You Need Customers to Succeed in Small Business

That is a challenging balancing act, although worth it to work on mastering.

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.

When you think about those advantages, which ones seem most generalized to all small businesses?

(Of course many advantages will be unique to a particular industry or business)

what are those advantages?

That was a long-winded way of not saying anything of substance.

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.

I mean, the biggest consumer of AI writing is probably AI scrapers…

That doesn't mean anything. You can accomplish that by having a very large denominator, which is possible if creating a business is trivially easy.

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.

Quick google gives ballpark figure of 30 million businesses. Companies are something like 17-19 million, 0.1% would be simple divide by 1000.

So we get 30 000 or 17 000. Which is entire SnP 500. And probably even every publicly traded company.

Your forgot government, which is about one third in the US

Most US companies are actually tiny, with pretty low revenues. Per Copilot, 82% of businesses have no employees and generate an average annual revenue of just $44,000.

For every US Steel, there's a thousand potters throwing vases in their backyard shed.

> not "businesses" in any real sense.

They provide a service and receive revenue in exchange. How else would you define a "real business?"

Before dismissing small businesses as just a tiny part of the economy, try this: count how many times you interact with them in a single day. They might make up a small percentage of GDP, but they are a huge part of our everyday lives - and probably critical part.

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.

Agree

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.

I guess we would define these companies differently right?

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.

startups by definition aren't really small businesses. they might not have a lot of employees, but they don't stay that way. a small business is successful and sustainable at that size and is structured to be so. a startup either becomes a large business or ceases to exist entirely.