Scale and Leverage

by seanlow on March 29, 2019

There is a ton of discussion these days about how to scale your creative business.  Dane Sanders does a great job of distinguishing solopreneurs from entrepreneurs.  The first is always dependent on the core artist and the second is where the organization serves the art.  Typically, a solopreneur is not scalable where an entrepreneurial enterprise is.  Scale means, in this sense, size and not leverage.  Maybe.

There are tons of solopreneurs that are very big businesses indeed. No matter the size though, they remain dependent on the core artist for survival. Entrepreneurial creative businesses on the other hand do not depend on the core artist but need not be very big businesses at all.

All of which leads me to a discussion of what is it that you actually want as an artist and creative business owner?  To scale? To leverage? Both?  Or neither?

Today as ever there is an enormous pressure to say that you will be bigger tomorrow than today.  Somehow, if you are not expanding you are stagnating.  This is a fools errand.  If you are making the money you want to make, doing the work you love to do, who is to say that you will love it more if you made more money, did more and bigger projects?  That would be no one that matters.  You have to ask yourself if the plateau you find yourself on offers the best view that works for you and your creative business.  If it does, stay there and work to clear away the brush the best you can.  Do what you do better every day.  Value is in knowing yourself and what matters to you.  See Jiro Dreams Of Sushi and you will understand what I am talking about.

No, the ONLY time to think about scale and leverage is if you are trying to get to a new plateau and are stuck.  Then the view is boring and it is time to move on.  But moving on requires contemplation about who you actually are and whether you are ready to scale or leverage or both.

Scale first.  Getting bigger — both to serve more clients and/or do larger projects requires a deep understanding of the shift in promises you are making.  You need infrastructure to support that new promise — staff to become ever more specialized and themselves entrepreneurial, a larger capital base (i.e., more money) to provide necessary products and services to this new client, and, most important, the financial wherewithal you will needs as you switch away from your current core customer.  There will be a dip as you say to your current clients that those who do not value the new focus will be left behind.  By definition, they will be angry.  You are specifically telling them that you care about someone else more than them and you are leaving them behind.  No change happens without pain and this will be it.  The only reason you would ever be willing to go here is if you believe in what the future will bring with the new you.  Think about how much Netflix angered its base in 2011 when it even considered splitting its DVD and streaming businesses.  Netflix back-tracked then but as we all now know today plowed forward into streaming and original content production as the primary drivers of its business.  There is no crystal ball and the impetus of change has to be the compulsion of faith and not the satisfaction of expectations that deep down are not yours.

Leverage. Ronald Reagan v. Jimmy Carter.  Today, there is an idea that you have to spur entrepreneurs within your organization by giving them both authority and responsibility.  And if you are the creative business owner that can do that, wonderful.  The underneath though is that, if you cannot, there is an expectation that you have to.  Absolutely, positively not.  Having your fingers in it all and being responsible for every moment is perfectly fine if that is the expectation you have set for yourself, your employees and, most of all, your clients.  That does not mean that others will not be involved but that all roads lead back to you.  This is an empowered choice if you go there and it truly harkens back to the days of a guild with a master craftsman and apprentices.  Just be straight about it.  Let employees know the value of your training and let them know that there will be an expectation that they will one day leave your nest to build their own.  Why not provide a backstop by way of infrastructure to help make that happen for them?  What would it look like if your creative business was an incubator for employees as much as a provider of amazing art?  Better than an unenforceable non-compete.  Legacy can be in the stars of tomorrow that you have helped establish.  Robert M. Stern anyone?

For those who are able to seek leverage, demand leverage.  Turning employees into owners demands that they have an ownership stake in what they do.  Defined return for entrepreneurial success.  It is not about you, it is about the organization and what everyone can individually achieve in it as it gets stronger and stronger.

At the end of the day, focus is on where you are today and whether you really want to be different tomorrow or just a better version of what you are today.  A distinction with a huge difference and equal value in the ability to own and execute either.  Own your choice and stay there until you are truly ready, if ever, to make a different one.

Previous post:

Next post: