One door at a time

Entrepreneurs are told to go big or go home. Stop obsessing over scale, and perfect the basics instead.

Last year, I met a first-time entrepreneur who was opening a tea shop. We’ll call him John.

At the time, he had a pop-up shop in my neighborhood. I really liked him, his vision, and the quality and presentation of his tea, so we kept in touch. When he decided to go from pop-up to permanent shop, he asked for my advice.

While we were talking about this permanent shop, which he still hadn’t opened, his attention would often drift to his next shop. And the one after that. And after that. And then building an app to make online ordering easy. And then, becoming the next Starbucks.

Whoa. Hold on, man, I told him. I get it, scaling the business seems sexy. But, I said, that is the entirely wrong thing to think about now. I wouldn’t spend even a second on it. You have a serious challenge in front of you: opening your first real store and getting your first customer (that isn’t a friend or family) in the door.

In getting just one store right, everything is against you. You have to design and build out the physical structure. You have to hire good people to run the shop when you aren’t there. You have to train those people. You have to get the menu right. You have to get the pricing right. You have to get the presentation right. You have to get customer service right. You have to get customers in the door. And then you need to get them to come back.

So much to get right in the here and now. Not down the road, but today.

I’ve noticed that John isn’t alone in his desire to go big. Something’s changed in what’s expected of the entrepreneur. Ten years ago, people were excited to just start a business, to create their own thing so they didn’t have to go work for someone else. They wanted to make a good living, buy a house, and be able to pay for their kids’ college.

But now, entrepreneurship seems like a sport. And the score depends on scale. How big can you get? How fast can you get big? How much power can you amass in the shortest possible time?

There are lots of forces pushing this scale-it-up, go-big-or-go-home mirage. Business schools are guilty of pumping pipe dreams into students’ heads: If you follow this framework, you can become the next Howard Schultz or Mark Zuckerberg or Elon Musk. Media worship of super-fast-growing companies — many of which are actually terrible, money-losing companies — fuels the fire. Reality TV and social media make it look like everyone can afford a $5,000-a-month studio apartment in San Francisco.

This narrative is out of whack. Your teenager may enjoy doing school plays, but you’d be irresponsible to urge her to move to Hollywood and try to become a movie star overnight.

If she is serious about acting, you might encourage her to audition for local roles (or head to a slightly larger city where there’s more opportunity), and build a reel and a reputation, which, hopefully, over time, would allow her to replace tips from waiting tables with paychecks from acting jobs.

Yet many entrepreneurs believe they can rush right to the top. Skip the fundamental work, and just scale, baby! One store is for losers; if you want to make it, you need 100 stores. This kind of thinking is poisonous. It sets entrepreneurs up to fail from day one. It’s like telling aspiring basketball players that all they need to practice are flashy dunks. Free throws? Dribbling with your left hand? Passing? Playing defense? Ha! Whatever! We know how that advice would turn out.

So, back to John. His ambition is good. And it’s good that he has a vision. But he would be much better off focusing all that energy on store number one, pouring everything into making it a destination people can’t ignore. Only then, once there is a line out the door, is it time to think about doing it again. One door at a time.

This article also appears in the July/August issue of Inc. Magazine.

My kind of contract

The work for hire terms at Segura, a design firm in Chicago. My three favorite bits: 1. “Time is money. More time is more money.” 2. “If you want something that’s been done before, use that.” 3. The pro bono amendments.

You give me money, I’ll give you creative.
I’ll start when the check clears.
Time is money. More time is more money.
I’ll listen to you. You listen to me.
You tell me what you want, I’ll tell you what you need.
You want me to be on time, I want you to be on time.
What you use is yours, what you don’t is mine.
I can’t give you stuff I don’t own.
I’ll try not to be an ass, you should do the same.
If you want something that’s been done before, use that.


If you want your way, you have to pay.
If you don’t pay, I have final say.

Let’s create something great together.

For those who will be quick to point out legal holes or missing protections, there are many ways to do business. One way is working with clients you trust — people who appreciate this approach to work. And if you guessed wrong, and someone fucks you, rather than pursuing legal remedies which cost even more time, money, and hassle, there’s an alternative: Take your losses, wash your hands, and don’t work with them again.

Act your size

If it’s just you say “I”, not “We”. There’s no need to put up a front.

Before I started Basecamp back in 1999 (we were originally called 37signals), I had a software and Web design business called Spinfree.

The Internet was a fairly new and exotic phenomenon back then, and it was pretty easy to drum up clients willing to pay quite well to improve their nascent websites. Within a year or so, I had a nice client list, built entirely through word of mouth. I was just a year out of college and making a good living. While my friends were struggling with entry-level jobs they didn’t like, I was doing exactly what I wanted to do.

But Spinfree had a dirty little secret: It wasn’t really a “company.” It was just me. My headquarters consisted of a small desk a few feet from my bed in a cramped, one-bedroom apartment.

