You Need Customers to Succeed in Small Business(goodenough.us) |
You Need Customers to Succeed in Small Business(goodenough.us) |
If you're a small business, lean into being that and you'll have a much larger chance of success. Don't try to pretend that you're something you're not.
Technology is a particularly difficult place to balance those things.
When we opened our small business we took the marketing approach that (not the exact pitch) we “bring the best of enterprise” with the “agility” of not being an enterprise.
We don’t market like that anymore because it’s not a good fit for small business customers, but we still have a focus on that idea internally.
Balancing that with the realities of a small business are hard. For example, we have internally managed 3-2-1 backups of almost all customer data, replicated geographically, and persisted with credentials that can’t also mutate backup data. That is somewhat time consuming to manage on the front end.
I’ve written on HN before about how we suffered with QuickBooks and eventually moved to an ERP. Most businesses our size would scoff at that, but some things are worth the expense to integrate various processes into a single pipeline.
Part of the problem for SMBs is that you can’t scale your humans like you can scale your servers. So for every hour I spent connecting the dots, sending DocuSigns, and fighting with QB was an hour I couldn’t spend on product/service/customer. Sometimes you can buy your way out of that. Sometimes you can engineer your way out of that. Figuring out which is which is one of the hardest parts.
If I read "best of enterprise", I'd wonder what was meant by that.
Broadly speaking, one of the big differences between large and small companies is what they're good at. The old saying that "small companies make it possible, large companies make it inexpensive" holds as true as always.
(Of course many advantages will be unique to a particular industry or business)
Tautologically all business (big versus big included) are fundamentally different, and hence have different strengths and weaknesses.
Hence, it is not a priori true that the category of small businesses has unique advantage (as a category) over big businesses. You of course have done nothing to argue that they do.
You basically dismissed someone for making a fair comparison because they didn't give you a concrete example like: A local coffee shop remembering customer names vs a large chain with a impersonal script.
Giving an example in this way is not a requirement, you can use your brain as well. Unless you just didn't read what they typed thoroughly enough and mistook their point.
- A small business can live very well on delivering a product that makes a few hundred thousand dollar profit. Large companies can't be bothered with such small numbers so they don't even try.
> Small businesses don’t get the spotlight, but they are the engine of the economy. To wit, in the United States: 99.9% of businesses are small, nearly half the private workforce is employed by small businesses, they generate over 43% of the country’s GDP
This is lying with statistics.
- "Number of businesses" and "percentage of all businesses" is a silly metric, because there are zillions of one-person LLCs for everything from hosting a blog to renting out a spare room in your house, which are not "businesses" in any real sense.
- Every franchise location (i.e. every fast food restaurant, gas station, etc.) in America counts as a separate "small business" and its employees are "employed by small business", even though franchisees have little independence or control, and for all practical purposes are just extensions of the megacorp they are franchising from. Franchising is mostly a way for megacorps to offload the risk of setting up new locations onto the taxpayer, via letting franchisees qualify for government-subsidized "small business" loans.
Do not uncritically repeat facts from sources like the "U.S. Small Business Administration", which for all intents and purposes is a lobbying group for U.S. Large Businesses.
EDIT: I have hooves for hands and accidentally submitted before finishing my thought.
I wonder if there is a way to automate them with AI.
In the US, it's generally very easy to create a "business," which doesn't even need to be a separate legal entity.
I'd guess that a substantial portion of the companies in the denominator have no employees and are just entities for owning a piece of property, or for someone's occasional graphic design work, or whatever. They are legally businesses, but not businesses in the way that we commonly think, such as a local auto shop or retail store.
This is correct, but misleading. In the US, something like > 60% of GDP come from just the US companies in the Fortune 500.
I once worked for a F100 sized healthcare firm that had a separate LLC for each physician it 'employed'. Quotes because the LLC invoiced the parent and then paid the physician, so they were technically an employee of the LLC, but it shielded the company from certain risks and had some tax reasoning and various other mumbo-jumbos
So we get 30 000 or 17 000. Which is entire SnP 500. And probably even every publicly traded company.
For every US Steel, there's a thousand potters throwing vases in their backyard shed.
Unless you're AI, social network, or one of many other examples of start-ups having a large valuation despite not having obvious customers.
They're definitely classified as small businesses but they're on a different track. That being said I think both "tracks" could learn from each other despite having different problems. They can even share goals.
