Feb. 15, 2023

Debunking the Myth of Solopreneurship: Why Flying Solo Will Hurt Your Business

Debunking the Myth of Solopreneurship: Why Flying Solo Will Hurt Your Business

E18: Today, we are debunking the myth of solopreneurship. Yes, there are a lot of benefits to being a solopreneur. But nobody talks about the downsides of solopreneurship. I'm here today to expose the truth. I know because I was also a solopreneur when I first started my own business back in 2015. But since then, I've scaled up my team and my company has grown with it.

By the end of this episode, I'll show you how you can still enjoy the benefits of solopreneurship while removing the roadblocks that come with being solo. I'll explain how you should approach your hiring strategy and where you should look to find your best employees.

***
TOPICS:
Rise of Solopreneurship (1:46)

Two Hidden Costs of Flying Solo (6:03)

Strategies on Hiring Your First Employees (11:04)

The Important of Your Zone of Genius (12:11)

Hiring Freelancer vs. Hire Employees (14:34)

Ask Me Anything (19:45)


***
LINKS:

FreeUp
Shepherd

Episode 3 - Secrets of Compounding: How to Leverage Time to Grow Your Business
Episode 14 - I / We / They Framework: 3 Simple Steps to Growing Your Business

***
DESCRIPTION:
World-class entrepreneurs have one thing in common: they master the art of decision-making. Influential thinkers like Charlie Munger, Jeff Bezos, and Elon Musk all use mental models and frameworks to simplify complex problems. Join host Yong-Soo Chung as we dive into powerful frameworks covering entrepreneurship, self-improvement, and wealth-building that will unlock hidden growth levers in your business one week at a time. Listen & follow!

***
🔗 FOLLOW / REVIEW:
→ Follow
💜 Leave 5-star review

***
🔗 JOIN MEMBERSHIP:
🔓 FCF Membership

***
🔗 CONNECT WITH YONG-SOO:
🐦 Twitter
👥 LinkedIn
📬 Newsletter

***
ABOUT YONG-SOO:
Yong-Soo bootstrapped his business to near 8-figures over the past 7+ years. Now, he's on a mission to help creative entrepreneurs unlock the hidden growth levers in their business. Join us!

***
Our Portfolio Companies:
UrbanEDC.com
GrowthJet.com
SpottedByHumphrey.com

Transcript

What's going on everybody? Welcome to the First Class Founders podcast. My name is Yong-Soo Chung, and I'm the Founder of Urban EDC, an e-commerce brand serving the everyday carry community, and GrowthJet, a Climate Neutral Certified third-party logistics company. For the past 7 years, I built 3 companies in e-commerce and now my goal is to help you build your business.

Today, we are debunking the myth of solopreneurship. Yes, there are a lot of benefits to being a solopreneur. But nobody talks about the downsides of solopreneurship. I'm here today to expose the truth. I know because I was also a solopreneur when I first started my own business back in 2015. But since then, I've scaled up my team and my company has grown with it.

At the end of this episode, I'll show you how you can still enjoy the benefits of solopreneurship while removing the roadblocks that come with being solo. I'll explain how you should approach your hiring strategy and where you should look to find your best employees.

I'm also answering another question from our community about building a personal brand on our new Ask Me Anything segment at the end. So stay tuned!

All right, let's dive right into the world of solopreneurship.

Let's begin by defining what solopreneurship is.

A solopreneur is an entrepreneur who starts and runs a business on their own, without any partners or employees.

They perform all tasks related to their business alone including decision-making, operations, finances, and customer service.

There's been a rise of solopreneurs in recent years thanks to an explosion of no-code tools enabling anyone to go from idea to product faster and cheaper.

Now, it's easier than ever to spin up a beautiful website, design like a professional, publish your ideas, build an audience, and start monetizing.

No wonder solopreneurship has grown in popularity.

I took advantage of the rise of no-code tools starting my e-commerce shop, Urban EDC, back in 2015 on Shopify.

