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3/17/2008
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Solo Entrepreneurs: Big Bucks From Tiny Computing Startups

One-person companies are earning upward of $1 million in revenue annually. How do they do it? With high-speed Internet connectivity, mobile apps, automation, and a little help from their customers.

Nick Bradbury is a legend among the independent, grassroots, pull-yourself-up-by-your-bootstraps Web-developer set. A serial entrepreneur, he is the creator of the HTML editor HomeSite, the CSS/xHTML editor TopStyle, and the RSS reader FeedDemon, all of which have achieved a near-fanatical user following over the years.

Although he won't divulge how much NewsGator Technologies paid for Bradbury Software in 2005 -- or what his annual revenue was prior to that, when he was a one-person business for more than 10 years -- Bradbury admits that they were both "considerable" and provided for "very good living." And although now technically an employee of NewsGator, he refused to move to Denver, where NewsGator has its headquarters, preferring instead to continue working solo in his home outside of Nashville.

"Colorado is beautiful, but I didn't want to uproot my family," he said. "Besides, it's too cold." Perhaps even more significantly, he likes the independent developer lifestyle. Although now part of a large organization, he is continuing to work on his own creations -- just with more resources behind him. "I'm allowed to just work on FeedDemon out of my house," he says. "It's a lifestyle decision. Every developer who grows his business ends up not developing anymore. I didn't want that to happen to me. I'm still doing the things I like doing -- designing new applications and then coding them."

Call them lifestyle businesses. Peopleless enterprises. Solo entrepreneurs. Workers like Bradbury are becoming increasingly common as the Internet matures, software as a service (SaaS) is more reliable, outsourcing becomes more commonplace, and customers and user communities begin to shoulder more of the work of keeping operations going. Such companies get big results by thinking small -- from an organizational perspective, that is. From a revenue perspective, they're quite ambitious.

"We're seeing them everywhere -- they almost don't feel like businesses, because there's no there there -- these are people working from anywhere and in any time zone, and who are grossing from $250,000 up to $5 million or $6 million," said Paul Kedrosky, a senior fellow at the Kauffman Foundation, who has written extensively about peopleless businesses. "Generally, these are people for whom the interesting part is the delivery of the product or service, not the management of other people," he said.

"The no-employee business springs from the notion that there are two spheres: a manager/contributor sphere and a passion sphere," said Terri Loier, founder of WorkingSolo.com, a Web site devoted to the challenges facing one-person businesses. There are many people who love to live in their passion sphere. They really don't want to build a big business by hiring lots of other people -- although that doesn't necessarily mean they don't think big in terms of dollars."

InformationWeek profiled one-person companies that are currently reaping more than $1 million in revenue annually. (We cheated a little and included a four-person company because it embodies the spirit of a lifestyle business.) These businesses have a number of things in common. First, all of them use the Web to leverage their limited financial and personnel resources for everything from marketing and sales to sourcing raw materials and products to customer service and support. Second, they depend on high-speed Internet connectivity and mobile applications to work from anywhere and create virtual teams and partnerships that can be either permanent or brought together on an ad hoc basis. Finally, they depend heavily on their customer bases/user communities to pitch in and help with essential operations.

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