Outside Voices: Small Business
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A Venture Capitalist View of the Top 5 Entrepreneurial Energy Opportunities
Continue reading… 2 CommentsAccel Partners is one of Silicon Valley's premier venture capital firms. Over the 25 years that it has been in business, Accel has funded way too many successful start-up companies to list here.
Accel is aggressively investing in energy-related start-ups and recently released Entrepreneurial Energy, a white paper covering its analysis of this market. The conclusion: Changes in the energy industry are creating a wide range of opportunities for small, entrepreneurial companies.
I caught up with Accel VCs Rich Wong and Craig Lawrence to discuss the energy sector and the white paper. They see five key energy areas as having the best small-business opportunities in the coming years:
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Will the Recovery Be Jobless?
Continue reading… 4 CommentsThe U.S. economy shrank only 1 percent in the second quarter, which is better than most economists expected. This has led to a number of economists bucking the consensus view that the recovery will be slow and feeble. Instead, they are predicting a V-shaped recovery with robust economic growth starting this fall.
But even if the optimists are right and the recovery is strong, we expect that traditional job growth will be weak.
In this highly uncertain, competitive, and volatile economy, companies are hesitant to add full-time staff. Instead they are looking to contractors, outsourcing arrangements, and business partners to provide flexible workforces that quickly and easily scale up and down in response to business change.
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7 New Rules for Small-Business Growth
Continue reading… 3 CommentsThe hardest growth in small business is the second bump, like a second wind—what we call emerging companies. It comes when you conquer the first long uphill climb, and then you pause. And, if you're not careful, you have trouble coming out of pause. Maybe we can call it malaise.
I had a good talk about this the other day with Lisa Nirell, founder of EnergizeGrowth ® and author of Energize Growth NOW, whom I've known since she and her husband moved up to Oregon from California three years ago. I'm sympathetic to that path, because I took it about 17 years ago, when I moved up to Oregon from Palo Alto.
In Lisa's case, her consulting firm focuses on finding that second wind for companies that made it to the top of the first hill and want to get the energy back. When we talked, she said her favorite readers are
"Leaders running growth companies who want to maintain a certain level of growth while also making a difference in the world. A holistic way of growing their business instead of growing at any cost."
When Lisa says "holistic," she's not talking about so-called touchy-feely business counseling. Her book is totally grounded in the real world. It's not a matter of magic formulas or complex frameworks.
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How Many Small-Business Employees Are Out There?
Continue reading… 6 CommentsWith the debate around healthcare legislation heating up, a lot of attention is focused on the role small businesses play in the U.S. economy. I often read and hear that most Americans work for small businesses.
But it is interesting to note that not everyone agrees on what a small business is, how many there are, or how many people work for them.
According to the Census Bureau and the Small Business Administration, about 60 million Americans worked for small businesses in 2006. This is about 51 percent of the private, nonfarm U.S. workforce. They define small businesses as private firms having fewer than 500 employees.
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No 'Anti-Obama Small-Business Bailout,' Please
Continue reading… 24 CommentsI've been getting surprisingly obnoxious unsolicited E-mails from somebody calling himself "America's business coach." He's calling an annoying offer of a free E-book his anti-Obama small-business bailout.
By the way, he's not who you might think. He's not Brian Tracy, or Barry Elms, or Thomas Winninger, or Lisa Bilal, or Maria Masala. His name doesn't turn up in the first few pages of any major Web search. I checked.
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Small Businesses Not Seeing Impact of Stimulus Package
Continue reading… 5 CommentsAccording to a recent survey by Intuit Corp., the vast majority of small businesses have not benefited from the stimulus plan—nor do they expect to.
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Make It Easier on Your Customers
Continue reading… 11 CommentsEveryone is in customer service. All of us have the responsibility to help customers. In large companies, though, it can become a struggle to find a real live person to help with a problem.