Shopify makes it easy for anyone to start an e-commerce store.

It took me just a couple months and a few hundred dollars to get my shop up and running.

If I had to build from scratch, it would have taken me a minimum of 6 months to a year paying a developer hundreds of thousands of dollars.

But it's not just these no-code tools that have emerged that's enabling anyone to become a solopreneur.

There are a lot of benefits to running a solo business.

You have no employees to manage, no investors breathing down your neck, and no time commitments.

You don't have to check your email or Slack constantly in case you need to respond to a request right away.

You can work at your own pace whenever you want, wherever you want.

If you want to go for a long walk during the middle of the workday, no one is going to fault you.

If you want to travel to Europe for a couple weeks and work from a cafe in Paris, you can do that too.

You are your own boss.

Sounds like a dream come true, right?

Yes and no.

While the benefits of solopreneurship are clear, there are some hidden costs that I don't see being talked about enough.

So let's dive deeper into these hidden costs.

I want to take you back to October 2015 when I launched Urban EDC out of my one-bedroom apartment in San Francisco.

I had just left my cushy 9-5 corporate job working for a hot blockchain company as a Software Engineer.

I worked tirelessly as a solo operator to get the shop up and running.

While there was a lot of uncertainty about my future, my new lifestyle felt refreshing.

I could manage my own time, be accountable for everything in my own business, and I could work from anywhere.

I remember back in 2017, when my wife and I traveled to London, Bourdeux and Paris, the Amalfi Coast, and Barcelona, the only thing I needed to operate my business was my laptop.

I could travel the world with my wife sightseeing breathtaking places.

I could open my laptop and catch up on my work while we relaxed at our Airbnb.

I had the world at my fingertips.

Was this really my new lifestyle?

I couldn't believe that I could travel the world yet still run my business.

But then my growth stalled after I hit about $1M in annual revenue.

Being solo, I was responsible for taking product photos, writing product descriptions, answering customer support emails, managing social media, writing the newsletters, and preparing each item for the 3PL fulfillment center I was working with at the time, back before I launched GrowthJet.

I could not get over this $1M hump for the longest time and couldn't figure out why.

I tried everything from increasing ad budget to tweaking landing pages.

I felt frustrated about my lack of growth.

Then one day, everything just clicked.

I started to see more growth.

I finally got over the hump.

So what happened?

I made the decision to build out a team.

This important decision changed the trajectory of my entire business.

So why did I give up all the benefits of a solopreneur?

Well, let me to explain.

But before I do, if you are enjoying this episode on so far, please tell one friend who is also looking to grow their business about this show. As you guys have heard me say a thousand times by now, word-of-mouth is the best way to grow a show especially in a medium like podcasting where there is no algorithm. So please, if you could, share this episode with just one friend right now. Thank you so much!

Okay, we're back.

So why give up all the freedom that comes with running a business as a solo operator?

Well, I realized that being a solopreneur sounds great in theory, but in reality, there are two big downsides.

The first downside is that it can limit your growth.

The second downside is that it can be pretty lonely.

Let's start with growth first.

When you're the only person running your business, there is no one else that can handle any part of your work for you.

Nothing gets done unless you do the work.

Just think about that for a minute.

Building a new product? That's you.

Email newsletter? Yup, that's your job.

Social media posts? That's on you too.

What about customer support emails? Who's answering those? You guessed it, you.

Everything falls on your plate and that can feel chaotic.

The bottom line is that solopreneurs are not utilizing leverage.

I talk about leverage extensively in episode 3 if you are interested in learning more.

So we talked about solopreneurship as a path to freedom.

Yes, but here's a little secret that no solopreneur will admit:

You can have even more freedom with a team working for you.

How? You need the right systems in place first. Then, delegate those processes to others.

You might even find that your employees are better at it than you are.

And that makes sense, right?

