Technology and Small Business

I was recently on a panel called Technology and Small Business sponsored by the U.S. Chamber of Commerce at its annual Small Business Summit. Other participants included Ronald Monford, President and CEO, Mind Over Machines, Inc.; Kevin Hourigan, CEO, Bayshore Solutions and a finalist for the Small Business of the Year Award; Eric Reed, Vice President, Verizon Communications. It was one of the most engaging panels I have participated in. Below is the reporting of my introductory comments. Full coverage of the lively panel discussion written by Ricardo Haven can be found at the Chamber's main blog site.

Bob Mathew went first, and introduced his company, Catalyst Web Services, as one "founded by entrepreneurs, for entrepreneurs". They offer a web-based suite of core IT applications that cover small business needs such as email, electronic documents and collaboration.

In this area of "Software as a Service" (SaaS), Bob notes that it's been small business that's driving the technology forward, and that for most, it's a great fit.

He goes on to answer his rhetorical question of how this fits in with trends in the global economy with three answers:

1. Geographic dispersion of people. People work from different places, in virtual teams, and partner with other businesses. This trend isn't just international, but local as well with people living in different suburbs.

2. Green. Rising fuel costs are really forcing consideration of alternatives to physical proximity, and while options like telecommuting aren't necessarily for every business (or for every day), new technologies are improving on the limitations of old ones like VPN.

3. Global. Markets are increasingly global, and being web-based means being accessible anywhere, at anytime. For example, they noticed a large increase in business from places like Australia when their system became Mac compatible - not something they really considered would happen.

The Changing Face of Small Business

In two days, I will have the privilege of being on a panel sponsored by the United States Chamber of Commerce. I will be on the Small Business Technology panel at America's Small Business Summit sponsored by the Chamber. Some of the questions that we as panelists were asked include: How are small businesses using new technology to improve the way they do business? How will the rising costs of fuel and transportation impact small and medium sized businesses?

Answers to these questions depend on what small businesses will look like in the future. I see two trends emerging. First, small businesses are becoming virtual; they are increasingly teaming up with other small businesses on specific projects for specific clients. This allows them to be nimble and to partner with the very best. Second, more and more small businesses are allowing their employees to work from home. It used to be that only large businesses would allow telecommuting. While telecommuting is not for every business, it can make sense for a variety of small businesses like consulting and graphic design. And even if doesn't make sense to allow telecommuting five days a week, it may make sense to allow it one day a week.

This brings me back to technology. Both trends I describe above are growing hand-in-hand with Web-based technology solutions. Like on-demand software and Web-based email and document management. Technology cannot be separated from the processes and ultimately the people who use them. As small businesses evolve in the future, so will technology. As small businesses become more virtual, Web-based applications are being adopted in greater numbers. There is no sign that this trend will recede in the future.

Potato Farmers and Software Companies

The expression "eat your own dogfood" is a really odd expression. Its meaning, however, is straightforward: if you sell a product or service, you should use it yourself. I read recently that many potato farmers don't eat the potatoes they grow for the market. Apparently they have a small private patch where they grow potatoes for their own use -- free of toxic insecticides and fungicides. In other words, they don't eat what they sell to others -- they don't "eat their own dogfood." Ever since reading the article, I only eat organic potatoes.

What applies to farmers applies equally to software companies. In a now famous blog, Phil Wainewright says: "SaaS vendors, eat your own dogfood — or die." He writes that companies selling Web-based on-demand software won't survive if they don't use the software themselves. He argues that this is especially true because of incredibly rapid software development cycles. At CatalystWeb, we use CatalystOffice as our online office and have done so for the past two years. Many of the improvements that our customers see are the results of our frustrations. We are our own toughest customer. We know that we are accountable to every small business that uses our service and that we have serious responsibilities in serving them. And if we don't use our own service, we shouldn't expect others to use it either or pay for it. But we do use it -- every single day.

What do small businesses have in common?

I recently went to two small-business trade conventions. The first convention was in Fort Worth, Texas; the second one was held in New York City. The two cities are as different as one can imagine. The people who came to the Texas show were mostly small construction companies and a variety of home-based businesses. In New York City, folks were mostly in the consulting and design businesses. You would think at first that the two groups would have little in common. But one thing bound them closely. Owners of small businesses in both cities shared an intense desire to be fiercely independent. They wanted to be their own bosses.

I was also surprised to find that their work habits were surprisingly similar -- both groups wanted to work anytime, anywhere. They were moving more and more of their work online with Web-based email and backup of their files over the Internet. In Texas, the owner of a small family-owned construction company wanted to write bid proposals and schedule jobs while traveling and liked the fact that CatalystOffice was entirely Web-based. In New York, a consulting company whose three partners worked from their homes liked the idea of an online office through which they could share files and contacts. Given these nation-wide trends, I was surprised to read recently a story detailing the efforts of Mozilla (which created the incredible Firefox browser) is focused on improving their installable desktop client. Old habits die hard, I guess.

The Web-Based Software Revolution

We were honored when we first found out that CatalystWeb was invited to participate in DEMO2008. For those of you who have never heard of DEMO, it is an invitation-only event where new technology products and services are launched; Google unveiled its now famous search engine at DEMO many years ago. It is attended by the top technology journalists in the country along with dozens of venture capitalists. As part of the program, I got to give a six-minute demo of our flagship service CatalystOffice. You can view it on the DEMO Website. We also got a lot of favorable press. In fact, Michael Miller from PC Magazine picked us as one of his top-10 favorite products. You can read his blog here.

We were happy to see that both the press and participants from the show validated our Software-as-a-Service (“SaaS”) or Web-based software delivery method. Several companies who were presenting at the show even signed up as customers. This doesn’t surprise me since many of them were startups and the founders were often in different locations. As startups, they also liked the fact that our introductory plan was not only totally free but also had all the features of our paid plans.

With Web-based software services, users don’t have to install anything or worry about upgrades. In the case of CatalystOffice, users can access their email and documents over the Internet from anywhere, anytime; all they need is the Firefox browser. They typically don’t have an IT department and they don’t have the resources to buy and maintain servers. Most importantly, they don’t have the time to worry about technology when they need to focus on their business. No wonder that America's 25 million small businesses are leading the Web-based software revolution.

CatalystOffice's unlimited-user license also resonated with reporters and participants at DEMO2008. I was often met with a quick look of surprise and then acknowledgment whenever I explained it to someone. Our model simplifies traditional software pricing that is often based on the number of users but also tends to be complicated and confusing to most small businesses. It also makes sense since most businesses have both heavy and light users and it is really hard to separate personal space from shared space.

The week after DEMO, I went to two tradeshows for small businesses. The first one was held in Ft. Worth, Texas and sponsored by the Fort Worth Business Assistance Center. The second was sponsored by smallbiztechnology.com and held in New York City. The interest in our service from small business owners at these two shows was phenomenal. They also gave us a lot of valuable feedback. I will talk about these shows in my next entry.