239: Paul Jarvis On Business, Happiness And Running A Company Of One

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Company of One is the argument that growth deserves to be questioned rather than assumed. Paul Jarvis is not against growth. He wants you to ask first whether a particular growth decision makes your business better, your revenue better, and your life better, because those three answers frequently diverge.

Paul has worked for himself for nearly 20 years, starting in web design for Fortune 100 companies and pro athletes before moving to online entrepreneurs like Marie Forleo and Danielle LaPorte, then to his own products. He now sells courses, books, software, and podcasts and does no client work at all.

I have to declare an interest here. My wife and I capped our own growth at a fixed percentage last year and have been considerably happier since, and I had felt like an outlier among entrepreneurs until I read this book.

Key takeaways

• Paul pays himself $75,000, matching research on the income above which more money stops increasing happiness.
• An Inc. 5000 study found most listed companies were gone five to eight years later, largely from growing too fast.
• Sean D’Souza of Psychotactics deliberately caps his business at $500,000 a year by limiting course spots and clients.
• Paul evaluates every new product by maintenance cost rather than revenue, and has sunset profitable products that demanded too much support.
• Acquiring a new customer costs five to eight times more than retaining an existing one.
• He doubles every time estimate, budgeting eight hours of work as sixteen hours of calendar time.
• More than half the people who have bought one thing from him have bought more than one.
• His first book cost him zero dollars, produced entirely through trades.

What Company of One actually argues

Paul’s position is not anti-growth. It is that no other business book, podcast, or blog says growth might not be the best thing, so someone should ask why.

His own version of the question came in his twenties, when he decided he wanted to make a million dollars a year at any cost. A few months in he was earning well and working 16 to 18 hour days with no weekends, and could not produce a good reason for wanting it.

So he switched the goal to making enough: cover his costs, put money away, stop.

The research he found while writing the book is that business does not always match the logic. A study Paul cites looked at the Inc. 5000, the list everyone treats as the definitive marker of success, and found that five to eight years later most of those companies were out of business.

The causes were growth-specific. They grew too fast, took investment they could not repay, hired too many people, and could not sustain the growth rate.

His structural point about why growth becomes a trap: the target always moves. Grow 5% this month and you want 6% next month, then 7%, until the number is absurd.

Bigger is not always better, and better is always better.

How much is enough

Paul pays himself $75,000 a year and pays his wife the same. That figure matches the widely-discussed research finding on the income above which additional money stops increasing happiness.

Below it, going from $50,000 to $75,000 makes you happier. Above it, $100,000 makes you no happier and sometimes less happy.

His business makes more than he needs. He lives minimally, and the things that make him happiest, like spending a day mountain biking with his wife, do not cost much on an ongoing basis.

His framing is that working out what enough means matters more than working out how to grow month over month.

Others doing the same thing

Sean D’Souza of Psychotactics caps his business at $500,000 a year, limiting the number of course spots and clients he takes.

His reasoning is that earning more requires working more, which makes him less happy and takes time from things he values, including tutoring his nieces. He likes his life as it is.

Paul also describes an illustrator who deliberately seeks good-paying clients rather than all available clients, so he can sit in his backyard studio and draw while his two daughters draw alongside him after school.

How to decide whether growth is worth it

Paul evaluates every addition by its maintenance cost rather than its revenue. His background is web and software, and he applies software thinking to everything.

Adding a feature everyone requested can mean charging more because of the development time, and hiring more support staff because that specific feature confuses users.

That calculation is why he sells the products he sells. A book has no tech support, so beyond marketing it generates money monthly without consuming eight hours a day.

His income comes from courses first, then book advances, then software, then podcasting.

Designing products to need less support

Paul treats courses like software, releasing a small alpha to people in his audience who buy everything, specifically to observe where they get stuck during onboarding.

Then he pre-answers those questions. Every support request gets logged, and once a pattern emerges he makes a video, blog post, or audio covering it, so he answers in volume rather than individually.

Introduction videos for his courses consist entirely of the questions alpha and beta users asked.

The same applies to his software, where he makes support videos so people can get answers without contacting him. A genuinely new question gets noted, and if it recurs it becomes content.

