Scaling Talent: Simplicity-Driven Entrepreneurship

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Something’s been bugging me about the E-Myth…

Don’t get me wrong, Michael Gerber is clearly a very smart guy, who’s added a lot to the discussion and advancement of small business systems and success. Most people who start businesses are artists, technicians or thinkers who are passionate about a particular subject area, but are often less passionate and far less skilled at the process of growing a business.

And, for so many, that leads to some combination of passion-workers taking on business roles they neither want, nor are good at, leading to unhappiness, and, often, business demise.

Gerber’s solution, in his E-Myth books and programs, has been largely to scale back to doing what you’re good at and build systems and recruit people to handle what you hate doing and very likely bad at. In doing so, you gain the potential to reap the financial rewards and freedom that come from scaling a businesses beyond the limits of your own special abilities and interests.

Sounds great. In fact, I’ve built, grown and sold a few small businesses this way myself, the last one allowed me to work maybe 5-10 hours a week, while drawing a substantial income.

But, as I get a little older, something’s been bugging me about this model…

And, it really came to a head during a conversation I had with a friend down at SXSW in Austin last year. At the time, he was the co-founder of small, virtual design and interactive consulting company. At a little over 30 years old, married, but with no kids, his goal was to figure out how to scale his company as quickly as possible, taking on more clients, employees, physical space and becoming a big name with substantial operations.

As he spoke of his vision, I began to giggle and he asked why…

I said, “I’ve already started and grown a few companies, with leases, employees, overhead and more. And, now in my 40s, my biggest quest is to figure out how to continue to do what I love, grow my income, but dramatically reduce my level of daily complexity, overhead, management and…stress.”

It was a bit of a pivotal moment for me, because I knew I’d likely be selling my own company soon (which happened in December of 2008) and this realization would mean approaching the next leg of my adventure in a very different way.

Because, I don’t want to be rich…I want to be “Simply” Rich.

You see, no matter how good my colleagues, management team or employees were, how capable my advisers were or how good a lease I had, as the head of a business, I was still the guy with his bank account and reputation on the line, with the responsibility to serve my community of both clients and employees. And, if you truly care about your business, all the systems in the world won’t relieve the mental burden of traditional, systems and people-driven growth.

And, I happen to be unusually risk tolerant. I’ve been an entrepreneur the better part of my life. I’ve won big and failed big and recovered enough times to know I can survive both. So the exposure isn’t really the issue for me. Nor is fear of failure.

It’s more about reaching a time in my life where “size” doesn’t really matter…

That’s not how I measure my worth, impact or success. It’s more about:

  • Building a substantial living around the activities, people and settings that make me come alive
  • While reducing complexity, management, oversight and overhead as much as possible

I call this approach, “Simplicity-Driven Entrepreneurship™ (SDE).”

It’s about scaling my talent in a way that gives me the “consistent revenue” of a well-structured, systems and people based company, without the ever-present subconcious din of actually being the final word for everything that happens in that company. Some people love that din, I used to. And, heck, maybe I will again down the road. But, right now, not so much.

So, as I begin moving into my next great business adventure, I’m seriously considering a very different approach to growing my living. A way to leverage and scale a particular talent or passion that has the potential to generate substantial revenue, but not take on the same overhead and management burden of growing yet another traditional company.

Simplicity Driven Entrepreneurship is about scaling talent, without scaling complexity.

A key different between the SDE approach to entrepreneurship and the systems/people approach is the way you scale your talent or passion. Rather than scaling vertically and building a company with systems, levels and people around you to do the jobs you don’t want to do or are just plain bad at, you scale vertically and look for ways to keep the “business” as small and simple as possible.

You get hyper-creative and work, instead, to leverage your assets and passion in a way that allows for a substantial bottom line income, but with far less stress and complexity than what normally comes with even a well-executed systems and people driven company.

What are some examples of SDE-driven choices?