You're wearing a thousand different hats as a solopreneur.

You're bound to have weaknesses.

When I was a solo operator running my e-commerce business, I was the photographer.

I learned Adobe Lightroom and took photos of each item on my small coffee table in my living room.

I could only take these photos during a short window between 9 am and 11 am each day when the natural light came in just right.

Eventually, I hired a professional photographer who's still working with us today. His photography skills are way better than mine.

So once I figured out what type of photos I needed for my e-commerce shop, I put together a quick SOP, or Standard Operating Procedure, and told my photographer to run with it.

I highly recommend listening to episode 14 on the "I / We / They" framework that I developed if you haven't already done so.

In episode 14, I dive deeper into what types of processes and systems you need so that you can delegate effectively as you build out your team.

The important point is that you want to work on your business, and not in it.

Once you figure out what you're looking for, find someone else who is better at it than you are.

As long as your process is rock solid, you shouldn't have a lot of managerial overhead.

Now, you're using leverage to build your business while still maintaining the level of freedom you enjoyed as a solopreneur.

You can finally take a step back and work on other aspects of your business that'll help you grow even faster.

This simple shift in perspective was quite profound for me.

With this new approach, I finally got over the $1M hurdle that plagued me for years.

Okay, let's move onto the second hidden cost of solopreneurship.

When you're running solo, you're doing everything by yourself. Alone.

When I was working at a corporate job, I had co-workers I could bounce ideas off of, collaborate on problems together, and lean on during difficult times at work.

But being solo, I had none of that.

I remember at one point, I was so focused on growing my business that I went 7 straight days without talking to a single person face-to-face.

Remember that this is pre-pandemic, so 7 days without seeing anyone was not normal back then.

There were some dark days when sales were non-existent and I just had to push through on my own.

Entrepreneurship can be a lonely journey and if you don't have employees, you're all on your own.

Now, you might be saying to yourself, I have a supportive online community I can reach out whenever I need to.

Or, I have a partner who supports what I do.

And yes, that might be true.

But the truth is, they won't really understand what you're going through while you're down in the trenches pushing yourself forward.

Your team and employees know your situation. They know what's going on.

There's something powerful about a collective group of people working towards the same goal.

Okay, now, let's move onto some tactical strategies on how to hire effectively.

But before that, if you're enjoying First Class Founders, you should consider joining our Membership for just $9 per month. It includes a one-time introductory strategy session with me where we can deep dive into anything you want including growth tactics, scaling a team, or even brainstorming new business ideas that you've always dreamed of starting.

I would love to work together.

To join, head over to FirstClassFounders.com/join.

Okay, let's get back to strategies on hiring your first employees.

The first place I would start is look at any repetitive tasks that you have that don't require your expertise.

Focus on tasks that you dislike or simply not very good at.

For example, if you have some data entry to do each week, can you write up a Standard Operating Procedure and hand it off to someone else?

If you're creating content, could you find someone else to repurpose your content and publish them on other platforms for you?

These are low-hanging fruits that you can take off your plate immediately.

For example, for Urban EDC, we work with several people from the Philippines for our backoffice operations like creating product pages, entering inventory purchases into our Notion database, and tagging products on our site after we post them on our social channels.

Focus on activities that are repetitive and time-consuming, without a high return on value-add.

You should also feel energized by the work that you do.

And ideally, you're always working on something that you're good at.

Some of you may already know the concept of the Zone of Genius.

Psychologist Gay Hendricks identified four different zones of function.

Let's quickly review them now.

The zone of incompetence is where you are doing something you don't fully understand or are not very skilled at.

The zone of competence is where you are doing what you are good at, but there are many others who are just as skilled at it, so your your skills are not distinguishable in any significant way.

The zone of excellence is where you are doing something you are very skilled at. Often times, the zone of excellence is cultivated. Something that you practice and establish over time.