Jeffrey Hayzlett, chief marketing officer at Kodak, talked at the 140 Conference in New York about how large companies are using Twitter to put customers in touch with a real live person to get them help with their products. Corporate management may ask, what's the return on investment on Twitter? Hayzlett replies, well, what's the ROI on ignoring customers?
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Is There Too Much Venture Capital?
Continue reading… 0 CommentsThe National Venture Capital Association recently released its first-quarter 2009 analysis of venture investing. Not surprisingly, the number of venture investments was substantially lower than in recent years.
In Q1, there were only 549 venture deals adding up to a bit over $3 billion in funding. This was the lowest number of Q1 deals since 1995.
Many see reduced venture funding as a huge problem. But others believe that the industry investment rate of $25 billion to $30 billion per year over the past decade is way too high and that the venture capital industry needs to be restructured and to shrink.
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Start-Ups Should Think About Charging for Content
Continue reading… 11 CommentsThe Newspaper Association of America recently hosted a meeting of the nation's top newspaper executives to discuss charging for online content. Several San Francisco Bay area newspapers, including my local paper, have already announced plans to charge for news. They are joining a number of online content providers attempting to charge end-users for content.
The reason for this shift is straightforward: Advertising-supported content providers are having a hard time making money. This is especially true for traditional media companies, which tend to have higher cost structures because of their legacy offline businesses.
Many start-ups and small content companies have already recognized the need to move to fee-based business models. Open Table, for example, charges restaurants a fee for each reservation made through its service. Its recent IPO success has resulted in even more interest in fee-based services.
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What the Stimulus Package Means for Small Business
Continue reading… 7 CommentsThe American Recovery and Reinvestment Act of 2009, better known as the stimulus package, was signed into law by President Obama in February. It amounts to $787 billion in government spending, incentives, and tax cuts designed to kick-start the economy and create or save 3 million to 4 million jobs over the next two years.
There has been much debate about the merits of the stimulus package, especially as it relates to small business. But regardless of how you feel about the stimulus package, it is starting to create opportunities for small businesses.
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Clean-Tech Investment Is Falling: What Does It Mean?
Continue reading… 1 CommentThese days, clean technology is the rage among the political elites. And there is a great deal of support in Washington for companies developing these technologies. Unfortunately for the politicians, the venture capital market doesn't respond strongly to political rhetoric.
According to data recently released by NVCA, the National Venture Capital Association, investment in clean-technology start-ups fell 84 percent from the last quarter of 2008 to the first quarter of 2009. The decline in clean-tech investment was much higher than the overall decline in venture capital investment, bringing clean-tech investment activity back to levels last seen in 2005, before the clean-tech investment craze began.
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Susan Boyle and Small Business
Continue reading… 9 CommentsI think that even if you've been living in a cave, you've probably heard about Susan Boyle. She is the amazing singer who has become an international celebrity after her show-stopping performance on the Britain ' s Got Talent TV show.
The online success of the clip of Boyle singing is simply amazing. According to the online video measurement firm Visible Metrics, in less than five days, clips of her singing were viewed more than 47 million times and generated more than 125,000 comments.
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Small-Business Borrowing Still Hasn't Improved
Continue reading… 14 CommentsI recently took a look at National Federation of Independent Business data on the satisfaction of small-business borrowing needs and was struck by the continued downward trend. According to the NFIB data, fewer small businesses said in March that their borrowing needs had been satisfied in the previous three months than at any point since well before the recession began.
In their monthly survey of a random sample of their members (who are small-business owners), the NFIB asks respondents whether their borrowing needs were satisfied in the previous three months. In the figure below, I have produced a chart of the seasonally adjusted percentage who said yes, along with the trend line.
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Business Success Sometimes Requires a Leap of Faith
Continue reading… 1 Comment"Sometimes you just have to jump. I call it a leap of faith. You don't get to know. You've studied as much as you can, you've talked to your customers, and you just jump off."
