a story on the spot that illustrates how this concept works for a business:

  Imagine that your business sells fortune cookies with messages praising employees for their achievements. Your ideal customers would be HR people who are looking to reward employees for their hard work. A simple message that could be used on your website would be something along the lines of: “We’re here to catch you doing something good at work.” This shows the importance of praise at work and validates the product you sell (which is a good vehicle for that praise). It would make sense, as a marketing effort, to start a newsletter that showcases one great employee from your customer pool each week. This would show why praise is important and how it benefits companies that take it seriously, as well as provide an excellent example of what can be rewarded.

  The newsletter isn’t directly pitching your fortune cookies each week, as no one would want to subscribe to a weekly product pitch. What it does is show the potential benefits of rewarding good work, featuring your product as one specific way that can be accomplished. This message shows that, as a business first and foremost, you want your customers to succeed and thrive, and that secondarily you’ve got a product that can help them do that. By collecting and talking to customers constantly, you’re building real personal connections with them and learning more about what they need in their business as it directly relates to what you’re selling. As a company of one, your true north here is showcasing how companies can benefit from rewarding good employees — which leads to sales of fortune cookies.

  BANKING SOCIAL CAPITAL

  Even a company of one whose true north isn’t growth requires three types of capital. The first is financial capital, which we learned in Chapter 11 should be as small as possible to start so that profit — achieving your MVPr — happens quickly. The second is human capital, which is the value that you (or your small team) bring to the business or group: this value takes the form of the skills you’ll need — or your willingness to learn them — to build something and be autonomous in running it. The third type of capital required is social capital. While financial and human capital are important, social capital tends to be what makes or breaks a business, as it’s the piece that relates to how a market or audience sees the value in what you’re offering.

  The term “social capital” was used intermittently as early as the beginning of the 1900s, but it gained popularity in the 1990s. Lyda Judson Hanifan is credited with coining the term in 1916; later it made a resurgence as a way to describe relationships — especially online relationships — as a form of currency. When cashed in, social capital is what you can ask people to do that benefits you (like buying your product or having someone share what you wrote with others).

  The premise of social capital as the term is used today is that our social networks indeed have value. The people in those networks do things for each other, such as buying products, sharing articles, and helping each other. Relationships are currency. So companies of one need to think of social capital like a bank account. You can only take out what you put in. If you’re always asking people to buy your products or doing nothing but promoting your business and its products on social media, your balance will hit zero or you may even be quickly overdrawn. People don’t want to buy something from someone who is constantly bothering them on social media with “Buy my stuff!” tweets and posts or newsletters extolling the virtues of their products every week. No matter how often you ask, you won’t make any sales, and no conversion tactics or growth-hacking will help.

  Instead, you have to make deposits into your social capital account often and build up your balance well before you ask your audience to buy what you’re selling. Do this by being helpful and creating value for as many people in your audience as possible. At the core, your social capital depends on what you can provide for your audience that educates and builds trust, value, and reputation. Social capital is built on mutually beneficial relationships, not one-sided sales-pitch-fests.

  Relationships from social networks — which can be anything where people connect, not just Twitter or LinkedIn — have immense value. That’s why many companies of one have mailing lists (a social network they’re in control of) that drive sales. Or why many companies of one engage in conversations on social media. Relationships are the basis for building the trust required for commerce.

  Buffer, our friend from previous chapters, is a company that helps people manage their social media accounts. They write daily on their blog, sharing well-written and well-researched articles about social media, which is the type of content that their audience is intensely interested in. Buffer committed to providing value, for free, right from the start and has grown to more than 1.2 million users in two years, with more than 700,000 people reading their blog each month.

  Chris Guillebeau, best-selling author and creator of the World Domination Summit, personally emailed the first 10,000 people on his mailing list to thank them for signing up. Sometimes doing something that doesn’t scale but is truly genuine is a great way to form strong connections with your audience. Through his authenticity and personal touch, Chris has sold more than 300,000 books and continues to sell out the WDS event each year.

  There are several schools of thought about building social capital, but a popular theory put forth by Sam Milbrath of HootSuite is that you can begin by dividing your mass interactions with an audience into thirds. Sam suggests that one-third of your updates should be about your business or your content, one-third should be sharing content from others, and one-third should be personal interactions that build relationships with your audience.

