February 05, 2018

Software Needs a New Mission: Helping Small Businesses Thrive (Medium) »

small-business-software

Something happened on the way to software eating the world: small businesses got left behind. Way behind.

It makes sense when you consider why. There’s a lot of money to be made selling software licenses to large companies with big budgets and sophisticated teams poised to wonk out on every new feature push. There’s clearly a nice symbiosis happening between software makers and big businesses because the enterprise software market is huge and projected to keep growing.

But as this modern day gold rush has played out over the past decade or two, one of its unintended consequences has been to tilt the balance of power even further toward big businesses at the expense of small ones. In fact, over the past two decades, the Fortune 500 have amassed record profits while small businesses have struggled to squeak by.

Obviously, there are a lot of variables at work in both cases, but the role of technology shouldn’t be understated. We live in a digital world, and the rate of change is increasing. Businesses that have access to technology make the leap into so-called “digital transformation,” while those who don’t, well, don’t. In this regard, small businesses have been massively underserved.

In 2011, I founded Womply to bring the benefits of the SaaS movement to mom-and-pop shops. Back then, I knew two things: our evolution would not follow the traditional enterprise software playbook, and I would keep the company focused on small businesses — no building enterprise tech on the backs of small business owners.

Seven years into our journey, I’ve learned a lot of lessons about what’s working (and what’s not) for Main Street businesses, and why it’s more critical than ever for the technology community to help them succeed.

What’s at stake?

In the Silicon Valley echo chamber, it’s easy to believe the only companies that matter are Apple, Google, Amazon, Facebook, Microsoft, and, yes, the perpetually discussed Uber. (And these days, we could add the latest crypto and ICO to the list.) Large tech companies are the most valuable enterprises in the world, but their success matters more to Wall Street than to Main Street.

Why is it important for small businesses to succeed? Here are a few reasons:

  • Nearly 58 million American workers — nearly half the workforce — are employed by small businesses.
  • Nearly 30 million businesses — or 99.9% of all domestic companies — are considered small businesses. Even if you reject the U.S. Small Business Administration’s threshold of less than 500 employees as “small,” there are 23 million sole proprietorships and 20 million people working for companies with less than 20 employees.
  • Since 1990, big businesses have eliminated 4 million jobs while small ones have added 8 million.
  • Fully 54 percent of all U.S. sales flow through small businesses.

In short, small businesses truly are the fuel of the U.S. economic engine. A major setback for small businesses would jeopardize America’s entire notion of prosperity, not to mention its global economic and political dominance. Our country’s №1 priority, now and in the future, should be to preserve a vibrant small business ecosystem.

Technology as vertigo

While the proliferation of software has created a Golden Age for big businesses, the rapid rise of technology has created extreme disorientation for small businesses. Just think about a few ways technology has changed everything around small businesses in recent years:

  • The advent of local search apps like Yelp and TripAdvisor has flipped how people find small businesses, and in typical Web 2.0 fashion, made discussions about those businesses public.
  • Customer behavior has shifted away from clipping coupons and toward expecting deals to be delivered to the inbox. In fact, 86% of people actually want to receive promotional emails from companies they patronize at least monthly.
  • Millennials, the largest demographic group in history, are taking over the workplace and expect work communication to be delivered in a messaging app. They tune out phone trees and printed staff schedules.

These are just a few of the myriad ways business has changed rapidly and radically; meanwhile, small business owners are overwhelmed just trying to keep up with their daily routines. How are business owners expected to master search engine optimization or email marketing in addition to the daily commitments that already have them underwater?

We’re quickly moving into a future where only small businesses that make the digital leap — or start with a digital plan in place — will survive. But they can’t do it by themselves.

Technology as antidote

Ironically, the same technological forces driving these disorienting changes for small businesses can aid their evolution.

Online review sites, for example, may seem confusing or intimidating to small businesses at first, but they’re the best channel for acquiring new customers if you run a small, local business. These sites are a byproduct of the proliferation of local search, which has increased the value of in-store visits to local retailers three-fold even as foot traffic falls. And marketing automation is becoming so user-friendly and mainstream that even the busiest business owner can use it.

In short, technology is not an inherently destructive force for small businesses. Used properly, it’s actually a powerful catalyst of business success. While the previous decade or two has taken big business into the cloud, small businesses have patiently waited their turn and are now adopting SaaS in droves: 94% are now using cloud services to run their businesses, a massive increase over a mere 27% in 2011, according to Techaisle.

A new mission for SaaS

This brings me to Womply’s evolving mission — or, more accurately, our mission of aiding evolution. As I mentioned, I’ve always believed the enterprise model wouldn’t work for small businesses. In fact, one of the reasons so few software companies attempt to build technology for small businesses — and even fewer succeed — is because there’s no beaten path. Small business is the final frontier for SaaS, with plenty of trails yet to blaze.

Over the years, we’ve wrestled with the hard task of building software that addresses the key challenges of running a small business in a changing landscape while simultaneously figuring out how to distribute our solutions to a fragmented market that typically doesn’t benefit from virality.

One of the main lessons I’ve learned along the way is that change is the only constant for small businesses trying to survive in a world awash in technology. Even if the core problems remain the same, the solutions will have to evolve constantly with the times. Accordingly, Womply’s reason for existence will always be to build technology solutions that help small businesses adapt to the constant flux of technological change.

In short: our mission is to help small businesses thrive in a digital world.

That world looks very different now than it did five years ago, and nobody knows what the next five years will bring. Regardless of what the future holds, we’re not going to let small businesses get left behind again. It’s their turn to shine, and we’re going to do our part to ensure technology works for them instead of against them.

 

Toby Scammell

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