Those were the words of my seatmate yesterday on a small plane from Oregon to California. He was sharing the story of how his business, Imagine Graphics of Eugene, Ore., has rebuilt itself in recent years with a big new building, a new name, and a lot of new business. He and his wife own it. Business doubled in 2007 and did double-digit growth last year, and he's holding that growth rate this year.
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Revitalizing Cities Also Revitalizes Businesses
Continue reading… 0 CommentsPlace Matters is a report from the think tank Center for American Progress that describes the importance of regional or local industrial clusters to economic growth and the creation of new jobs and companies.
Industrial clusters are geographic areas where groups of similar companies concentrate. The best-known cluster is Silicon Valley, but industrial clusters large and small exist in many places around the world.
The consulting firm McKinsey has released an interesting map of global industrial clusters. The map ranks clusters by size and growth rates and illustrates the growing number and diversity of industrial clusters.
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Statistics Can Deceive When It Comes to Small-Business Jobs
Continue reading… 0 CommentsSo I'd say that I'm drowning in information lately, except that 1) you wouldn't be very sympathetic, because you are too; and 2) it's not information that oftenit's often half information or fake information, or merely good intentions.
Surveys and Statistics Vs. Truth
We forget so easily that when a survey shows X percent of respondents prefer Y over Z, that doesn't make it true. That means only that this survey, with this group of respondents, came out that way.
Maybe you took statistics in college, maybe not; and maybe you did but (like me) you've forgotten most of it. Remember this, though: If it doesn't start with a random sample, it's not likely to mean that much.
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Are Nonemployer Businesses Really Entrepreneurial?
Continue reading… 0 CommentsOne of the difficult statistics for entrepreneurship researchers to understand is the vast majority of people who run their own businesses but have no employees. According to the U.S. Census Bureau, in 2002 (the latest year for which data are available publicly), there were 23.3 million firms in operation in the United States. However, only 5.7 million of them (24.4 percent) were employer firms. That is, three quarters of U.S. entrepreneurs had no employees.
Moreover, most of these nonemployer businesses are truly tiny. According to the Census Department data, U.S. firms generated $22.8 trillion in revenue in 2002. But less than 3.4 percent of this revenue came from nonemployer firms. The average revenue of a nonemployer firm in 2002 was only $45,000.
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Don't Be So Hard on the Bankers
Continue reading… 3 CommentsI hate to take an unpopular stand on something, but jeez, we’re making it awfully hard on the poor bankers.
For as long as I can remember, we in the world of entrepreneurship groused about how the banks wouldn't invest in a good business plan. Being a contrarian, I’ve tended, through some 30 years of this, to remind people that banking law used to forbid that. Ever since the Great Depression, regulations wanted banks to have collateral before they risked depositors’ money.
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The Angel Investment Crunch
Continue reading… 9 CommentsBusiness angels invest their own money in private companies run by someone other than a friend or family member. And accredited angel investors are the portion of these investors who meet Securities and Exchange Commission requirements for having either high net worth ($1,000,000 or more) or high income ($200,000 plus for single people and $300,000 plus for married couples).
Many people believe that accredited angel investors are an important source of early-stage financing for high-growth technology companies. Most angel groups are composed solely of accredited investors, and accredited angels are the ones that anecdotal evidence suggests provide pre-venture capital financing for many companies that ultimately go public or get acquired by public companies.
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Real Small-Business Stimulus Starts With SBDC
Continue reading… 5 CommentsQuietly, outside the headlines about bonuses and bailouts, the smarter entrepreneurs among us head to their local SBDC. There, they find classes on starting a business, classes on running a business, classes on business planning, tips, introductions...and sometimes just a touch of real-world experience, when it's badly needed.
SBDC stands for Small Business Development Center. There are about 1,000 of them across the United States. To find an SBDC near you, you can use the map at bplans.com or the umbrella organization website at asbdc-us.org.
