Why Small Business
Our COO Mark and I both moved to mid-Missouri from the Washington, DC area to join the Permanent Equity team. Before doing so, we both worked for a company that invested in large public companies, so making the move was a big change both personally and professionally. The east coast to the midwest; big companies with audited financials to small companies that in some cases are lucky to have financials. You might ask why we did it?
The simple answer is our shared observation that one’s opportunity for growth is directly correlated with the number of problems one has the opportunity to solve. It’s a strange epiphany, but if you have an infinite number of problems, you can achieve exponential growth. That’s because each problem, once solved, now means something is being done better/faster/cheaper, with those gains dropping straight to the bottom line and compounding over time.
By those measures, there is no higher growth opportunity than operating small businesses. So while it’s frustrating to get punched in the proverbial face over and over again, it’s a first-class problem to have so many problems.
The other aspect is agency. It’s a cold truth that the ability to influence something is inversely related to its size. If you were an investor in Amazon, is there a website optimization you could think of that they haven’t thought of yet? And if you could, how long might it take you to get Amazon to test it, let alone implement it? And if it did get implemented, would the benefits have a noticeable impact on the company’s bottom line?
Yes, breakthrough, trajectory-changing improvements can happen at large companies, but the odds don’t tilt that way. The introduction of something like a lead-scoring system to focus limited resources on the best prospects for a small business, on the other hand, can lead to exponential improvement almost overnight.
Of course, it doesn’t always feel that way with what can often feel like an unending parade of problems and new challenges constantly emerging alongside solved issues unsolving themselves. But when you take a step back to appreciate the chaos, you see that when it comes to having chances to solve problems to great results, there is no better opportunity set in the world.
– By Tim Hanson