  Dr. Willy Bolander, assistant professor of marketing at Florida State University, and his colleague Dr. Cinthia Satornino, assistant professor of marketing at Northeastern University, found that as much as 26.6 percent of variance in sales performance comes from the social capital of a business. So building relationships by banking social capital leads directly to higher sales — sometimes as much as one-third higher. By sharing and teaching, as we’ve seen in previous chapters, you can establish yourself as a credible expert. And in helping people with your expertise, you can build social capital with an audience.

  Social capital works because it fosters reciprocity. The more you share, provide real value and help, and connect with others, the more they’ll want to help you. Danielle LaPorte, from earlier in the book, doesn’t separate business relationships from her personal relationships. To her, they are the same, and she feels that all good business relationships have a strong spine of personal friendship, where both parties genuinely care about and want to help each other. These are relationships that last.

  Having the empathy to learn what a consumer really wants from your company of one besides your product or service — whether it’s knowledge, education, or just help — can go a long way. Empathy takes a relationship from “What can I sell you?” to “How can I truly help you?” This is the way to bank social capital: by starting a long-term and mutually beneficial relationship.

  DON’T FORGET THE PEOPLE WHO BUY FROM YOU

  HighRise, a CRM (customer relationship management) company (and an offshoot business of our friends at Basecamp), does something most unusual when a person becomes a customer of their software — their support team films a personalized video for that new customer: addressing them by name, asking what help they specifically need, and giving them direct access to a human being at HighRise.

  While providing these videos is definitely not a scalable system, it’s
an absolutely amazing relationship-builder between the business and its customers. The videos aren’t professionally shot — most are taken from a shaky camera phone, with poor lighting — but they are always well received. So well received, in fact, that they tend to get shared on social media quite a bit, generating a lot of press for HighRise. Something as simple as a thirty-second video welcoming a customer to a product has real capacity to build goodwill, social capital, and genuine connection between a customer and a company.

  McGill University feels so strongly that deep relationships are required with customers that they actually teach several courses and workshops on the subject. Matthew Lieberman, a professor of social cognitive neuroscience at UCLA, even goes so far as to suggest that Abraham Maslow had it quite wrong in his pyramidal hierarchy of needs when he specified physiological needs and the need for safety as humans’ most basic needs. Instead, in Lieberman’s estimation, belonging and connection, which Maslow defines as psychological needs, are our most basic need and should be at the bottom of the pyramid, because humans are wired to connect with each other.

  Large businesses, however, in focusing on making everything quicker, often offer little real human interaction. Obviously, scalable systems are important, but only if human interaction is still at play. Too often, companies put all of their focus on turning their audience into paying customers and don’t spend enough time connecting with people once they become paying customers. For Chris Brogan, and for many other companies of one, the focus stays directly on customers — by properly onboarding them, communicating with them regularly, and making sure they’re getting value and use out of what he’s selling. He doesn’t want to make $100 off someone once; he wants to make thousands of dollars off each customer over the span of many years. This is why he focuses on customer relationships after each sale — to make sure customers are happy enough to come back again and again to buy more from him.

  In their efforts to increase reach, audience, and customers, companies cannot forget about their existing customer base. Daiya Foods, a Canadian plant-based company that makes a dairy-free cheese alternative, has been popular with vegans — their core customer base — for many years. When the company was sold to the pharmaceutical giant Otsuka in the summer of 2017, its customers were outraged. By routinely testing products in animals, Otsuka, to Daiya’s customers, acts in direct opposition to what vegans stand for: cruelty-free living and not harming animals. The outrage wasn’t just at the consumer level either: also quickly boycotting the brand were businesses that use Daiya cheese in their commercial products — like the Toronto-based vegan pizzeria Apiecalypse Now. Going through twenty cases of Daiya per week, Apiecalypse Now placed the largest single orders for the “cheese” outside of grocery chains.

  Daiya had felt that it could reach a larger customer base by selling itself to a multinational company, but the resulting sudden misalignment of values caused loyal and long-term customers to revolt. In chasing growth, Daiya ignored the main reason it had enjoyed success in the first place — by catering specifically to people who wanted to eat a plant-based diet. Petitions and boycotts quickly went up online, with thousands of ex-customers, feeling betrayed by the change in the core values on which Daiya had been founded, signing on within days of the announcement. Several retailers, like Portland’s Food Fight and Brooklyn’s Orchard Grocer, stopped selling Daiya immediately. Within hours, over 6,000 people signed a petition to boycott the brand.

