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Lola 🧪

Lola 🧪

January 21, 2022

Solo work and the nature of the firm

In the US alone, ~ 73% of the 30 million-plus small businesses are operated by sole proprietors and that is accelerating in the face of the great resignation. There are a few trends making solo work more possible than ever before 👇🏿

Trend #1 Lower transaction costs

In 1937 Coase wrote a paper describing why firms exist. He uncovered two competing forces: transaction costs lead to the creation of the firm, and overhead and bureaucracy costs limit the firm’s size.  Transaction costs (things like search and information costs, bargaining costs, etc) are lower than ever making small and solo firms more possible.

Trend #2: Lego-izing of business

APIs let you build software without having to figure out critical infrastructures like payments, text messages, and video and have risen in popularity in software development for companies of all sizes. Jack Conte, CEO of Patreon, spots this trend for business as well with more startups making it possible for small teams to subscribe to critical creative business infrastructure.

Trend #3: Digital media and online leverage

According to a Statista report, digital media consumption started outstripping traditional media consumption in 2018 and it's not just megacorps capitalizing on this trend. Social media has been a large driver of this growth with social media video now seeing as much consumption as traditional video.

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