I was pretty insecure about my solo status and went to great lengths to make things appear otherwise. When describing Spinfree, I always spoke in terms of we, us, the team, or our offices. I trained myself always to use the collective first person — on the phone while pitching to potential clients, on Spinfree’s website, in the proposals I submitted.

And because I seldom met my clients face to face, it was easy to keep the ruse going. Many of them probably had the impression that Spinfree was an actual company, complete with teams of professionals ensconced in cubicles, hard at work on their projects.

Why the bluffing? I was young and inexperienced and felt like people would not take Spinfree seriously if they knew that it was just me. After all, what responsible businessperson would trust some young punk right out of college with a brand’s online presence? As the old saying goes, no one ever got fired for hiring IBM. But it seemed certain that someone could get fired for hiring me. I felt I had no choice but to act big.

I remember the relief I felt when I hired my first employee, in 1998. Suddenly, there really was a we and an us. An enormous weight had been lifted, and I wondered how and why I had spent the past couple of years acting — and flat-out lying. A harmless little lie, maybe, but a lie nonetheless. I didn’t feel good about it.

Did the deception actually win me any business? Who knows? It may have helped me get a foot in a couple of doors. But in retrospect, I find the fronting pretty embarrassing. And dumb. Because all of my clients came from word-of-mouth referrals, I was playing a game of chicken with a lot of potential business. Being discovered not only would have been humiliating — no one likes to get caught in a lie, however well intended — it could have harmed my reputation.

When I helped launch my next business, 37signals (today known as Basecamp) we decided from the outset that openness, honesty, and no bullshit would be core tenets. Our original site says it all.

The plan was simply to be honest with customers and let the chips fall where they may. That’s exactly what we have done for more than 17 years — whether it’s admitting when we mess up or making Basecamp’s prices are fixed, with no hidden fees or per-user costs. We sleep well at night knowing we have nothing to hide and that our customers won’t get hit with an increased bill they weren’t expecting.

I like to tell this story to new entrepreneurs when I meet them, because I see so many of them following the same pattern I did. They’re stretching the truth, acting, and misrepresenting themselves in the name of winning business. It’s especially common among independent designers, programmers, copywriters, and consultants. Obviously, I understand why they’re doing it. I just wish they understood why 1. it’s a bad idea, and 2. it’s completely unnecessary.

Bullshitting about scale is only part of the problem. There’s an awful lot of resumé enhancement going on as well. Think about what’s really happening when you see, say, Apple on someone’s client list. Do you think the person really worked for Apple? Or perhaps it was just a small job for the Apple reseller down the street? Or they were on a conference call with someone from Apple once. I’ve seen it all.

I once met an entrepreneur who told me that Boeing was a client. I raised an eyebrow: “Really?” It turned out the company helped a Boeing executive set up a personal blog on the side. When I asked him why he felt it was worth citing Boeing as a client, he told me it would help him build trust with other potential big clients. If they knew he’d worked with Boeing, they’d be more likely to hire him. I don’t think he even understood what he was saying. Building trust via deception? That “credibility” isn’t going to take you very far. And if you get caught in your bluff, you’ve lost the client for sure.

What’s more, the business culture has changed considerably since I was “running” Spinfree in the mid-1990s. There’s a lot more respect for small outfits and even solo players than ever before. Who isn’t fascinated by the story of the lone programmer creating a blockbuster iPhone app on a laptop in his kitchen? Who doesn’t admire the entrepreneur with the guts to do her own thing? Small is really where it’s at. Even the big guys act as though they wish they were smaller. The largest corporations in the world sell themselves using terms most often used to describe entrepreneurs: agile, flexible, fast. They crow about the fact that employees are rewarded for acting like entrepreneurs. And think about all the executives who fantasize about running their own shows.

Does that mean they will award you the big contract? Maybe not. Even in the age of the entrepreneur, not everyone is eager to place a major project in the hands of a small shop. But clients who are impressed by scale aren’t the kind of clients you want anyway. Lots of start-up founders dream of working for a big brand, but the truth is, it’s usually pretty shitty work. Instead, find like-minded clients closer to your own size, and grow with them. I can guarantee that you’ll wind up doing more interesting, more challenging work.

Another advantage to owning up to your slight stature: Your customers will always know whom they are dealing with. They’ll know they’ll get the most personal service possible. A lot of people have had the experience of working with a company only to see their key contact move on to another job. The relationship is lost. That’s not possible when it’s your business. You are your business. They’ll have you from start to finish. That’s a big advantage.

I wish I knew then what I know now: Being small is nothing to be insecure or ashamed about. Small is great. Small is independence. Small is opportunity. Celebrate it. Don’t hide from it. Businesses always benefit from being straightforward and clear. So don’t worry about it. Don’t act. Be upfront and honest, and bask in your smallness. It’s truly to your advantage.

This was one of the first articles I wrote for Inc. magazine back in June 2011.