  Bear in mind that Daiya is not just an isolated incident. When Apple released its bug-filled maps software, CEO Tim Cook had to issue a public apology. When United Airlines yanked a customer from his paid-for seat, the internet exploded, and United stock plummeted by a market value of about $1 billion. When Nivea staged an ill-conceived “White Is Purity” campaign that was quickly embraced by white supremacy groups (not their target audience), the company saw a huge backlash from consumers who felt that the ad was overtly racist.

  By not first considering the core group and relationship that your business serves, you can run a risk of making them feel like they don’t matter — or worse, making them feel like your company doesn’t care about them. At that point, they can gather their digital pitchforks and take to the streets of the internet with their outrage toward your business. And consumer outrage rarely stops at angry tweets — it causes serious business repercussions too.

  Jim Dougherty, a lecturer at MIT’s Sloan School of Management, has identified several key points to building relationships with customers so that they’ll have an emotional and loyal stake in your business.

  The first, Dougherty noted, is ensuring that customers like your business. That’s a fairly obvious point, but you can’t move forward in a relationship without this basic prerequisite. Going out of your way to be personal, friendly, and helpful encourages a potential customer or client to like your business more.

  Second, respect must be present. Customers have to admire your work, what you offer, and how your company behaves. You build respect by doing things like following up, competently segmenting customers on your list (i.e., not pitching them products they’ve already purchased), and working to be the best at what you offer.

  Next, customers need to admire your “whole person” — not just how you act when you’re trying to sell them something. What charities do you support? How do you act outside of work? With everyone sharing everything on social media, your entire life is available to anyone with access to Google. CEOs are sharing the news when their own babies are born (like Mark Zuckerberg or Marissa Mayer). Tim Cook, an incredibly private man, shared an essay about being gay and campaigns against anti-transgender laws. Customers admire businesses that feel and act similarly to them. Admiration develops when you do this well, and once you have their admiration, customers develop an interest in your success and accomplishments instead of a sense of resentment or jealousy.

  Finally, it’s important that you maintain the relationship over time, even with customers who haven’t financially supported your business in a while with a purchase. Consistency and longevity are key. Dougherty has found that this is where most businesses fail with relationships — that is, they drop off because they can’t “find the time” when the business benefit seems to disappear. This is the exact time, however, when the relationship becomes most valuable, when a customer could be considering another purchase or heavily recommending a business to their peers or their own customers. Good relationships are the foundation to a successful business, especially for companies of one.

  The return on investment from building connections with customers can manifest in several ways, like loyalty to your brand, vocal advocacy for your products, or even a reduction in churn. IBM did a study of more than 1,500 business leaders across sixty countries and thirty-three industries and found that the majority of these leaders (88 percent) viewed deeper customer relationships as the most important dimension of their business.

  Building connections with customers comes down to happiness: if they’re happy, they’ll keep using your product or service. If they’re happy, they’ll tell others about your business. If they’re happy, they’ll stay loyal to your brand. There’s no need to overthink customer relationships when the main point should always be: what can you do as a company of one to make your customers happy?

  ON NOT BEING A LONE WOLF

  Remember, just because you might work for yourself doesn’t mean you have to work by yourself. Just as connections to an audience or paying customers are important, so too are relationships with your peers.

  Angela Devlen, CEO of Wakefield Brunswick, understands the value of not being a lone wolf in business. Her company is able to do its job — consulting with large hospitals and health care facilities to help them plan for and recover from major disasters — by partnering with the top people in related fields in order to offer fuller services to its clients. These partners are not employees of Wakefield Brunswick, but they do represent her company when she brings them on for projects. I
t’s a tight-knit and trusted network of independent business owners who work together under a single brand for a client. And conversely, if they bring her into a project, she represents their brand in the project. Each person serves on a team that is brought together for a specific project, then disbanded until they’re required again. This requires no micromanaging, as these business owners are skilled at the service that’s required of them, so full autonomy, with the direction of a project lead, can and does happen.

  Operating this way allows Angela to run her business out of a shared coworking office (which she recommends to anyone running a small company) and to have only a single, full-time employee. This leaves the administration of her business quite light, with minimal HR obligations, and allows her greater profits from much less overhead.

  Wakefield Brunswick has trusted partners only because Angela has worked hard at developing relationships with the leaders in services related to her own business. It wouldn’t work for her if she hired just anyone off the street, as they wouldn’t have the requisite trust to represent her brand well without first being trained extensively, which takes a lot of time.