Capitalism is a snowball rolling down a steep hill
Capitalism isn’t an immutable law, but simply something we collectively believe in. We collectively go to work, make money, and assume the more money generated, the better off we are—in both our businesses and our lives.
This a narrative we can opt out of.
Our belief in a capitalist market creates two classes: the small minority of people who own massive businesses that are ever-growing, and the larger group of people who trade their work for money from the prior group. This difference in classes is essential to the operation of capitalism, because there has to be workers, and those workers have to be governed by someone who’s fiduciary duty is not to the workers but to growth in all directions for their own self-serving means and shareholders.
The workers become convinced that consumerism is the only path forward. But they’re convinced of this by that same small minority of people who directly benefit from their consumerism. It has to happen to keep the wheels spinning, the factories humming, the profits increasing. Under this hype of buy more stuff, is empty promises, when sometimes all we need is what we’ve already got. With more stuff comes more responsibilities, and more problems. In all honestly, most of the time we’d be better off and happier with less. Which on the other end would mean less work, less profits for the small ruling group of people and more free time (because we don’t need to make as much to cover our essentials).
The system has built an economy that seems to have reached a logical conclusion: consumers have grown tired of companies increasing their reach with average goods in huge quantities. Employees have grown tired of working for companies that are more focused on pleasing shareholders with quarterly earnings than creating stable jobs for their workers. En masse people are turning to working for themselves and the freelancer economy and employee-less businesses are booming and eating more and more of the jobs available. According to a study by Intuit, 40% of the workforce in the US (60 million people) will be freelancing by 2020.
What would happen if we changed things, even just a little bit? What if we all became our own small businesses (in mindset or in practice) where our duties were to enrich and optimize our lives and work, not just for revenue but for enjoyment? For time spent with family, or out surfing, or simply doing the tasks we enjoyed doing?
Money and profit aren’t fundamentally evil or wrong, they’re just impartial tools. Where they become evil is when our focus turns to solely getting more of them, leaving aside things we actually value and make our lives and businesses unique and empathetic. What if instead of optimizing for maximum profit, we optimized for life satisfaction and enjoyment?
Growth creates more growth, like a snowball.
The bigger you get, the more you need people and infrastructure to manage the business, which requires more customers, which requires more levels of management, which requires more decision makers, and so on. The snowball grows larger and larger as it descends, until it’s the size of a small country, rolling down a hill at breakneck speed.
I’ve fairly heavily bashed growth-hacking, and I’ve never been a fan of venture capital. It’s not black and white, both avenues require thinking about some key ideas: Is taking investment actually required to be successful in this business? What are the long-term ramifications of obsessing over growth? How does taking investors change the relationship between your business and your consumers? Does it also benefit them?
Long-term stability is often not possible when investors get involved because they want to make money off of your business. Their job is to take more money out of a business than they put in. That’s their metric for success, and no one can fault them for it. Taking more out than they put in doesn’t require a business to be profitable or successful either, since most of the time getting more out is an unending cycle of simply finding more investors to put more money in. But does accepting investment in the first place, line up with how you want to run your business? Are you looking for an exit strategy or a long-term strategy to have a business that thrives? And if it’s an exit strategy, please know that it’s much harder to find a buyer for a business that won’t pay liquidation prices for it. It’s actually much easier to find customers than whole business buyers. Having customers gives you indefinite time—since as long as enough of them are paying, they’re creating profit for you, and you can go on indefinitely when you’re making money, even if it’s not a lot of it. It just has to be enough of it.
Throughout the interviews I conducted in the last year, the general sentiment from folks with larger companies was that they pined for the days when they were smaller. When they had less employees and managing to do, they were better able to make decisions and more closely connect to their customers. Not a single person said they loved being much larger.
So why do we assume success only happens through growth? Because we can’t easily go back from growth. Not without downsizing, layoffs or things that hurt our ego, morale and even public perception.
We all wish we could do more. Every company wants to make more, serve more customers or have a more recognizable brand. The problem is, that never goes away. If you triple your size, your reach could still be bigger. If you’re a behemoth, you could still technically own more of a market’s share. The wanting of more exists at any size of a business. Instead, companies of one should use that feeling as motivation to see what more they can do with what they’ve currently got. Not through growth, but through ingenuity.
Capitalism requires bigger everything (numbers of employees, amount of gross revenue, etc.) and means you can conquer and dominate more of your competition. If you grow larger, you can acquire them or destroy them. None of this, however, benefits the end customer. None of this helps build long-term success.
What if we considered an alternative? What if growth wasn’t our North Star in business? I contend that we can create a company and run it in our own way, focused on what we want to focus on.
After all, if we are running a company and we aren’t happy with how it’s going, isn’t it our own fault? There is no playbook to follow, no letter of the law that’s immutable, just a continual questioning of: Is this working? Is this making money? Is this best serving my customers?