  • Choose licensing over manufacturing – Rather than taking on the burden of manufacturing a product, license the idea, let someone else build it and take a cut.
  • Choose certifying over serving – Instead of consulting or setting up a consulting company, where you oversee the work of a team, teach people to do what you do, then charge them to learn and, if it makes sense, take a piece of their success
  • Choose virtual over brick and mortar – go online, distribute and tap technology, rather than lock yourself into long-term brick and mortar commitments
  • Choose commodotization over customization – Tap technology, techniques or business formats that allow you to create intellectual property once, then commodotize, distribute and benefit from it many times.
  • Choose outsourcing over hiring – Hand over as many processes as makes sense for your venture.

A perfect example of this is a friend of mine, Harlan Kilstein, an A-level copywriter, marketer and NLP madman who makes a huge living, but works in an office a few minutes from his house, has one assistant and if he didn’t do 3-4 hours of yoga a day (in the dedicated yoga space in the office), he’d likely make a lot more. But…to what end?

Simplicity Driven Entrepreneurship may not be right for everyone…

I work hard, always will. So, SDE isn’t about working less.

But, I’m at a point in my life where I feel like I’ve proven what I need to prove and I really want to craft my living around a simpler way of life. That doesn’t mean accepting a lesser living or income. It just means stripping it down, simplifying to give me the ability to do what I love, make a great living and remove as much complexity, oversight and stress from the process.

I don’t need to go big, I don’t care about size, I don’t need everyone to know my name…

I just want to be able to work with passion, live well in the world and have the mental space to enjoy what I’ve got when I’ve got it. And, for me, that’s about adding the conscious quest for simplicity to the pursuit of passion and prosperity.

How’s it going to work? Dunno. I’ll let you know as things unfold.

And, as always, I’m just thinking out loud.

So, I’m curious. What about you?

Where do you fall in all of this?

What do you want to create?

Let’s discuss…

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35 responses

35 responses to “Scaling Talent: Simplicity-Driven Entrepreneurship”

  1. Todd Smith says:

    Hi Jonathan, I hear that. I think it’s been my dream for a long time to get to this kind of space – of being “simply” rich. My question comes in the start up phase (does it ever end?): How do you keep a reign on time consumption when there is so much to do in the beginning? It seems like you have to dive-in to get started. Was this your experience? Or were you able to live a paced life throughout? Thanks.

  2. Adam King says:

    Jonathan,

    You’ve just put into words what I’ve been seeking to clearly define. Like Todd, I’m seeking to make a living and a lifestyle that centers around my talents, I’ve struggled to clearly define it’s underlying goals and purpose. This has just helped me do that. Thank you for putting down the words that express my intentions.

    Create a simplified business that generates the highest revenue possible. Like you said, it doesn’t mean “not working” it means working in ways that you love and suit you the best.

    Thank you. Terrific article.

  3. Pamela says:

    Really great piece! What it points out (which most people don’t think about consciously, myself included) is that there’s a difference between a substantial business and a substantial living. Happy to see that intuitively I’ve been heading toward the ‘substantial living’ model, despite being a big fan of the e-Myth (my business lends itself to licensing and certifying).

    One point I disagree with though– even in the SDE model, as the creator of the business you are still the final word of everything that happens in the company– it’s just that who’s asking is different. License partners need your approval, outsource vendors need your input, certified resellers need monitoring, etc.

    I think if you want a “substantial income”, you can’t get away from being the guy (or gal) with the bank account and the reputation on the line. You still serve clients, they’re just different ones (i.e. JV partners instead of individuals). The main benefit of what you’re outlining is eliminating the employee/staff part of business (huge, to be sure).

  4. Tim Baran says:

    Spot on article! My RSS feeds number in the hundreds per day so I only have time to quickly skim the results and read the most interesting and relevant articles. Like this one.

    All I read about re: startups is advice to outsource all functions, but what about if, as I’m sure is the case with most solos, you simply don’t have the capital to do so? Most of us going into these ventures understand and accept the reality of being consumed by the process of developing our passion.

