Small is Beautiful
I come from an entrepreneurial family. My great-grandpa started a business making wooden blinds for windows. My grandpa and my father turned it into a reality with 97 years of uninterrupted history. Never, in all these years, have they laid off people.
The company is confined to a small area between a railway, village houses, and a street. My grandpa used to say that this, my dear grandson, is our biggest luck. Never understood why.
Until now, my friends...
As an ordinary young adult, I tend to ignore my elders, only to confirm what they had told me all along after having had my own experiences.
The lesson for me was to embrace constraints as a gift. The railway, the houses, and the street forced my family to keep the company small and efficient, and to focus on quality, service, and human relationships.
I came to understand what small means, namely:
- Being able to face challenging times by being agile and lightweight.
- Developing deep & genuine human connections with suppliers, customers, employees, and your community at large. Such connections will have your back, even if it does not make financial sense for them.
- Staying humble and grounded, close to the work, and true to your values.
- Being able to manage your company without relying too heavily on abstractions. Metrics like financial ratios or KPIs can quickly detach you from the humans who ultimately make up a business. That disconnect can dehumanize your relationships and turn them into transactional ones, whose value is inherently short-term.
- Staying in control of your pace and vision by not having to answer to external investors whose goal is a return on their invested capital.
All this appeals to me as a great ideal of what entrepreneurship should be, but it comes with some important facts I had to realize:
- You need radical ownership. Owning doesn’t mean holding 51% of the shares. It means fully owning the outcomes, whether they are good or bad for you. My family’s version of this is: “Business goes well, (potentially) take money out. Business goes badly, put money in.” Another way of putting this is: Owning the reward is justified only if you also own all the risk.
- You need radical responsibility. This is the other side of the same coin. You are responsible for the human relationships that make those outcomes possible, so you have to look after them. Sometimes that means giving more than you get back. It can mean putting your own money in to pay salaries when there’s no other way to cover them. It can also mean not firing someone who is underperforming because she’s going through a hard time personally.
All of this comes down to thinking long-term and optimizing for stability, sustainability, and humanity. This vision is fundamentally at odds with entrepreneurial philosophies that favor quick exits and fast gains, and, in my opinion, it's a more genuine form of entrepreneurship.
This doesn’t mean I don’t respect other kinds of entrepreneurship, though. Often, being this radically responsible simply isn’t possible. Mine is a vision, something to strive for.
PS. Consider all of this a work in progress, much like the person writing it. I’m happy to be respectfully challenged on any of it.
Credits:
- Small Is Beautiful: A Study of Economics As If People Mattered by E. F. Schumacher (I stole the title from this great book, which has been a huge inspiration)
- Rework: Change The Way You Work Forever by Jason Fried and David Heinemeier Hansson
- My family
- My mentor Alberto