Small Business Labs

Is Facebook Taking Over the Web?

With Twitter getting so much attention these days, Facebook almost seems to have drifted into the background.  But the more you look at data on web traffic, the more you realize how big a force Facebook has become. 

The chart below is from Mary Meeker's presentation at the Web 2.0 conference a few weeks ago.  It clearly illustrates Facebook's rapid rise to key web player status.

 

Marketing Charts has another angle on the growth of Facebook.  Their chart (below and sourced from Nielsen) shows the top 10 U.S. Web brands by unique visitors and time spent in September.  Facebook is 4th in terms of audience size and 1st in terms of time spent per person.

 

What is striking about Facebook is not the size of their audience or how much time people spend on the site.  It is their growth rate on both metrics that is impressive.  They are quickly becoming the place people hang out on the web. 

Despite these numbers, the vast majority of small businesses do not need a Facebook presence at this time.  It is not yet a site most customers turn to for business purposes.

But it is time to pay attention to Facebook and start to understand how you can use it for your business - because the day is coming when a Facebook presence will be required.

The Greying of the Workforce

Pew Research recently released a study on the aging American workforce.  The study echos other research showing that the workforce is aging and many older Americans want to work beyond the traditional retirement age.  Key quote:

"According to one government estimate, 93% of the growth in the U.S. labor force from 2006 to 2016 will be among workers ages 55 and older."

The report introduction has two charts that nicely summarize Pew's findings.  The chart below shows that over half of workers over the age of 65 work because they want to.

 

The second chart (below) shows the impact of the recession on retirement age plans.  Many boomers are now expecting to delay their retirement because of the economic downturn.

   

The recession has come at a bad time for the nation's 76 million baby boomers.  The early boomers are just past the age of 60 and don't have a lot of time for the financial markets to recover before they reach traditional retirement age.  Even younger boomers have seen their retirement assets and home values decline enough to be concerned about retirement funding. 

The good news is (well, at least sort of good news) many baby boomers want to work past the traditional retirement age.  The other goods news is boomers will be healthiest older generation ever with many boomers able to work productivity well past retirement age. 

Prior to the recession we were forecasting that over half of baby boomers would work past the traditional retirement age.  Because of the recession, we now believe this number will be higher.

Political Uncertainty and Small Business

Today's Wall Street Journal features the front page article Political Uncertainty Puts Freeze Freeze on Small Businesses. 

The article points out that while the economy is the biggest issue facing small businesses, uncertainty about three public policy issues is resulting in many small businesses reducing staff, delaying expansion and cutting costs.

The three key policy issues listed as causing the uncertainty are:

1. Health care reform and the risk of much higher health care costs
2. The end of the Bush tax cuts and the risk of increased taxes in general
3. Potential costs associated with climate change legislation (cap and trade)

We're also hearing about these concerns in our interviews and discussions with small business owners.  Part of this is the publicity health care reform is getting.  Also contributing is most small business owners have a natural aversion to taxes and government intervention in the economy. 

Government's role in the U.S. is expanding and small business owners are much more focused on government policy than at any time in the recent past.  Policy makers need to be aware of this increased scrutiny and understand the impact of their debates and plans.

Inc. on the Future of the Human Body

Inc. has an interesting article covering 10 medical technologies that promise to improve the quality of life and potentially reduce the costs of health care.

As the article is kind enough to point out, there are 78 million baby boomers and the oldest of this cohort are about to turn 65.  According to the article:

"Keeping all those bodies in good working order represents not just a challenge but an unparalleled business opportunity."

It is interesting to note that many of the technologies listed fall into a category called "human augmentation" by futurists.  These are technologies or drugs that improve or enhance humans.  This category includes everything from memory enhancing drugs to artificial limbs to genetic engineering. 

Not too long ago human augmentation was something that only happened in science fiction.  It is quickly becoming a reality.  

