The Rise of Personal Business

by Phil Windley

Intuit released a report in January that trumpeted the rise of the personal business. Personal businesses differ in terms of clientele, services, and revenue, but they share one vital characteristic: they don't have employees.

Between 1998 and 2004, the number of personal businesses grew from 15 million to almost 20 million--a 33% increase. Economic, social, and technological factors all account for this rise. My personal belief is that the economic and social factors have always been there, but the Internet has broken down many of the traditional barriers.

In times past, being a sole-proprietor usually meant your business was strictly a local affair. But the Web, social networks, email, VoIP telephony, chat, and blogs enable almost anyone to go global. Part of blogging's appeal, for example, is the chance to build a global, personal brand. Tom Peters says "To be in business today, our most important job is to be head marketer for the brand called YOU."

Its not simply the powerful reach that these tools have. Many businesses, especially high-tech businesses, can be started with a lot less capital than ever before. A few thousand dollars for servers and open source software can do the job that used to cost tens of thousands of dollars. But its even better than that.

I recently interviewed Doug Kaye about a new system he's built for podcasters. The system is designed to support tens of thousands of podcasters, including the compute intensive task of dynamically rendering audio and video files for download. His total outlay? Less than $1000!

Doug built his system on top of the Amazon Web Services (AWS) compute platform. The AWS compute platform offers raw computing and storage "by the drink." When Doug needs storage, he pushes the files to Amazon for 15 cents per gigabyte per month. When he needs another processor, he rents it for ten cents an hour.

The magic of this model is that it does away with fixed costs. Consequently, your expenses scale with your revenue. As long as Doug's services are priced right, he can be in the black from day one. That's a powerful business model.

AWS is just part of a tremendous support structure that you can use to start a business. Good quality email, calendars, and even word processors are free. Credit card processing, Web hosting, and domain names are nearly free. Affiliate programs like Google AdSense, Amazon Associates, and Commission Junction have allowed thousands to make money as resellers of someone else's products and services.

My thinking in this area has been heavily influenced by two books: The Rise of the Creative Class by Richard Florida and The Future of Work by Thomas Malone. Where Malone talks about how these changes are affecting work itself, Florida spends more time on how they're are affecting our culture and our values.

While many personal businesses are consultancies, I believe that much of the appeal lies in breaking free from the basic bargain of the workplace: trading time for money. In that bargain, the only way to make more money is to make more per hour or work more hours. The first is hard and the second even harder. On the other hand, if you use your time to generate a product that has a revenue stream, you build recurring revenue which is much more valuable.

This brings us back to the brand of YOU. Your success or failure in a personal business will ultimately depend on how well you market yourself. Doing that has never been easier. Here are some simple first steps:

  • Get a domain name. All the good ones are gone. Get over it and find something you like.
  • Set up you email address at that domain (simply forward email to GMail or Yahoo!) and use it.
  • Start a blog--on your new domain--and talk about the things you know. Link out liberally and promote it wisely.

These few steps will put you several steps ahead of the rest and set you on your path to creating your own personal brand and, maybe, your personal business.

Phil Windley is the Executive Producer of IT Conversations and writes the fascinating and illuminating Technometria blog at Contact him at

Last Modified: Friday, 13-Jul-2007 15:01:49 UTC