Each course has a Slack group, which takes roughly 10 to 15 minutes every other day. He genuinely likes his audience, so that time is not a burden.

The time budget that governs everything

Paul works no more than six hours a day, because he is not productive past that and because there are other things he wants time for. In his twenties working ridiculous hours he had no time for the gym, yoga, or cooking.

Before adding anything, he asks what it will cost in maintenance and whether it fits at all. His analogy is household possessions: bring something into the house and consider what leaves, so you do not end up buried in stuff.

He is direct that most entrepreneurs skip this. They have endless ideas and never account for the time each one demands, assume they work faster than they do, and are all bad at multitasking.

That accounting is why he has sunset roughly four courses and several software products. He sold WordPress themes making decent money and killed them because the support load prevented him doing anything else, and other things could earn the same with less maintenance.

Estimating time honestly

Paul doubles every estimate. Eight hours of actual work gets sixteen hours of calendar space, with the second eight absorbing interruptions, calls, a power outage, or a pet needing the vet.

He credits client work for the discipline. Microsoft and Mercedes were hiring Paul Jarvis rather than an agency, and the way he won that work was never missing a deadline.

Moving to products, he made himself the client and refused to let that client down.

Why existing customers beat new ones

Acquiring a customer costs five to eight times more than retaining one. For a business that is one person in a home office, the calculation is even more lopsided.

Paul’s example is someone he interviewed who worked at a magazine, a subscription business, where the entire company was focused on adding subscribers to raise revenue. Nobody was working on reducing churn among existing subscribers.

Cutting churn by a given percentage does the same thing as raising profit by a percentage, and it is easier, because those people already subscribed for a reason. Talk to them and find out what they liked or what stopped resonating.

They have already opened their wallets, which is proof something about your business is valuable to them.

Building the audience you actually want

Paul’s point that most people miss: you are not stuck with whatever audience arrives. You can actively build an interesting one.

His method is writing in a way that resonates with a specific person rather than appealing to everybody. He swears in his writing, knowing it puts certain people off, and knowing those are the people who would be angry at his products anyway. He tells stories about his pet rats as business parables.

His newsletter welcome email jokes that he was so excited you subscribed that he got your name tattooed on his inner left arm, which is on brand for someone tattooed from neck to toes.

Putting off the wrong people draws the right ones more effectively. He shows who he actually is as often as possible, which he describes as very scary, and the person in his podcast and newsletters is the same person in the paid products, down to jokes in software microcopy.

The result is that more than half the people who have bought one thing from him have bought more than one. He knows those customers by name from emails, payment receipts, and Slack.

Knowing them lets him work out what they need and value, and build products tailored closely enough that they buy without reading the sales page.

Doing things that do not scale

Four years before this interview, deciding what to write next, Paul emailed his list of 10,000 to 15,000 people offering 10-minute Skype calls to hear what they were working on and struggling with.

Roughly 40 or 50 people booked before he shut it off. He spent a couple of weeks talking to subscribers, and the pattern in what they described made the right book obvious after he had been floundering between options.

His second example is friends who founded Crew, a freelancer matchmaking service. They started with a MailChimp list in a spreadsheet, reviewing it manually, and only built software once revenue justified it. They sold for millions.

His conclusion: do things that do not scale until you can no longer do them, and then consider automating. Getting to know customers personally matters more early on than a 36-email sequence with segments and funnels.

How to start a company of one while employed

Paul would not quit your job first. He notes that non-entrepreneurs assume entrepreneurs are risk-tolerant, and he considers himself extremely risk averse.

His own transition kept the income streams separate. He had a successful client services business and wanted to move to products, so products became the side job, and he would not switch until products earned as much or more.

He divided the day in thirds: eight hours of sleep, eight hours of client work, eight hours of everything else. Sleep was non-negotiable, and he is explicit that people who hustle by giving up sleep are making a mistake.

The remaining third absorbed the product work, funded partly by giving up television. He and his wife had no TV, Netflix, or cable for about ten years.

The zero-dollar book

Paul’s first book, a vegan cookbook, cost him nothing to publish. He had an editor and traded her web design work. He needed food photography and had ugly plates, so he worked at a five-star restaurant for the tableware and traded the photographer all the food he made in exchange for shooting it.