With health care spending close to 20% of U.S. GDP and growing, the opportunities in health care are enormous.  Longer life spans and the large cohort of aging boomers means even if we somehow get control of health care costs, demand for health care will continue to increase for at least several decades.

Demand for human augmentation will also grow to substantial levels and add to the size of the health care industry. 

 

The Growing Customer Acceptance of Home-Based Businesses

One of the key trends driving the growth of home-based businesses is the increased willingness on the part of customers to buy from them.   This shift in attitudes has made it much easier for home businesses to be successful.   

The BusinessWeek article, The Rise of the Homepreneur, includes coverage of this trend.  Key quote:

"But just as important, there has been a change of consciousness in the business world to recognize home-based enterprises as legitimate."

Most trends - and especially attitude shifts - take a long time to enter the mainstream.  The growing acceptance of home businesses started many years ago.  The underlying, inter-related drivers of this trend include:

1.  The rise of telecommuting and mobile computing:  Telecommuting exposed many people to working from home.  This led to a broader understanding that real work can be done from a home office.

2.  The blending of work life with home life:  Similar to telecommuting, the blending of work and home life is now common for many and again shows that you don't have to be in a traditional office to get work done.   

3.  The interest in work/life balance:  Work/life balance has become an important issue for many.  Many see home businesses as a way to help achieve better balance.  Because of this, there is more acceptance of people who choose to work from home.

4.  The realization that home businesses can be cost efficient:  Many homepreneurs stress the cost efficiencies they gain by being home-based.  This allows them to be very price competitive, which is attractive to their customers. 

While tipping points are hard to discern or predict, we believe customer acceptance of home businesses has reached a tipping point.   With millions of home businesses in the U.S., we've reached the point where many Americans have worked with or know a homepreneur. 

For more on home businesses and homepreneurs, see our research report Homepreneurs - A Vital Economic Force.   

The Rise of the Homepreneur

BusinessWeek's article The Rise of the Homepreneur covers the growing role home-based businesses are playing.  The article references our research report on homepreneurs, which is based on data from the Network Solutions Small Business Success Index.  The report is available here.

Some of the key findings include:

• Home businesses employ over 13 million people.
• Nearly 6.6 million home businesses generate at least 50% of the owner's household income
• 35% of home businesses generate $125,000+ in revenue; 8% more than $500,000.

The Small Business Success Index project is an excellent resource for understanding small businesses.  The project is a collaboration between Networks Solutions (an Emergent Research client), The University of Maryland's Robert H. Smith School of Business and the marketing research firm Rockbridge Associates. 

The Success Index is a longitudinal study designed to track small business competitiveness and success over time.  They've done two survey waves so far, one early this year and one over the summer.  They are going to continue with this cycle going forward. 

In addition to being the only source I'm aware of for survey data on small business competitiveness and performance, they also collect a mix of other data on small businesses. 

We're looking forward to studying the new Small Business Success Index data as it becomes available.  Having someone else do the hard work of data collection - and then letting us play with it - is great fun for us. 

Why Do Surveys Show Big Differences in Smallbiz Social Media Use?

It seems like there is a new survey on social media use by small businesses almost every day.  It also seems there has never been a topic with such differing survey results. 

Some surveys say 50% or more of all small businesses are using social media.  Some say less than 10%.

The reason is different survey methods are being used and different small business groups are being surveyed.  

Marketing Charts, for example, reports on an online survey by Internet2Go that shows high small business social media use.  The survey authors are very clear about who they surveyed.  From Marketing Charts:

"The survey, which targeted the most frequent content publishers among MerchantCircle’s small businesses members, found that 45% of this leading-edge group have a presence or profiles on Facebook and Twitter and use social media to promote their businesses online."

So this survey provides useful information on leading-edge users and is an interesting look at where the overall small business segment may be heading.  This is great stuff, but not meant to reflect where the broader small business segment is today. 

