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Size Does Not Matter Make

They say great things come in small packages. You shall be led to believe otherwise. In business, big is better. Don’t have at least $10 million in revenue? Then why are we talking? Today, I’d like to introduce the concept of a good business – small business – and that despite what every chamber of commerce, financial institution, and advertisement will tell you – size does not matter.

Let’s begin with a basic question – why do we want to be big? Here are a few plausible responses to that:

1) I want to make a lot of money.
2) I want to employ many people.
3) I want to serve as many people as possible with my product.

Number one is the most popular because this society is hinged on the premise that the more you have the better you are (and the happier you’ll be). Your stockbroker-turned-baker friend will tell you – money doesn’t make you better or happier. More importantly in business, it certainly doesn’t make for happier customers. When money starts to matter more to a company than the quality and caliber of its product or service, its customers are exponentially more susceptible to competitors. Good products breed loyalty and loyalty means repeat business.

Let’s take answer number two. I want to be big so I can employ a lot of people. Why? If its a matter of power you have other problems. But if its a matter of responsibility or wanting to help people, then remember that happy employees are better societal contributions than people with jobs. A company being big and hiring many people means nothing if the employees are unhappy. Large companies are the poster child for this atypical largely depressed American workforce. It’s not that all large companies are bad companies, it’s simply that large companies are generally less able to scale an environment where everyone is doing what they love and feels valued and rewarded for it. Don’t focus on hiring more people, focus on growing a passionate team. That will take a lot more time than Groupon and Wal-mart may lead you to believe.

And finally, the most noble – to serve as many people as possible with your product. Why is that important? For a non-profit that’s easy – to help as many people as possible! (Mental note: There should be a lot more very large non-profits.) But if you’re a business what is the value of serving as many people as possible? A good answer is that you believe that your product makes people’s lives better in which case you really want as many customers as possible. (Apple and Steve Jobs are a reliable example.) But if that isn’t your response, which in most cases it isn’t, then consider that the more people you try to make happy the less people you will. Democratizing your product for the sake of quantity, makes you less able to serve your real customers. Take Jean Paul Gaultier. His fashion is weird and controversial, but its this exactly that his loyal customers love and what’s gained him global brand notoriety. Conversely, trying to please everyone is the reason (I believe) most American cuisine stinks. Pleasing the palettes of immigrants from dozens of countries across the world is no easy to task. Lesson? Create a brand based on who you really are as a company; customers that share your values will buy.

A good product, a good team and finally a strong brand are what make a good business – not size. Happy customers and profitability (not revenue!) are the result. I am not saying that growth is bad, growth is good (I wrote a lot about it last year.) But what is bad is growth for growth’s sake. Its the root problem behind America’s financial collapse and the fact that this country rates 150 out of 178 on the World Happiness Index (two slots above Rwanda). Focus on being the best possible business, not the largest, and chances are growth will come naturally.

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