Small Business Labs

Franchising Diversifies and Expands

One of my new year's resolutions is to carve out some time to look at franchising industry trends.  The franchising industry is a major sector of the US economy.  Depending on the data source, franchises employ between 7-9% of all American private sector workers.  It also continues to grow and diversify, with new franchise concepts in a wide variety of industries.

It also is an interesting organizational model, with a central core company and lots of affiliated small businesses.  This general type of structure is emerging in many industries - although not with the tight financial and legal requirements of franchising.

The International Franchise Association has a series of reports profiling the changing franchise industry. 

Coworking Photo Tour and Fortune Article

There is a really cool slide show of a group of SF coworking facilities at Lion Photography.  The photographs were taken during a coworking tour and the group got around SF on Biodiesel Betty's renewable fuels bus.  The Civic Actions blog describes the tour.

On a related topic Fortune has an article on coworking that does a nice job explaining what coworking is. 

Coworking as a work concept has grown quite a bit since we first starting following this trend several years ago.  While coworking for office working gets most of the attention, we are seeing a growing trend of "coworking like" shared resources in other areas. 

We posted earlier on TechShop, which is a coworking facility for hard core DIYers, and on the National Nanotechnology Infrastructure Network which consist of coworking facilities for nanotech companies.  The shared resource concept is part of a much broader trend of high cost facilities and equipment becoming "rentable".   

Inc. on Home Businesses

Inc. has an article on the growth of home based businesses called "Escape from Cubicle Hell."  Key quote:

"From retirement-averse baby boomers to Gen Y-ers disillusioned with the corporate world, a growing number of people are starting businesses out of their homes in a wide range of industries."

Not a lot new in the article, but it does a nice job of summarizing a number of trends that are driving the growth of Personal Businesses (single person businesses).  For more details on these trends and the rise of Personal Businesses take a look at our forecast report "The Changing Face of Entrepreneurs".   

2008 Technology Predictions Continued

Prediction season continues.  I've already done two posts on technology predictions, but more keep coming. 

               ** 3 Jan 08 - I've added an updated consensus 2008 technology predictions list **

1. The social networking news site Mashable has several prediction lists - Mark's list, a list of things that won't happen in 2008, Sean's list, and Adam's list.  The consensus of these forecasts is that 2008 will be a good year for mobile social networking and blogs in general, and there will be substantial Web 2.0 company consolidation. 
2. The Economist has an interesting list for 2008.  Their 3 predictions are (1) the Internet is going to slow down due to traffic increases and video; (2) Web surfing will detach - not entirely sure what this means but it seems to have something to do with mobile; (3) open systems will increase in importance, or at least I think that is what they are saying.
3. The ReadWriteWeb blog has a great list of predictions from a mix of their contributors.  Google and Facebook mentioned often, as well as mobile.
4. The excellent Ypulse blog has tech predictions related to teens.  Not surprising Facebook and mobile mentioned. 
5. Pathfinder has their AJAX predictions for 2008.  This is a pretty geeky list, but I really like their prediction on rich internet applications, which is: "Desktop RIA's through Google Gears, Adobe AIR, etc., will start to make an impact in the second half of 2008. Look for desktop/web hybrids of the office productivity tools, such as word processors and Powerpoint clones, to see greater use in the corporate IT space."
6. PC World's Predictions for 2008 include mobile and green computing as well as software industry consolidation.
7. 47 Hats has a list that insults older programmers, with the definition of old being "over 30". 
8. eMarketer has a good list related to advertising. 
9. Personal Branding Blog has a list.  It is not related to technology per se, but I figure we all need help with our branding. 
10. iVillage has their 2008 Astrology predictions.  Ok, it isn't relevant to much of anything but I did learn that "exotic travel plans" are in store for me in 2008.

Google and Large Datasets

One of Google's blogs has a very interesting post called "Google is All About Large Amounts of Data".  The blog post talks about how Google is using their access to large datasets to improve search and speech recognition software. Key quote:

"As we get more data from more interaction with users and from uploaded videos, our systems will improve because the data trains the algorithms over time."

Basically what they are saying is the more data the better the results.  Better results means more usage, which leads to more data.  This is a classic example of economic concept of increasing returns to scale, and is a key reason Google continues to gain share in advertising, search and other areas. 

Scale used to require physical assets in the form of manufacturing plants and equipment.  In the online world scale is about the ability to collect, analyze and mine data.  This is as true for small businesses as Google.

The SBA on Self Employment

I've been crunching through the SBA's annual Small Business Economy report.  They have an interesting table on self employment showing that about 10% of Americans are self employed (table 1.3 on page 20). 

Going to the more detailed data on Table A.13 on page 318, we find that total number of self employed is 15,739,000 and that the number of self employed grew by 13% between 1995 and 2005. 

Other interesting data is that hispanic self employment is up almost 100% during that period and self employment among those 55-64 increased roughly 47%.  Both populations grew during the period,but the numbers are still quite impressive.

The SBA also has a working paper on this topic that reports that individuals with more schooling are more likely to choose self employment, as are those with more wealth and those with military experience.

Happy Holidays

Happy Holidays from all of us at SmallBizLabs. 

Shared Nanotechnology Labs and Small Business

The National Science Foundation has funded a group of universities to allow outside companies access to their nanotechnology labs.  Called the National Nanotechnology Infrastructure Network, the program allows small companies, start-ups and even large corporations access to world class nanotechnolgy equipment on a rental basis.  So far over 700 companies - mostly small companies - have rented space in the labs. 

Two key quotes.  The first from a company making industrial diamonds:

"We have our own equipment for making the diamond," Kane said. "But all of the subsequent steps require access to a clean room, to tens of millions of dollars of equipment that no small company could ever afford. Many big companies can't afford it either."

The second from a company talking about the advantages of being able to rent the labs:

"It's the fixed costs that kill you," said Matt Miller, chief executive of Multispectral Imaging Inc. of Parsippany, N.J., which is renting lab time for two of his researchers at Cornell. Miller's three-year-old startup is developing thermal imaging technology to help find people trapped in burning buildings."

The availability of world class business infrastructure on a variable cost basis is fundamentally changing all aspects of R&D and manufacturing.  Small companies can now enter and compete in industries - like nanotechnology - that used to require huge fixed cost investments for plant and equipment. 

The Writers Strike, Media Fragmentation and Small Business

Interesting article in the LA Times on striking writers negotiating with VCs to set up new online entertainment companies.  These groups are looking to start small, web-based entertainment companies.  Key quote:

"We are one Connecticut hedge-fund checkbook, one Silicon Valley server farm and two creators away from having channels on YouTube, where the studios don't own anything."

Media in all forms continues to fragment with and small media companies are flourishing is a wide variety of media segments.  Entertainment is no exception and while most writers will return the studios after the strike, many will move to small entertainment companies. 

Craig Newmark's Boomer Unretirement

Craig Newmark is the founder of the popular online classifieds site Craigslist. He spoke at an event I attended last week.  During the Q&A he was asked about his exit strategy for Craigslist.  His response was "death is my exit strategy."

We've posted in the past about boomers wanting to continue working well past traditional retirement age.  While Craig is likely an outlier, he is a good example of boomer's views towards retirement.