67. What small, unscalable businesses teach us about profit

Why is the deepest business wisdom you can find NOT in an online course?

That's because it lives in Asian noodle stalls, kitchen hair salons, and family businesses run by aunties and uncles who've never heard of Canva. 

Let's learn from the quiet, unglamorous experts who've been turning high margins for decades.

Listen to hear more about:

• Why the businesses that look like the "before" picture might actually be the "after" — and what that reveals about what we've been chasing
• The four lessons that traditional family businesses can teach us that most online business advice directly contradicts
• How a store owner managing 3,000 SKUs from memory and extending credit to 200 families exposes the limits of "relationship marketing"
• What my always-overbooked, never-online mother-in-law knows about demand that most funnel strategies get completely backwards

So many of us are ignoring the people who've been quietly building generational wealth without a branding consultant in sight. This episode is your invitation to apprentice yourself to a much older, much wiser tradition of business.

Transcript

Hello friends, you are listening to the Liberatory Business Podcast. I'm Simone Seol, your host, and thank you so much for listening. So today let's talk about the limits of what we can learn from the world of online business coaching. And I say all of this as an online business coach. I've been thinking about this a lot.

There was a particular post that I read recently from someone called Varun Agarwal — I hope I said that correctly; if I didn't, I am so sorry. Their username on Instagram is @varun760, just to give credit where it's due and be proper about it.

They shared a post that really struck a chord. They were talking about how they're from India, India-based I'm assuming, and talking about how India's real business knowledge doesn't actually live on the internet. And it doesn't live in startup culture either.

Instead, it lives in places like: trader families who figured out the entire global diamond distribution without getting an MBA. Textile manufacturers who export to 40 countries and still do their accounting in a notebook with a pen. Store owners managing 3,000 SKUs, extending credit to 200 families, maintaining a 95% collection rate — all from memory.

They're not online. A lot of them barely speak English, and they definitely don't fit the founder aesthetic. But guess what? They have these successful businesses that have been running on high margins for decades, if not multiple generations.

The extremely short history of online business

And I often think about the extremely short history of online business and online business coaching. This entire field is maybe only two decades old if we're being generous. And you know, those of us who've been at it for a while — and I've been here since like the early 2010s — learned some useful things, and those things are worth sharing with others.

But I don't make the mistake of thinking that that is what equals true mastery of business. And I think true mastery of business lives in places that Varun talked about. From my own observations, I see it in unassuming little noodle stalls and the fabric shops and the family businesses run by aunties and uncles and grandmas and grandpas back home in countries like India, Korea, Philippines. These are people who've never heard of Canva, don't know what it is, but could teach a masterclass in quality, service, resilience, ingenuity, and staying power in their sleep.

But interestingly enough, we as a society don't think to turn to them for business wisdom, right? Instead, we go online. We take our cues from the 28-year-old who's raised a bunch of money, pivoted twice, hasn't ever turned a profit — which, that part is deliberately obscured, by the way. It's actually mind-boggling how many of these business prodigies that are heralded never actually turned a profit.

But you know what they do have? The ability to tell a great story on a podcast. Or we think to turn to the business coach whose entire expertise is the system of, you know, plug in the funnel, run the ads, scale the offer. It's a system that sells itself as proof of itself. Every success story is ultimately a story about selling success stories. And if you look underneath all that, what's actually there? In this model, the proof of the system's success is the fact that it's spread, but nobody asks how — if at all — it actually serves humanity in any kind of positive way.

The noodle stall that's actually the "after" picture

There's a tiny noodle stall near where I live in Korea — even though these are actually everywhere — but the one that I'm thinking of is in the corner of a wet market. There's an auntie who's been running it for three decades, and her business lifted her family out of poverty into middle class, allowed them to build a nest egg, put her kids through college, and sometimes be able to give back to the community.

So how was she able to do all this with a small, unassuming noodle shop in the corner of a market? Because from the outside it looks like nothing. But on the inside, they've been running on extremely high margins for decades. Just judging by aesthetics, they look like this small, kind of shabby noodle shop — looks like the "before" picture of a business growth journey. But actually, they are the "after" picture.

How many of us are chasing after a glossy vision of what the "after" looks like in business, promoted by people whose most valuable asset is their self-promotion skills? You know, not to say that self-promotion skills aren't important, but you see what I mean. While completely ignoring the humble, boring, unglamorous examples of genuine business experts who've been turning high margins for decades. We don't think to look to them, we ignore them, because they have a terminally uncool Asian auntie perm and they've got a stained apron tied around their waist all day.

And actually, my mother-in-law is another example. She runs a divination practice based on an ancient Chinese and Korean system of astrology. She's always turning people away. She's always like, "Ugh, I don't wanna do this." I mean, she gets calls from people all the time asking to work with her, because she just does not have enough room in her calendar. She's always overbooked, but you can't find her online. She doesn't have an email address. Her entire business runs on word of mouth that's been compounding for years and years.

The trust that these people hold with their customers, their communities, and their craft cannot be replicated by a couple years of clever marketing. It has to be earned slowly through devotion, proximity, care, and relational intelligence over a timeline that I honestly don't think most online business people would ever have the patience for.

What we can actually learn from these examples

So let's talk about what I think we can actually learn from these examples, because I think a lot of these lessons run counter to conventional online business advice.

