It may sound counterintuitive, but sometimes the perception of success is a hidden force that can hold your business back. You think that because you have so much work coming in that you’ve achieved your end goal. But what if there could be more? What if you can build something that can live beyond your day-to-day involvement and maybe even your lifetime? Unlocking the next level requires a business owner to think not just about success in terms of today‘s profits but also in terms of the longevity of the business itself. Can it survive if you are not around?
Our friend Sheila Jordan, an Atlanta learning technologist, confronted this question a few years ago. With her firm Knowledge Architects, starting in 2010, she carved out a lucrative niche managing instructional learning for some of the biggest transit systems in America. Her manuals and e-classes teach workers like bus and train mechanics in major cities, including New York, Dallas, and Atlanta, how to repair and maintain rapidly modernizing equipment. The business employs twelve full-time employees and generates $8 million in annual revenue with multi-year contracts across the country.
As Sheila gained more customers, she struggled early on to find and onboard the right contractors to staff projects. She wanted to keep taking new clients but couldn’t clone herself to serve them all. As a “one-woman show,” she realized the business was growing so fast that she didn’t have the right internal processes to manage new hires. It was stressful. But Sheila soldiered on. The daughter of two janitors with little education beyond elementary school, she was the first in her family to earn a college degree. Growing up in the 1960s in Oakland, California, she could only dream of a life beyond her family’s crowded apartment, let alone being at the helm of her own multimillion–dollar company. Her mom and dad worked the night shift at a suburban Bank of America, and every afternoon while she did her homework, Sheila also cared for her nine brothers and sisters.
“There weren‘t a lot of opportunities. There weren‘t a lot of role models. Out of sheer survival and wanting to just do better . . . it just pushed me outside of my box,“ Sheila told us, as she reflected on how she persisted, earning college and graduate degrees driven by a desire for a more stable life for herself and, later, her own two daughters.
On the surface, Knowledge Architects seemed to be everything Sheila could ever want. She had leveled up. But only to a point: the business had not broken from the tether of Sheila needing to manage it 24/7. If she decided she was done with consulting, the company would have died. To survive, she would need to think about succession planning, either training someone to take it over or selling the business. Or she could find a way to make money while she slept.
It took a chance conversation over a chicken dinner in 2015 to help her realize she could unleash a whole new level of her business. When a man sitting at her banquet table mentioned his company had worked on a project for General Electric building a 3D model of a train, bells suddenly went off in her head. Sheila realized she could turn her consulting services into an actual product. She was already experimenting with augmented reality and 3D tools. The ability to enable a mechanic to learn on a digital model how to disassemble and rebuild complex pieces of equipment was revolutionary. But what if Knowledge Architects could find a way to develop its own educational software, host the curriculum on its own server, and license it to companies? She could scale her firm in a way she never could as a solo operator by creating an entirely new revenue stream that would not depend on her services alone.
In 2018, she launched AR4Traannsit, the world‘s only Content as a Service (CaaS) platform that delivers augmented reality work instructions for the transit industry. She was able to pay for the development of the technology by leveraging the cash flow from her biggest customers. Three of the transit agencies her company was already serving invested $650,000 in a five–year revenue–sharing deal that allowed her to launch a pilot. Eventually, Sheila will seek to raise more outside funding. She knows it will be a challenge given the fact that companies led solely by women raised less than 2.2% of venture dollars, or $2.6 billion in the first eight months of 2021, a decline from each of the last five years. And just .034% of VC, or $494 million, went to female founders of color, according to data compiled by Crunchbase. But she is charging full speed ahead.
We are not saying that everyone must come up with a brilliant tech startup idea to scale their business. But Sheila’s story shows how it’s important as a solopreneur to choose whether you want to start a lifestyle business that stops when you stop, or whether you want to own something you can scale. One is not better than the other, but you should consciously decide when you start your business, as opposed to becoming a victim when it’s not what you thought it would be. And once you start, if you want to sustain the business and grow it to be more than a “job“ for you, you have to think about what that might entail and keep your eyes open for opportunities to productize your service as Knowledge Architects is doing with AR4Transit.
If you decide to build a business that will live on beyond the day you stop working, you have to think differently about investing in the things that will hold or grow in value over time, and your unit of value cannot solely be time. You have to invest in assets that will be valuable to others who acquire the business after you leave it or sell it.
Sheila scaled by productizing her service—that is, turning her service into a product. Another way to build a bigger business is by doing the reverse—turning your product into a service. Call it servitizing. Leasing is one way to “servitize” a product. One of our favorite examples is the story of Interface Carpets and its CEO, Ray C. Anderson, an early sustainability pioneer whose company introduced modular flooring and carpeting to offices. A customer could replace a few squares instead of the whole carpet if a section got stained or damaged. Then, to reduce the company’s environmental footprint, he decided to stop selling carpet altogether and instead began selling the use of carpet. Interface installs carpet squares, and after several years of use, the company swaps out the old carpet with new squares. The old carpet could be reused (such as squares that had been under tables and never stepped on) or recycled. Instead of selling a product, the company sells the service of using a product.
It was becoming clear to us that we needed to come up with our own new path to sustain our business and our sanity. Insomnia was becoming more than the name of our company; it was becoming our state of being.
By the fall of 2007, we knew that Stacey‘s work in the legislature in the upcoming session would surely demand more of her time. She was already looking ahead to her next campaign and was also trying to finish writing a romantic suspense novel. Lara was getting involved in public service work of her own while finding her footing as a new mom. We often discussed our futures and the future of Insomnia during one of our most cherished weekly traditions. While many people in business like to play eighteen holes to relax, our version of golf was treating ourselves to high tea on occasional Friday afternoons. Over tiered platters of crustless cucumber-and-cream-cheese sandwiches, scones, clotted cream, and lemon curd, we would sink into the plush couches of posh hotels around town and take a moment to breathe and go over our workload. For two people who love solving puzzles, the conversations inevitably turned to the next code we wanted to crack: What could we do to make money while we slept? Little did we know, the answer would reveal itself when we least expected it.
Adapted from LEVEL UP: Rise Above the Hidden Forces Holding Your Business Back by Stacey Abrams and Lara Hodgson with Heather Cabot, published on February 22nd, 2022 by Portfolio, an imprint of the Penguin Publishing Group, a division of Penguin Random House, LLC. Copyright © 2022 by Stacey Y. Abrams and Lara Hodgson.