The zone of genius is where you're taking advantage of your natural abilities which are unique to you. This is the state in which you get into "flow." Not only do you come up with work that is distinguished and unique, but you also do it in a way that goes far beyond what anyone else is doing.

The most successful entrepreneurs are operating within their zone of genius.

Both the zone of excellence and the zone of genius are typically higher value activities so you should start with the other two when you look for responsibilities to offload.

Now, where do you find great candidates for your business?

There are three paths when it comes to sourcing candidates.

First, you can use your network to find a great candidate.

Ask your professional colleagues or co-workers that you've worked with if they know anybody looking for a job that fits your job requirements.

Typically, these are the best types of candidates because they're pre-vetted and they come as referrals from your own network.

Second, you can use a job board. With a lot of administrative tasks, I like to work with talented individuals from the Philippines. Their English is excellent and they understand the western culture well. Also, their cost of living is a lot lower so you can save a lot in labor cost by finding great talent from the Philippines.

There are job boards specifically catered to hiring in the Philippines such as FreeUp and Shepherd.

I've personally used FreeUp myself. I'll leave a link to both of them in the show notes in case you're interested.

The last path to source candidates is a recruiting firm.

This is the path that highly funded Silicon Valley startups use to boost their hiring.

Chances are, as a solopreneur, you're not going to be hiring a recruiting firm anytime soon, so let's move on.

Let's talk about some tactical strategies within your business when it comes to hiring.

So should you hire a part-time freelancer or a full-time employee?

Let's talk about the key differences between a part-time freelancer and a full-time employee.

A part-time freelancer is more cost-efficient because you won't be responsible for providing healthcare benefits or payroll taxes, which can add up quickly when you hire full-time employees.

However, they won't embody your values fully. And chances are, they are juggling multiple clients at once.

So they may be less accessible or less reliable depending on how they prioritize your relationship with them.

A full-time employee, on the other hand, is a bigger commitment so you're likely to find stronger candidates who are looking to build a career through your company.

This means that your company will start to build a reputation in the workplace and your employees will become part of your company culture.

Full-time employees are more expensive with just the added payroll tax, let alone all the additional benefits that you may need to offer to convince great people to work for you.

So here's my advice on hiring:

Start with part-time freelancers first focusing on the tasks that are outside your zone of genius and your zone of excellence.

Keep the responsibilities very specific and task-oriented so there's no misunderstanding on deliverables.

Next, as you grow your business, start bringing in full-time employees for your core business so they have a sense of ownership in their role.

Your core business areas will be those that either drive your business forward or an area you want to build a reputation around.

For example, if you're building a web development tool, you don't want to outsource development because your product is what will make or break your company.

I made this mistake back in 2010 when I worked with a development team in Ukraine for a web app that I was building.

The core business was our software and I was outsourcing its development.

Needless to say, that project failed leaving me with a large unpaid invoice during the Great Recession.

Aside from the areas that are part of your business core, you might want to strengthen your reputation in another area of your business and use that to differentiate your company from your competitors.

Customer service is a great example. There are companies like Zappos that bring customer service in-house because they believe that they are actually customer service companies that happen to be in the business of retail.

This perspective flips the script upside down where many companies de-prioritize their customer service.

My company, Urban EDC, for example, had an impeccable reputation for having the best customer service in our industry.

Then, we tried to outsource customer service for about a year working with a freelancer from the Philippines. Over time, we started to lose our strong reputation because there was a lack of ownership and accountability working with a part-time freelancer abroad.

We had issues with communication and our customers began to notice quickly. A few angry customers even left nasty reviews. This was not good.

So, we decided to bring customer support back in-house so that we could continue to build out our reputation as having the best customer service in our industry.

We made a commitment to make our customer experience a core pillar of our business to stand out from the sea of other competitors.

Okay, let's summarize today's lesson. 

Your lifestyle as a solopreneur might feel like freedom.

But there are two hidden costs associated with flying solo.

Your growth is capped and you'll be alone on your journey.