His argument is that creativity thrives on constraints, and that with unlimited resources he is not sure he would have produced a better book.

He then reinvested only product revenue into products, paying his editor properly for the second book. Client work scaled down as product work scaled up until client work reached zero.

Why overhead equals death

The line from Paul’s book that resonated most with me is that overhead equals death.

My own version: keep it lean enough that if revenue went to zero I could maintain the business for about $50 a month. I am so anti-SaaS that if I can write the code myself in a week, I will, to avoid a monthly fee.

Paul’s framing is that people focus on the profit line and ignore expenses. Running the business for as little as possible means you do not need more customers to keep more money.

The deeper reason is peace of mind. A month off should not mean payroll and subscriptions draining regardless of whether you are working.

Paul’s version is not wanting more responsibility than necessary, which is his main reason for not hiring. He would feel responsible for employees’ salaries and their children’s college, and he is comfortable with responsibility without wanting more than he has to carry.

Relationship wealth and why pitching does not work

Paul deletes roughly five pitches a day from people he does not know. What he responds to is people doing interesting things who want to talk.

His business partner on one of his courses first contacted him as a student, asking for a virtual coffee explicitly stating she had nothing to sell and just thought he was interesting. They now work together because their skill sets balance.

The person who introduced us, Sol Orwell, is his example of a master connector. Neither of their businesses benefits the other. Sol saw Company of One coming out and offered introductions unprompted.

Paul’s point is that his first email to Sol was not a request for a podcast introduction, which would have been deleted.

His contrast is the growth-hacker email saying “I’m a big fan of your show and I’d be a great guest,” sent to a show that has never had a guest.

People can smell your intentions even when you think you are hiding them. Get to know people because they are interesting, give value, and something may happen later or may not, and either outcome is fine.

That matches my own experience. My business partner is someone I met randomly at a conference years ago.

The ego problem

I belong to a Stanford entrepreneurship program where friends have had nine and ten figure exits, and walking in to say I sell handkerchiefs and courses is genuinely intimidating.

Paul interviewed Jason Fried of Basecamp, whose observation is that saying you work at a two-person company lands differently at a dinner party than saying you work at one with 10,000 employees. The question is who you are trying to impress.

Basecamp’s profit per employee exceeds that of any Fortune 100 company. They earn enormously relative to headcount.

Paul’s position: he makes money and has a life he enjoys, and he would not hire people to sound better at dinner parties he would not want to attend if that were the only metric.

You can find Company of One at major booksellers.

Frequently asked questions

What is a company of one?

A business that questions growth rather than assuming it, staying deliberately small when growing would not improve the business, the revenue, or the owner’s life. Paul Jarvis’s argument is that better always beats bigger, while bigger does not always mean better.

What income level stops making people happier?

Research widely cited puts it around $75,000, which is what Paul Jarvis pays himself. Going from $50,000 to $75,000 increases happiness, while going from $75,000 to $100,000 does not and can decrease it.

Do fast-growing companies actually survive?

Frequently not. A study of the Inc. 5000 found most listed companies were out of business five to eight years later, specifically from growing too fast, taking investment they could not repay, and overhiring.

How do you decide whether to add a new product?

Evaluate the maintenance cost rather than the revenue. Paul has sunset profitable products, including WordPress themes, because the ongoing support burden prevented him from doing anything else.

Is it cheaper to keep customers or find new ones?

Retention costs five to eight times less than acquisition. Reducing churn by a given percentage produces the same effect as increasing profit by that percentage, and is usually easier since those customers already chose you.

How should you estimate project time?

Double it. Paul budgets eight hours of actual work as sixteen hours of calendar time, with the extra absorbing interruptions, calls, and the ordinary disruptions that always occur.

Should you quit your job to start a business?

Paul would not. He kept client work and product income in separate buckets, built products in evenings and weekends without sacrificing sleep, and only scaled client work down as product revenue scaled up.

Why does low overhead matter more than high revenue?

Because spending less means you need fewer customers to keep the same money, and because low fixed costs let you take time off without payroll and subscriptions draining regardless. Paul avoids hiring largely to avoid the responsibility.