Seth Godin is a bit nonsensical in some of his arguments for why small companies can compete against and even outperform larger ones (i.e. he cites the growth %’s of small companies compared to larger ones as evidence). Even though his latest book: Small is the New Big is just a compilation of his articles and blog posts, and does not have a unifying message (which I consider essential in a book) he does makes several good points regarding the effectiveness of small teams and I wanted to discuss a few of them here:

Small means the founder makes a far greater percentage of the customer interactions. Small means the founder is close to the decisions that matter and can make them, quickly. Small means you can tell the truth on your blog.

This may be the biggest benefit of smallness and is one of the key advantages Refactr has over traditional digital agencies and consultancies. The entire company is focused on the project during its engagement. There is is a real relationship between the entirety of Refactr and the client team. And yes, we don’t have to try to sound bigger than we are because we are not ashamed of our size.

Small means that you can answer email from your customers.

Another benefit of small is that you don’t have communication channels. Or more correctly the channels of communication are a circuitry connecting each team member with each other. No bottlenecks, no games of telephone.

Small means that you will outsource the boring, low-impact stuff like manufacturing and shipping and billing and packing to others, while you keep the power because you invent the remarkable and tell stories to people who want to hear them.

We are small enough to not have to worry about many of the things with which large companies must deal - administration overhead, interviewing, hiring, payroll, accounting, marketing, sales, we outsource any of these services that we need. Online payroll and benefits, external accounting and sales resources, and very low administrative costs all add up to more time and energy we can spend doing what we are passionate about, building great software.

A small law firm or accounting firm or ad agency is succeeding because they’re good, not because they’re big. So smart small companies are happy to hire them.

To succeed as a small company you have to be good. You are not afforded the “luxury” of being able to hire B, C, and D-teams to do the “less important project work”. Every project we take on is important and every project warrants and receives our best efforts.

The kind of project that’s “interesting” is now very different. It doesn’t have to be strategic or scalable or profitable enough to feed an entire division. It just has to be interesting or fun or good…

That is good news for us as we like to work on fun and interesting work and are able to choose work based on these merits and how they fit within our model, but it is equally important for the people who’s projects of which we are a part. Now entrepreneurs with a great idea are on an equal footing with large companies wanting to outsource a smaller project - each can take advantage of small, talented teams like Refactr and come out of the process with a great result. We have already had offers to take on additional resources or join larger organizations, but we have made a conscious decision to remain small for the foreseeable future for precisely some of these reasons above.