Who Is A Solopreneur? Mastering The Ultra-Lean Business Model

A solopreneur is usually (not always) a digital entrepreneur who leverages automation, work flexibility, and creativity to develop ultra-lean business models. Those can scale over the one-million-dollar revenue mark with a minimum business overhead, no venture capital funds, and mostly bootstrapped. Those solopreneurs start by mastering profitable microniches.

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Clarifying the meaning of solopreneurship

In the business world the solopreneur is seen as the small business owner that does, from A to Z, all the functions and tasks the business requires to survive.

Yet a solopreneur doesn’t necessarily do everything on her own but instead focuses on devoting the whole focus on the most critical part of the business while contracting (if necessary) the remaining portion of the company.

Where the classic start-up entrepreneur (the Silicon Valley archetype) is about building a company with the grandiose vision of an exit. Either through venture capital acquisition or an IPO.

In many cases, the solo businesses will transition toward becoming a small company (like DuckDuckGo solo-business that turned out in a profitable and successful venture-backed business).

In other cases, the solopreneur might limit the growth of the company as a choice of freedom. In short, for the solo business isn’t just about money but also about the kind of business you might want to build.

Solopreneur vs. startupper

The solopreneur approach might well be the opposite approach compared to the Silicon Valley-type serial entrepreneur, which primary aim is to build businesses that scale but that also requires a lot of maintenance and large employees’ base.

The solopreneur makes the opposite choice. Thus, let me recap in the following points how solopreneurs might differ from startuppers:

Bootstrapping vs. funding: bootstrapping is the primary mode of growth of the solopreneur
Passion vs. business planning: the solopreneur is often fueled and build on top of passion and choice rather than opportunity alone
Non-linear income vs. financed and artificial growth: the solopreneur puts work in building scalable assets, due to the limitation in resources for the business, that is a key element for the success of the business
More key customers vs. more customers: due to constraints in terms of structure, finances and time, the solopreneur has to make hard choices very early on. Thus, giving up that part of the business or those customers which are not key to its strategic long-term success

Step one: Start from a business model rather than a business plan

Rather than drafting a business plan, which is suited for those entrepreneurs looking for outside financial resources. The solopreneur has to look for simple tools to start and grow its potential business.

For the sake of it, using a business model, as a thinking tool, it can be way more effective, as in a page and in a few hours maximum, you can clear your mind.

Step two: It’s all about your Blue Sea and the Smallest Viable Audience

minimum-viable-audience — The minimum viable audience (MVA) represents the smallest possible audience that can sustain your business as you get it started from a microniche (the smallest subset of a market). The main aspect of the MVA is to zoom into existing markets to find those people which needs are unmet by existing players.

Once found the gap in the market, it is then crucial to niche down. In other words, you have to drill into that specific segment of the market until you find a potential target audience (from a few hundred up to several thousand people), which will be your manna.

Related: The Blue Sea Strategy

Step three: Target Ramen Profitability

Serial entrepreneur and venture capitalist Paul Graham popularized the term “Ramen Profitability.” As he pointed out “Ramen profitable means a startup makes just enough to pay the founders’ living expenses.”

According to Tim Ferris, another way to look at it is to find a Muse by setting up in detail the TMI or target monthly income. Tim Ferris suggests thinking in detail about your monthly cash-flows.

In short, all the expenses that you are going to incur. Imagine, for instance, that you always dreamed of traveling the world. What does that mean? How many countries are you going to travel while setting-up your Muse? For how long will you stay in each country? How much would you pay off rent, travel, and living expenses?

It might sound complicated at first, but once you set this up, your goals will be much clearer. In fact, Tim Ferris makes your life easier by making a great tool available: The Monthy Expense Calculator.

In short, this tool tells you line by line what expenses to take into account. After you have to divide by 30 (to get the daily budget) and add a 30% buffer (you must be ready for any emergency).

Step four: Bootstrap your way through

bootstrapping-business — The general concept of Bootstrapping connects to “a self-starting process that is supposed to proceed without external input.” In business, Bootstrapping means financing the growth of the company from the available cash flows produced by a viable business model.

Step five: create options to scale

The most important concept to understand is that of creating options to scale.

As you build a successful solo business you also create options to expand from a microniche to an adjacent space. You also have the option to look for a niche, before going fora whole industry.

Another option is that as the solo business grows, the cash the business unlocks can be used to build or grow other businesses.

Bringing it all together

Identify a microniche
Draft a business model
Bootstrap your way through organic growth
Create options to scale

Key Highlights

Definition of Solopreneurship: A solopreneur is a digital entrepreneur who creates ultra-lean business models through automation, work flexibility, and creativity. These individuals often focus on profitable microniches and aim to develop businesses that can scale beyond a million dollars in revenue with minimal overhead, no venture capital, and bootstrap funding.
Role and Approach of Solopreneurs:
- Solopreneurs handle all functions and tasks required for their business’s survival.
- They may contract out non-critical tasks to maintain focus on the core aspects of their business.
- Unlike Silicon Valley entrepreneurs, solopreneurs are not solely driven by a grand exit strategy or venture capital acquisition.
- Some solo businesses may transition to small companies with venture backing, while others choose controlled growth or prioritize freedom.
Differences Between Solopreneurs and Startup Entrepreneurs:
- Bootstrapping vs. Funding: Solopreneurs rely heavily on bootstrapping, while startup entrepreneurs often seek external funding.
- Passion vs. Business Planning: Solopreneurs build businesses rooted in passion and choice, whereas startup entrepreneurs often focus on opportunity alone.
- Non-Linear Income vs. Financed Growth: Solopreneurs build scalable assets to ensure profitability with limited resources.
- More Key Customers vs. More Customers: Solopreneurs make strategic choices due to constraints, prioritizing key customers over sheer volume.
Steps for Solopreneurship:
- Start with a Business Model: Instead of a comprehensive business plan, solopreneurs can use a business model as a thinking tool to start and grow their business effectively.
- Find a Microniche: Identify a gap in the market and narrow down to a specific segment to target a smaller, viable audience.
- Aim for Ramen Profitability: Focus on generating enough revenue to cover living expenses and set up a target monthly income.
- Bootstrap Your Way: Rely on organic growth through bootstrapping and avoid heavy external funding.
- Create Options to Scale: Develop options for expansion, adjacent spaces, and leveraging cash flow for other business ventures.