You might not need customers initially if you raise 200 Million for your AI startup, but eventually you will, unless you maintain escape velocity or sell. I think it's more likely that chasing word-of-mouth marketing is an excellent goal for all companies and thinking you're above that will increase your risk.
You're definitely right about the difference and thank you for mentioning it.
I do think that the point of the article can still be applied to both types of business. The point I take from the article is more about not missing out on your identity or thinking your britches are too big, which could be applied to startups as well.
They provide a service and receive revenue in exchange. How else would you define a "real business?"
Here’s my quick list from just today:
- Dropped my kid off at daycare — small business
- Picked up a burrito from Express Burrito on Taraval — small business
- Ordered coffee — small business
- Called a handyman to fix the lights — small business
- Called my dentist — small business
- Wrote a rent check to my landlord — small business
And yeah, I’ll probably spend a good chunk of money at Costco this weekend… but that doesn’t change how deeply woven small businesses are into my daily life.
Small businesses don’t get the spotlight, but they are the engine of the economy. To wit, in the United States: 99.9% of businesses are small, nearly half the private workforce is employed by small businesses, they generate over 43% of the country’s GDP
Hardly. Look at the concentration of the nasdaq 100--it's all huge companies. Same for the DJIA. Big companies play an increasingly important role.
The nasdaq 100 is the largest companies that exist. That's why that index exists. Ditto for S&P-500.
The DJIA is also exclusively large capital businesses.
Pretty much any index out there is going to be primarily composed of the largest players in the market, that's just how these things work.
The stat says 43% of gdp is from small business and 50% of non-government workers, too. That means they're important. Of course, the large businesses are the other half of the economy with just 0.1% of the number of businesses.
I think the point is, if you ignore small or big business, you're ignoring half the economy.
I’m sorry that line sticks out to me. Are you implying that big businesses already don’t dominate the economy?
We had several customers jump to us from another local firm. When we got in, we noted that the prior firm had “implemented backups”. This was a script that just made a zip file of their data and stored it right alongside the running application. Sometimes even in a web/network accessible directory. But hey, most of our customers didn’t have backups before they came to us at all.
We’re also talking no MFA, guessable passwords, customer domain names owned by accounts associated with email addresses that no longer existed, etc.
So, stuff like that. I guess to sum it up you could say “we pay attention like an enterprise should,” and that many SMBs in the space don’t, for clients that don’t know what to pay attention to at all.
> The old saying that "small companies make it possible, large companies make it inexpensive" holds as true as always.
I hadn’t heard that. Love it. We don’t come cheap, but our clients don’t have to manage S3 buckets, and we don’t have to run geographically redundant SANs.
Plus the ability to do extreme pivots on a dime. Also, you tend to get treated a little better generally as you aren't an impersonal corporation. You're a businessperson, with the emphasis on "person".
Also here's a link[1] to an article tangentially related to what I'm saying. I haven't read or, nor will you. It doesn't quite confirm what I'm saying, and it's possibly behind a paywall.
I think it's interesting to talk about how "act your size" can also be wrong. Sometimes fake-it-til-you-make-it is the goal. Contextually you should hold both ideas to be true and apply them appropriately.
Maybe you just thought the original post is a vague platitude and you don't want to give them the satisfaction but maybe we can share some of what we've experienced.
One thing I always think about is hiring generalists vs struggling to maintain departments you can't sustain. I understand businesses think this way, so it influences how I think about applying to roles. I'm currently in a generalist role and when searching I always look for smaller businesses because I find my impact is higher, and repetitive work is my greatest fear.
And sometimes they can both be useful at the same time. A while back I was contacted by a Fortune 500 company to build them some custom hardware. I'm the proverbial "one guy in a basement" so I could respond quickly to change requests without having to go through multiple meetings and their engineers appreciated that.
OTOH, as we got deeper into it, when I realized that they were planning to do most transactions by Purchase Order, I was really concerned about scaring them off by telling them I was really just one person, so I very quickly spun up an LLC in an attempt to look larger, at least to their Purchasing Dept. At the time I didn't realize that you can get an EIN (Employer Identification Number) while being a Sole Proprietorship, but creating the LLC just took a few minutes on the state Attorney General's site anyway.
This is a really interesting point, I think.
In my opinion, it depends on what your larger goal is. If your goal is to eventually become a big business, that changes your approach and "fake it till you make it" gains some validity. In a sense, those sorts of businesses are less "small businesses" and more "large businesses in their infancy".