Jason Fried (Basecamp and 37 signals) makes a great point in his Web 2.0 Review: “Build a product that doesn’t require organizational scaling.” Ramping up staff and infrastructure killed a lot of great little businesses in Web 1.0 (that meme seems to have hit and stuck quickly).

It’s nice seeing companies intentionally staying small, foregoing venture funding, and keeping resource requirements lean. This approach lets you innovate faster, shift with the market, and earn a profit in markets that might otherwise not be financially attractive.

My guess is we are on the brink of a massive explosion of “nano-companies” — groups of 1 to 10 people working on filling very specific needs in the market that larger businesses can’t service profitably because they have already scaled too big to fit the size of these “nano-markets”.