A recent Citibank survey showed much lower social media use.  They surveyed a broad cross section of small businesses.  It is a good snapshot of where the overall small business segment is today, but provides little information on where social media use is going.

Another example is the BIA/Kelsey survey released this week.  I don't know how this survey was done, but their results - 9% of small business respondents currently use Twitter to promote their businesses - likely indicates a survey of a leading-edge group.  But before I would use this information, I would need to better understand how the survey was done. 

All of these surveys are good, useful and add to our understanding of social media use by small businesses.  But if you just read the survey press releases or short articles on these surveys, it is easy to be confused and think they all apply to the entire small businesses segment.  Unlike the Marketing Charts example, important details about how and who was surveyed are often left out of press releases and articles. 

So as you read survey results, take an extra minute to check out how the survey was done and who they surveyed.  This will cut down on confusion and provide a better sense of how to use the data.

Green is the New Black for Baby Products

The Washington Post has a great article talking about the greening of high end baby products.  It points out that the luxury baby products market has contracted substantially since the start of the recession. 

But one area that continues to grow is the high end green baby products segment. 

My favorite example is the Uppababy product line.  The picture on the right is the Uppababy Vista stroller, which retails for $699 and is so cool it almost makes me wish my kids were still babies.  From the article:

""We use organic products whenever possible," said (Uppababy) spokeswoman Sarah Hines, who adds that the fabric used in the firm's bassinet is lined with "organic soybean fiber and cotton" and that the Vista's sun shade provides baby with SPF-50 protection from solar rays."

The movement towards green and sustainable products continues to grow.  And while the recession has dented growth for many green products, the baby products market shows demand for green is still in place. 

UK Small Businesses Expect Upturn in 2010

BT Business recently released the results of a survey of small and mid-sized British businesses.  Lots of interesting data and findings, including:

1. 75% of UK small businesses believe the economy will see an upturn in 2010

2. 35% predict an improvement by January 2010

3. 45% say their business operates for the better as a result of the downturn

4. 41% believe small businesses will innovate and diversify to create new industries as the UK emerges from the downturn

A bit orthogonal to our topic, we often get questions about social media press releases.  The press release for this study is an excellent example.  It has the key data, quotes, videos and contact information in one place and organized to make it very easy to write about the study. 

What's After Web 2.0? Web Squared

The Web 2.0 trade show is happening this week in San Francisco.  The term Web 2.0 was coined by the O'Reilly Group about 5 years ago to refer to a couple key Internet trends that were emerging at the time - the Internet as a platform for applications and as a platform for collecting and sharing collective intelligence.

The term quickly caught on and these concepts have entered the mainstream.  Since it has been 5 years, many are asking "what's next?" 

According to O'Reilly, it is Web Squared.  The basic idea behind Web Squared is that web activity will grow exponentially as sensors and other information capture technologies (RFID, 3-D barcodes, cameras, voice recognition systems, GPS systems,etc.) add a flood of data and expand the range of possible applications.

This is similar to the concepts of The Internet of Things - a term coined in the late 90s by Kevin Ashton while at MIT's Auto ID Center - and Pervasive/Ubiquitous Computing, terms and concepts which have been around since at least the 80s. 

New technologies tend to take a long time to move from the idea stage to the mainstream.  And often, technology forecasters believe they will arrive much sooner than they do.  The flying car and paperless office are good examples and missed technology forecasts are much more common than accurate ones.  Because of this, I tend to be more than a bit skeptical of technology forecasts - even ours:).

But in this case I'm very much paying attention.  The O'Reilly Group has a deep understanding of web technologies and have proved themselves to be excellent technology trend spotters. 

So expect to hear and see a lot more on Web Squared over the next year. 

We cover many of the Web Squared technologies in the Intuit Future of Small Business report The Connected World of Entrepreneurs, which was released in 2007.  We're working with Intuit on an update of this report and expect to release a new forecast in the first half of 2010.