A bit about my guest on today’s episode:
Lee LeFever is the author of The Art of Explanation and co-founder of Common Craft, the company known for being pioneers of the “explainer” video movement. He has created explanations for the world’s most respected brands and produced videos that have earned over 50 million online views.
Lee is a leader in the growing trend, now fuelled by the pandemic, that finds entrepreneurs questioning the personal cost of building large businesses. He believes in a healthier, saner approach to entrepreneurship that supports more than the bottom line.
In Big Enough, his new book arriving in September, Lee tells the decade-long story of building a scalable, two-person business with unconventional priorities in mind. Using a set of constraints, he and his wife, Sachi, designed Common Craft with happiness and quality of life as shareholder values. His inspiring story is evidence that bigger is not always better.
What we will be discussing today:
• The history and evolution of Common Craft
• How Lee built a scalable online business from home
• Why now is the time for entrepreneurs to think small
• Why time is the new wealth
• Quality of life as a shareholder value
Listen to the full episode:
Small Business is the New Big Business
So much in business strategy is about growing your business and making it the biggest it can be. But is that necessarily the right path for you though? Lee LeFever, co-founder of Common Craft, discussed his journey of building a scalable, small two-person business on the Fearless Business podcast, as well as how small businesses can be successful. Here are the highlights from the episode.
What is Common Craft and how it came to be
Common Craft is centred around educational videos to help businesses understand the online aspects of running a business. Beginning back in 2007, Common Craft is a two-person company run by Lee and his wife Sachi.
Starting off on YouTube, the videos soon became a viral hit. At the height of their visibility on the platform though, the pair decided to stop YouTube and move to their own website to be able to have licence over their content. The decision was also made as their videos weren’t about going viral or for entertainment, they are about solving a problem and educating people.
At the time, YouTube was not the best place to make a profit, as the advertising it has today was not there. Using the platform did allow Lee and Sachi to get hired by other businesses to create similar videos, including working with Google, which brought a lot of demand.
When competitors started to emerge, rather than getting into a price war, the pair created The Explainer Network, a marketplace featuring listings for other companies doing similar work for a monthly fee, which also brought more clients to them. The network went on for a few years, and allowed Lee and Sachi to work from home as a small business in a revolutionary way.
As for developing Common Craft to the success it is today and having high profile companies approach them over the years with little sales work involved, Lee says “I think the path to selling includes understanding that people don't buy what they don't understand. And I think there is a greater emphasis in real explanation like not just selling, right?”. If a product or service is not well understood, that is where their videos have come in to help people understand.
Working with a family member
With small businesses, you may find yourself working with a family member or partner, and maintaining a good relationship is important. A key to this is to know your values and be aligned with what you are working towards. There will be times you disagree and have different ideas about how to do something, but you need to have the same core values at heart.
Scaling a small business
So how did Lee and Sachi build a business from home? One of the main factors is to have constraints in your business, especially if you do not want to hire other people. Having constraints can “cut the noise” as Lee describes, and be incredibly freeing and give you a focus. Through licensing their own videos and offering paid digital downloads, Lee and Sachi were able to place constraints on their workload by making one product which sells multiple times and brings in passive income, while letting them remain a small business. Bringing in additional team members also brings in extra overhead and you lose time in actually having to manage that team.
If you feel like your business is growing and getting too big for you, and you want to actually scale back down, it is important to remind yourself of your core value or product. Are you overextending what you do? Does everything still connect well? Take yourself back to your values.
The importance of time and why now is the time to think small business
The pandemic has made people reflect on their quality of life and what truly makes them happy.
Having the biggest business or biggest amount of money is not where true happiness lies, and this is something you realise more when spending a lot of time working at home.
The most important things include spending time with family, having the time to do hobbies,and really be able to manage your time in a way that benefits you.
It all comes down to time, which is why small businesses could be the answer you are looking for as a way to still support your family and customers, while also having a business that works with your values and the things that truly matter.
Of course, setting up and scale a business brings around stress. Having those constraints in place, and really controlling what you do and don’t do, allows you to have a schedule that works for you.
Quality of life as a shareholder value
When you run a company, it is normal to have shareholders and you want to maximise shareholder value. This is typically in relation to money. When you run a small business though, it is only you and your partner involved. While you need to earn a living, you can also decide what you want to value. This could be things like time and having that work and life balance.
There is a theme throughout the podcast interview with Lee that if developing a big business is not a bad thing. If you want that entrepreneur lifestyle and have the mindset to build your company, then go for it. The power of small businesses should not be dismissed though, and it is entirely possible to run a successful and scalable business, while also making room for the things you value most in your life.
Check out Lee’s book ‘Big Enough’ released 15 Sept 2020
How to get hold of Lee: