How Many Employees Does It Take to Make Your Company Successful?
When Scott Cook co-founded Intuit in 1983, it took a team of people, from software engineers to design the products and distribution specialists to place the software in retail stores.
Today, he says, the Internet has made it possible to run a successful company with fewer people, thanks to mobile technologies and outsourcing.
“With technology, it’s getting easier and easier for very small companies — even one-person shops — to be extremely successful,” says Cook.
A software firm today, he says, could consist of one person writing a program and putting it up on an app store to sell directly to customers. “You don’t have to have the organization that it took in our day, 25 years ago, to get started,” says Cook.
This applies to other types of businesses as well and other business functions, too.
With many industries, “you can get customers through word-of-mouth over the web so you don’t need multiple people in marketing,” says Cook. Other functions can be handled by outsourcing them or by using contract or freelance employees as needed.
These measures won’t work with all businesses, of course. Some industries don’t lend themselves to a leaner employee model.
“At a basic level, it depends on your industry,” says Cook. “If you’re going to run a chain of restaurants, you can’t do it with one employee. Or to be successful in the auto business you are not going to do it with one employee.”
But companies in other types of industries can be quite successful with small staffs.
As an example, Cook points to Dr. John's Products, founded by John Osher. In 1999, Osher worked with “a handful of people,” says Cook, to create “Dr. John's SpinBrush” — a $5 battery-powered toothbrush that the average person could afford, rather than the $70 electric models which at that time were the only alternative. To produce the product, Osher used contract designers and outsourced manufacturing to China.
“Because the price was so low, they got people to pick it up,” says Cook. Sales took off and attracted the attention of Walmart, which began carrying it; it quickly became the giant retailer’s best-selling toothbrush.
“Business was exploding, they had national distribution through Walmart — and they never had more than six employees,” says Cook.
In 2001, Procter & Gamble bought the rights to the brush for $475 million.
What Osher did “would have been impossible 30 years ago, but was very doable 10 years ago,” says Cook. “I think it’s only more possible today.”
Indeed, says Cook, “the ability of a one-person company to be a real success has never been more possible today, thanks to the tools of the Internet.”