You can still have freedom when you build out your team.

Remember to have clear expectations in responsibilities and Standard Operating Procedures.

Start with part-time freelancers with specific tasks.

Eventually, as you build out your business, consider adding full-time employees for the core aspects of your business to increase accountability and ownership throughout the company.

One of the best decisions that I made was to build out a team and delegate not only my tasks but the decision-making at our company.

It may seem daunting at first, but if you hire the right people, you won't run into a lot of personnel issues.

Now, as we wrap up, here are some action items you can take with you from today's lesson.

Do an audit of the activities that you're spending on a daily basis.

Give yourself an hourly rate. You can start with a range like $1,000 per hour.

Then, with each activity, ask yourself if that task is worth less than $1,000 per hour of your time.

If it is, could you pay someone else to do the work for you while you work on growing your business?

When I started valuing my own time this way, I realized how much time I was spending on tasks that really should be delegated.

Now, of course, if you're short on cash or just starting out, you may need to work your way up to this. 

And that's okay. What's important is that you identify which tasks that you'll eventually offload and have a strategy for hiring.

Start planning ahead so that you have a playbook for hiring when you are ready.

Okay, it's time for our Ask Me Anything segment.

This question was submitted by one of our First Class Founders Membership subscribers:

"I listened to a podcast episode where you said you valued privacy. So what made you change your mind? Who would benefit from building a personal brand?"

Yes, so up until late last year, I respected my privacy and had no plans to be public about my life and business. With the world getting more connected, I valued being anonymous. What changed for me is the realization that building a reputation online can open up so many doors that you didn't even know existed in the first place.

It's like building your own web and increasing the surface area for luck. I did an episode on the science of creating your own luck and the most elusive type of luck is idiosyncratic luck. With this type of luck, good opportunities come knocking on your door because of the reputation you built within your industry. Luck finds you.

When I realized this, everything changed for me. I no longer viewed the world being so connected as something to be afraid of, but rather an opportunity to meet like-minded entrepreneurs and build meaningful relationships with others who are also ambitious business builders.

I'll link to the episode on the science of luck in the show notes if you're curious to learn more on the four types of luck and how you can become a magnet for luck.

Now, for the second part of the question, I genuinely believe that everyone can benefit from building a personal brand. If you're running a small business, start documenting your journey and share it with your audience. If you're running a law firm, you can analyze high profile court cases and provide your opinion on what you think the outcome will be. If you're working in corporate, start a side hustle and build your audience to share your journey.

My prediction is that in 5-10 years, nearly everybody will either be a content creator or aspire to be one because of the power of having an engaged audience.

I hope that answers your question on why I decided to build my own personal brand.

All right, that wraps up today's show. If you want to ask me a question like this, you can sign up for our membership at FirstClassFounders.com/join.

In the next episode of First Class Founders, we're talking to Kevon Cheung of Public Lab.

Kevon is the author of Find Joy in Chaos: How to Build Your Twitter Presence So Connections and Opportunities Come Find You. Kevon has a pretty interesting background where he failed at a startup before going all-in on building an online business.

Now, he's widely recognized as a thought leader in finding your voice and building meaningful connections online. He will share his PIERS framework for building an online reputation with authenticity.

You definitely don't want to miss out on this one!

All right, one last thing before you go. If you're a new listener and you enjoyed this episode, you can follow the show by going to FirstClassFounders.com and clicking your preferred podcast player like Apple Podcasts or Spotify. If you're a repeat listener, I would really appreciate a 5-star review. You can head over to FirstClassFounders.com/review to leave us a 5-star review. Thank you so much!

If you want to connect with me, I would love to hear from you. You can follow me on Twitter at @YongSooChung and let me know if you enjoyed this episode. I take feedback very seriously and would love hearing your thoughts on how to improve the show. You can find links to all my social accounts in the show notes.

All right, I’ll see you in the next episode of First Class Founders!