    It’s been over six months since I’ve taken the leap and it’s been a totally consuming, frustrating, rewarding experience. I know exactly which responsibilities I will outsource but don’t have the capital to do so right now. And, an important point often overlooked, is that obsessively learning and creating and failing allow us to know what and how to ask for help.

    Thanks for this provocative article that I’m sure will strike a nerve with many. Keep ’em coming!

  5. Jonathan Fields says:

    @ Todd – Great question. My experience has been that the start-up phase of any venture is unbalanced and takes a serious burst of time and energy to reach critical mass. Question is whether you have a plan to move as rapidly as possible from that into something more humane or not. And, also, whether you want to make that jump. Some people are good going 1,000 miles an hour with their hair on fire for long periods of time. That’s not me these days.

    @ Adam – No doubt, I work really hard and I love what I do. And, I love working hard, it’s really about controlling the scale-factors that add the most complexity and stress to the equation and seeing if you can go about growth in a different way. Sometimes the answer is yes, but I’m guessing certain businesses will be harder to scale for simplicity, too.

    @ Pamela – You’re absolutely right, you are still the final word on everything, there’s no way to eliminate that, if you care about the outcomes you’re working toward. It’s more about the choices you make in the way you grow your venture.

    @ Tim – Outsourcing is one way to handle the scaling challenge and that may take some real money. Other times, commodotizing knowledge, packaging it and selling it holds the answer. And, sometimes, you can even two-step it, commoditize and sell knowledge to raise enough money to then outsource certain functions.

  6. Love it Jonathan- One of the concerns I’ve had as I try to grow this Simple Marriage business is if it grows too big, I will no longer be able to live a simple lifestyle because there would be more to do.

    You are so right in the thought of doing what you love and are passionate about is a better way to go, at least for me. It may not make me rich, that’s not the point. It will be more satisfying – at least it is thus far.

  7. Shawn McCormick says:

    I’ve been thinking about this for a while – how to build a business that suits my lifestyle and allows me to do what I do best everyday. I still haven’t figured it out, so I’ll watch keenly from the sidelines as you progress!

  8. Joe Jacobi says:

    Loving the SDE concept and looking forward to the continuing discussion. Two quick thoughts came to mind while reading:

    1. We’re so close to our own situations that you need to find ways to step away from your current pursuits to see if you’re closer to “Simply Rich” than you think. This is finding your own unique ways to self-evaluate.

    2. SDE should become a natural extension of SDL – Simplicity Driven Living. That doesn’t mean leaving the city and heading for the rural hills (like we did) but it does mean understanding and taking control of your life parts that you and soley you affect. If SDE is a small piece of a larger world that is frantic and dominated by outside forces beyond you’re control, this would be a struggle.

    As always, great thoughts, Jonathan, and thank you for sharing them.

  9. Jonathan you’ve captured in words exactly the banter in my head lately! Balance and passion sum up what I’m working towards and admittedly Fridays free of hassle so I can swing at the park with my 3 year old!

  10. Allan Bacon says:

    Jonathan – great post. Very well stated & great food for thought for folks who are dreaming about start-up glory.

    I wanted to add that for those who are still in their corporate jobs, the analogous change is from management back to a (highly paid) individual contributor role – could be a senior staff role, or a strategic role.

    This is a good “bridging” strategy to free up time while you build your new venture after hours, and also can be a lifestyle choice for those who dont’ want to go it on their own…

  11. Jonathan, I think my purpose was a bit muttled in the beginning of my quest to simplify. I was going down the wrong road and didnt realize it. Instead of simplifying and being able to make a living from home, I set myself up for more work.

    Getting my true values in order, igniting my passion with their guidance, and pressing ahead with a new plan has made this a journey worth taking. The book helped. I just gave a copy to an embattled friend.

  12. Love the concept, this will become a movement.

    Lets begin…

  13. You’ve captured this very well, thanks. I also am aiming to trade size and centrality of my name for increased sanity and focus in the things I actually spend my time on. I think you have to build this way of thinking into your plans and structures from the beginning; it does take a bit of a shift in thinking. In addition to the examples you list, I would add choosing flexible project-based alliances over formal partnerships when working with others.

  14. Winnie Lim says:

    Reading this post reminds me of the core reason why I am insistent that I do not want to ‘expand’ my business in the traditional sense – from being a freelancer, growing it into a small company – I chose go solo.

    I have to admit there is a certain temptation to expand, mainly because there is only so much one person with a fixed number of working hours can earn, but I am not willing to give up that degree of freedom with only a single person as an overhead.

    Creatively, the bigger the company grows, there’s a tendency to lose the creative freedom, with an expanding overhead and tons of livelihoods to consider when you make business decisions.

    For passion driven people, I feel that once a certain amount of material success is reached, anything beyond that will start to feel meaningless. After all, what comes after achieving a comfortable lifestyle with material possessions?

    I guess apart from working for a passion, it is very much more meaningful to contribute to the greater good, even if it means only one other person will find value in what you do, it makes a world of difference compared to working for oneself. My two cents. 🙂

  15. Gail Grossman says:

    This has always been my thoughts, and yet I get sucked into the “busy”ness of the business. I so agree that simplifying is where it’s at, and I love your thoughts on this. I have been working towards that direction for some time now! I guess I didn’t even realize it! Thanks for putting it so clearly as usual!

  16. I see a great amount of potential in one of the points you raised: choosing virtual over brick-and-mortar. In today’s technological age, the value of this decision is sorely understated, and the rewards that can come from this decision are astronomical. People have a hard time picturing something that isn’t concrete, but this is the key to producing innovative, creative thinking that will surely lead to simplicity-driven entrepreneurship. Think outside the box – because everyone else is thinking inside it!

  17. Jonathan
    i am a longtime reader of your blog and a fan – AND this post is my favorite so far. Spot on. Some of the best ways to be “simply” rich are top partner with people you respect and enjoy to co-create, bundle or otherwise collaborate on some template you can keep honing over time, making a bigger pie through others’ involvement making it grow – for a share of the revenue.
    Example: I bought back the rights of my first two books, partnered with the former (there’s going to be an increasing number of “formers” in this bad economy) foreign rights editor to templatize my books. That is we approach consumer-serving company CEOs in India, Japan, Brazil (so far) to co-author the book(s) by inputting local quotes, examples ,etc. (with our help) then publish the book in their country under our imprint (printing in the same printing firms that print for publishers), with the CEO covering the first run with a quantity buy to distribute to employees, customers and media in a custom version of a template promo campaign.

    I get my cherished foreign travel to share in the promo campaign… seeing their country through their eyes…. we both make money.. the CEO gains media coverage for a new facet of their brand image – and for their firm….

    I wrote about ways to hone templates of work to accomplish more with others, in less time, at moving from me to we. Came up with the idea via jake, an avid wine bar owner. Your approach to a workstyle should inspire so many people to see what really matters to them, to use their best talents more often, to feel a sense of renewal and control over their work … and to spend more time with the ones they love.

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  19. […] Scaling Talent: Simplicity-Driven Entrepreneurship by Jonathan Fields […]

  20. Dee Wilcox says:

    Wow, I really enjoyed this post. My husband and I launched his freelance business into a full-time gig last fall and have had the “E-Myth” philosophy recommended to us by many trusted friends and advisors. We listened to the audiobook during a recent trip to Nashville and really enjoyed it. However, I like what you are saying so much more. I’m not sure my husband is there yet, but I’ve had enough stress and don’t really care to take on a lot of overhead in stress. I’m more interested in leveraging my talent in a smart way so I can live the life I want to live, rather than living for work…. You should write a book about this, Jonathan. I think it would be really excellent and would speak to a lot of people right now.

  21. I share the desire for simplicity. I don’t even care about being rich, just simple, creative, and in charge of my own operations.

    With a couple of kids to spend time raising, if I can design a few websites a month, keep the heat on, the fridge full, and stash something extra away, I’m happy with that for now.

    Funny thing is, I don’t rule out going back to running around 1000 miles per hour with my hair on fire (great line, by the way) to try and build something bigger in the future when they move out on me. That wasn’t all bad, just doesn’t work for me right now.

