A different kind of success

In today's business world, there is only one story of success: Bigger is better. Yet, the majority of businesses are small.

How can it be that we have an understanding of success that excludes the 99%? Are they all losers? Or simply on a path to become big? Or can it be that "small" is a place worth staying?

In today's email, we'll:

1. Put numbers on the economic importance of small businesses
2. Offer an alternative success story

Small business numbers

Globally, most businesses are small and economically significant:

• 99% of companies are below 250 people (also known as SMEs)
• They account for ⅔ of employment in the private sector
• They account for 50-70% of GDP.

That's not to say that large and super large companies are not important for today's economies, but they are not as important as they (and the media) make them.

This is true across all continents - it's not an isolated thing.

An alternative success story

To go beyond the idea that "bigger is better", we need an alternative. 

That alternative is what we have coined "economies of small". The story comes in 3 parts.

First, it's the idea that there are unique characteristics of staying small that can become sources of strength, and that diminish and eventually disappear as you grow larger.

Second, it's a different way of seeing the world and your business in it. The world is inherently unpredictable, and you acknowledge that. Instead of trying to control and bend the world to your will, you value the art of listening to and adapting to the world. A byproduct of this is that you see costs and gains with a broad lens (what does it cost us all), rather than a narrow lens that tries to push costs onto others (workers, the local community, the nearby river, etc.) to make your company's costs lower. In this frame, costs don't disappear when you push them onto others.

Third, it's a different, broader way of looking at success, rather than always talking about economic growth, which can mean only one thing. You look at how to scale your impact, which you can do in many ways (growth is only one of at least eight).

You can, for example, scale deep and work to change the norms and values of a society; change people's preferences and behavior by showing them that they can do things differently, and helping them to do so (see Navdanya's work on educating and promoting regenerative farming in India, or Andelsgaarde in Denmark, and many others).

Or you can scale up and try to change the legislation, thereby changing the rules of the game (see iFixit's work on The Right To Repair or the Reduction Roadmap's work on climate legislation in the built environment sector).

Or you can scale by spreading methods and systems so more small businesses can work together to achieve great things together (we have an upcoming case study on Lubembo, which is doing this for small farmers in the DRC and Kenya).

In this perspective, success can mean many things, and there can be many ways to scale your impact. And, as our research shows, the small can outperform the large when you look at it this way, as long as they design for leveraging the economies of small. Or, put differently, if they instead of "thinking outside the box" think along the edge of it, the place where the business is growth-independent, the place where success and ambition meet capacity.

You can read more about that in The Edge Playbook's Chapter 8 "Build For Balance".