Think in years, not weeks

First, notice that most online business advice — how to amplify your visibility, how to define your brand and promote your brand, how to get people to trust you — assumes very short sales cycles. Even shorter attention spans. So much of the advice that's given out there is just working on the assumption of constant churn. The launch window, the cart close, the limited time offer. And that works inside the current culture of online business.

But what it does is it trains you to think in weeks and months when the people that I'm talking about think in years, decades, maybe even generations. So before you take any piece of advice, ask yourself this: Is this optimized for current trends and quick cash-outs? Or is it optimized for long-term sustainable growth? Because a lot of the time, these two are not the same thing, and they directly conflict with each other.

Same thing with constant pivoting and trend chasing. Sure, it might help keep you in front of the algorithm for now, but every pivot is like a soft reset on the trust that you've built. My mother-in-law never rebranded her practice. The noodle stall at the market has been serving the same menu for 40 years. The depth and consistency is what built the reputation — not always changing to fit whatever's trending now, right?

A lot of these old-timey businesses didn't actually grow by finding tons of new customers all the time. They grew by going deeper within the same geographical radius, with the same families, in the same neighborhood.

Not everything needs to scale

Which leads me to the second lesson, which is that not everything needs to scale. And actually, some things that can't be scaled, or are not scaled, end up being high margin exactly because they're not scaled.

So, for example, the noodle stall, my mother-in-law's practice — some online business coaches would look at both of these and say, "Oh, there's a missed opportunity, right? There's untapped markets, unrealized revenue. You can have a lifestyle business instead of having to cook noodles all day." You know, always said with a little bit of condescension.

But the constraint was the secret to their success. Because here's the thing — when you don't scale, your costs stay low. When you've got no employees to manage, no systems to maintain, no overhead from growth.

Why is the online world so obsessed with growth and size? Why does it look at small as if... you know, "oh, you gave up." Like, "Why don't you do more?" And I think it's because the ecosystem has no eye for — it does not recognize or reward — durability. It rewards growth narratives. Nobody goes viral for having the same business for 40 years, right?

But what if that's the point? That you can stay high profit, high margin for 40 years and be a cornerstone of a community? Like, isn't that the point?

Relationship as the business model

Which again brings me to my third lesson, which is that the relationship can be the business model. I'm not talking about, you know, what some people have turned into a thing — "relationship marketing" or "you have to build know, like, and trust." These are like trying to hack or simulate relationship, as opposed to actually having relationships with human beings.

The store owner that was mentioned in Varun's post, who extended credit to 200 families — that didn't happen as a growth strategy, right? That happened because that's what it meant for their business to be embedded in a community. And that's why the business thrives. Relationships cannot become a marketing concept. It's not something that you can contrive and simulate at scale through clever email sequences and DM strategies. That's not how it works. You just have to know your people and care about them and have human relationships with them, and they stay. It really can be as simple as that.

Respond to existing demand

Now the fourth and last lesson is that we can respond to existing demand rather than trying to generate brand new demand. I think this is something that a lot of these mom-and-pop shops and family businesses who have been around for a long time really excel at.

Look, you don't need to manufacture demand for noodles. People are always going to eat noodles, at least in this part of the world, right? My mother-in-law didn't need to generate demand for her divination readings, because at least in this part of the world, people like getting those. The need is always there, and they showed up and rose to a level of being able to meet that demand at a high, reliable level for years.

I feel like the online world spends an enormous amount of energy trying to figure out how to create desire. You know, you run ads, you write copy, you're like, "What are the pain points?" And then build a funnel. And sometimes, again, sometimes that's legitimate. Sometimes that's what you gotta do. But I think too many people online get this backwards. They try to generate demand for something that no one has ever thought to themselves, "Oh, I want that thing." And they try to do that by convincing people that they have a problem they never thought they did. That is just an unnecessarily painful uphill climb.

If you have to work that hard to persuade someone they need what you're offering, it might be worth asking why you're trying to solve a problem that people don't know they have — as opposed to solving one of the many problems that many people are very well aware they have. I think that's something that traditional businesses really excel at.

And don't get me wrong, I don't say any of this to disparage those of us who do online business. It is just an honest accounting of where we are, which is in the much larger, much older world of relational commerce that predates capitalism itself. We don't need to demean our own work to name whose excellence we can all benefit from when we bring our humility to it.

So my invitation to you? Next time you're looking for business wisdom, maybe try skipping the ones with the biggest, shiniest online platform. Look at who's been quietly serving the same community without fanfare in an unglamorous way for 30 years, but are still around, still going strong, still beloved by the community.

Wanna know about generational wealth? Skip the blonde scale-to-seven-figures coach toting an Hermès bag. Instead, look at the Filipino grandma who's been running a hair salon out of her kitchen and put her three kids through college. She doesn't have a branding consultant, I can assure you. But what she does have instead is a community that trusts her. What she has instead is children and grandchildren whose lives are genuinely better off because of her business, and a legacy of strength, persistence, and care that'll become medicine for her community and descendants.

Now, that's generational wealth.

And last thing — if you're listening to this and you're an online business owner, I wanna say this to you. Like I said, the point of this episode isn't to put us down. I am an online business coach. I'm proud of what I do. Many of us do good, smart work that genuinely helps people. I see you. That's what I try to do too.

Instead, consider this episode an invitation to expand our perspective, to self-reflect, so we can sharpen our skills and deepen our commitment to real service — by apprenticing ourselves to those who actually live what we aspire to, which is contributing to collective prosperity in a way that our ancestors would be proud of.

Alright, thank you so much for listening again, and I'll talk to you next time. Bye.