  22. Jodie says:

    I was with you until about halfway through when you talked about subcontracting. For me, that adds the same level of stress that employing people did, but with far less control. I’m going the technologist route, specializing in creative ideas and design, and re-learning some basics so I won’t have to rely on anyone else…

  23. Dustin says:

    Jonathan,

    I’m completely on board with you on this. Technology has made it possible to simplify entrepreneurial pursuits. Although there is a learning curve to understanding how to leverage technology as well as things like licenses and what not I believe it is a worthwhile pursuit.

    I’m also a huge fan of Career Renegade – it inspired me to start a blog called Beating the Grind which then led to me pursuing further web design and graphic design skills which I plan on using to create a e-business consulting company.

    Thanks for the info!

  24. […] the brilliant people on the Beyond Productivity calls, Naomi Dunford, Mark Silver, Steve Spalding, Jonathan Fields, Chris Guillebeau, Pam Slim, and Clay Collins. It started before Tim Ferris, but he made the […]

  25. […] L’entrepreneuriat orienté “Simplicité” sur Jonathan Fields Les 10 commandements de la finance pour vos 20 ans sur Kiplinger Les 10 commandements de la finance pour vos 30 ans sur Kiplinger […]

  26. I have read a lot of your posts and I have to say that this is one of the best. SDE is actually what I am doing with my internet business. The problem is that I tend to work a lot to get it to work. If I ever have it up and running I will definitely start working less and making it simpler.

  27. […] Jonathan Fields author of “Career Renegade” wrote on his blog yesterday about Simplicity Driven Entrepreneurship (SDE). […]

  28. […] Scaling Talent: Simplicity-Driven Entrepreneurship | Jonathan Fields http://www.jonathanfields.com/blog/scaling-talent-simplicity-driven-entrepreneurship – view page – cached Something's been bugging me about the E-Myth… Don't get me wrong, Michael Gerber is clearly a very smart guy, who's added a lot to the discussion and — From the page […]

  29. […] Scaling Talent: Simplicity-Driven Entrepreneurship – Something’s been bugging me about the E-Myth… Don’t get me wrong, Michael Gerber is clearly a very smart guy, who’s added a lot to the discussion and advancement of small business systems and success. Most people who start businesses are artists, technicians or thinkers who are passionate about a particular subject … […]

  30. Simplying work by delegating some hard task to other people will not only destress you life but also give more time to other productive tasks you are likely to excel with. Like Henry Ford, he became successful because he knew how to use other people’s talent to reach his goals.

  31. […] I plan to keep things small, but do big work. I’m energized by the idea of scaling talent, in the model Jonathan Fields describes as Simplicity Driven Entrepreneurship. […]

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  33. Rebecca says:

    Thank you, Jonathan!!

    I knew from the beginning that I didn’t want to scale my freelance business into a full-fledged company with employees and all that entailed. That would put me right back into the corporate world I had left! I love being independent, flexible and responsible for my own work, able to take vacations and travel on my own schedule, and work from anywhere. When we start on a new venture, we’re often so focused on becoming “successful” that we forget to define what success means to us. I like the idea of partnering with people and creating a “virtual team” you can call on when needed.

    I also love the part where you “giggled.” Made me smile, too!

  34. Jonathan —

    Great article. Having had a bank account and several loans (with a house on the line as collateral), I sincerely agree with all of your points.

    “Four Hour Work Week” by Tim Ferriss describes SDE in detail, with some very specific pointers on how to achieve SDE.

    However, I think that it is important to note that many people start businesses (whether or not that business has several employees, leases and whatnot is immaterial) so that they can do more of what they love, day-to-day. For example, as a web designer, photographer, or computer repair person, you might be better off financially by training others, but in doing so, you might lose the time to do what you really love — eg photography.

    It’s important to love what you do every day when you go to work.

  35. […] Internet is a funny place where New York and Culebra are just as close to Vantaa as are Jyväskylä or […]