Small Business Labs

Fish 'n Flush, Niche Products and Innovation

Innovation is everywhere and the number of niche products continues to grow.  A great example of this is the Fish n' Flush, which is described by its manufacturer as "A whimsical potty that turns your toilet into a nautical wonderland."  They also describe the Fish 'n Flush as "another innovative product from AquaOne Technologies!". 

Blogging for Money

Lots of discussion these days about blogging for money.  Problogger, which in my opinion is one of the best blogs on how to make money blogging, has a blog post called "How Much Money Do Bloggers Earn Blogging".  It covers the results of an informal survey conducted by ProBlogger.  They asked how much bloggers earned from blogging in the month of October.  Their results:

• 28% earned nothing
• 49% earned under $100
• 23% earned over $1000
• 16% earned over $2500
• 9% earned over $15000

The survey had roughly 3000 respondents from ProBlogger's readership, which is obviously very skewed towards folks trying to make money blogging. 

This data reflects the two realities of the business of blogging: (1) most bloggers make little or no money directly from blogging; and (2) a small number of bloggers make substantial amounts of money directly from blogging.   

The reason for this is pretty simple.  Generating substantial amounts of revenues blogging can be done, but is not easy. 

Online Reviews and Offline Purchases

The Kelsey Group and comScore Networks released a study on in the impact of online user reviews on offline purchases of services.  They looked specifically at the impact of online consumer generated reviews on offline purchases related to restaurants, hotels, travel, legal, medical, automotive and home services. 

The research shows that for these categories online reviews are very infuential in off line purchases.  Key data points from the study press release (these are direct quotes):

• Nearly one out of every four Internet users (24 percent) reported using online reviews prior to paying for a service delivered offline.
• More than three-quarters of review users in nearly every category reported that the review had a significant influence on their purchase, with hotels ranking the highest (87 percent).
• Ninety-seven percent of those surveyed who said they made a purchase based on an online review said they found the review to have been accurate.
• Review users also noted that reviews generated by fellow consumers had a greater influence than those generated by professionals.

We've posted in the past on the growing importance of online user reviews on small business.  This study shows this trend is becoming even more pronounced and important. 

November ADP Employment Report - Small Business Yet Again Drives Job Growth

ADP released their monthly employment report and small businesses yet again created most of the net new jobs in the US.  According to ADP non-farm private employment increased 189,000 in November with small businesses (less than 500 employees) adding 159,000 jobs.  Big businesses (more than 500 employees) added 30,000 jobs, which reversed 5 straight months of big business job declines. 

With small business leading the way the economy continues to perform amazingly well given the combination of the subprime mortgage mess and $100 oil.  I've posted in the past on the possibility that the growth of small business is increasing the overall stability of the US economy and the job data continues to support this. 

Half the World Uses a Cell Phone; Mobile Internet Access Accelerating

According to a post on the Telecoms blog the European research firm Informa Telecoms and Media there are roughly 3.3 billion cell phone subscribers today, which is half the world's population.  Also interesting is that in 59 countries the cell phone penetration rate is above 100% - in those countries there are more cell phone subscribers than people.  They also figure that today only about 10% of world's population live in areas without cell phone coverage. 

The mobile Internet is also growing rapidly, particularly outside of the US.  mocoNews has a post on a comScore networks report showing that 53 million Japanese use cell phones to access the Internet - roughly the same number that use a PC to access the Intenet.  Not surprisingly the amount of time spent online is much lower per month with cell phone access (8.1 hours) than PC access (18.9 hours) - but 8 hours per month is still quite a bit.

Another interesting moblie computing point of view comes from a Silicon Alley Insider post on a Citibank research report on Google.  According to the research report mobile search market could eventually be as big as PC search.  Key quote from this post:

"Mark (the Citibank analyst) puts the global PC Search Market at $21B in '07, driven by 35 monthly searches per PC.  Just one monthly search per each 2010-estimated 4 billion mobile phones would generate mobile search revenue of $2.3B. Only 9 monthly searches per mobile device would create a market just as big as today's PC Search."

We spend a lot time on cell phones and their growing impact as Internet access devices in our forecast report on connected entrepreneurs.

 

The Emerging Buy Local Coalition

A clear indicator that a trend is gaining momentum is support by diverse interest groups.  This is happening with the trend of buying locally produced goods.  I got multiple responses to my post on Conscious Consumers, which mentions that consumers are getting more interested in buying products made in the USA.  Through this feedback I found out about a range of made in the USA sites and resouces, including:

• The Made by Yankees blog which covers products made in the US.  They also have a made in the USA product finder.
• The Made in the USA blog which also covers made in the USA products.
• China Free Christmas blog which focuses on toys and where they are made.
• Made in the USA magazine. 

Obviously support for products made in America and efforts to reduce foreign imports are nothing new. Leading up to the Boston Tea Party, US patriot and tea smuggler John Hancock organized a very effective boycott of Chinese tea imported by his foreign competitor, the East India Company. 

What is interesting is how many different consumer segments are involved in the buy local movement.  These include:

• Buy American types who are worried about the US economy and job loss.   
• Safety types who are worried about unsafe and/or inferior foreign made products.  I've posted in the past on the growth of local food production, which is in part driven by safety concerns. 
• Environmentalists who see buying locally as more sustainable.  Bill McKibben's book Deep Economy covers this trend. 
• Consumers who are looking for unique, one of a kind or handcrafted products.  This growing consumer segment often looks to local or regional producers for these goods.

We're not the only ones seeing a trend toward localism.  Nokia just released a study looking at the future of entertainment and one of their key trends was localism.  From their study release:

"The report uncovered a locally-minded sprit emerging in entertainment consumption and Localism will become a key theme of future entertainment. Consumers will take pride in seeking out the local and home-grown."

The growing coalition of consumers who are increasingly interested in buying local, coupled with new and cheaper technologies that better enable local production, is resulting in a range of new small business opportunities.  We will be covering this trend in more detail in our next forecast report.

Small Automotive Manufacturing Companies

I'm very intrigued by the growing number of start-up automotive manufacturing companies.  Over the last 5 years dozens of car companies have started in the US in abroad.  I find this interesting because the auto industry is one of the most captial intensive, heavily regulated and complex businesses around.  It is also a highly competitive industry dominated by a small number of global giants. 

The main driver of this trend is a belief by entrepreneurs that the auto industry is not moving quickly enough to produce more environmentally friendly cars.  Most of the new automotive start-ups are basing their business around improving gas mileage and/or reducing emissions.  Most are building electric or hybrid vechicles. 

The main enabler of this trend is it getting much easier and cheaper to build things.  These start-ups are using a mix of outsourcing and low cost fabrication to build their cars.  The New York Times recently had an article on automotive start-ups.  Key quote on how one of the companies is using third party outsourcing:

"They have since signed contracts with some of the biggest names in the auto business, including California Motors, which specializes in propulsion systems; Swift Engineering, which builds suspensions and drivetrains; and the American subsidiary of a major European automaker (whom they have declined to name publicly) to design the car."

Bascially the start-up is acting as a system integrator, putting together an automobile from components supplied by larger, world class automotive suppliers.  Because of this their capital requirements and fixed manufacturing costs are much lower.  According to the article an automotive fabrication plant costs around $5 million verus more than $500 million for a traditional manufacturing facility.

While it is not clear these companies will be commercially successful, it is clear that small businesses are entering and competing in a growing number of industries - including industries that have traditionally been view as solely the domain of large, vertically integrated enterprises.  We will be covering this trend in more detail in our next forecast report.

Expert Business Planning Videos Online

Business planning expert Tim Berry has several business planning videos available online.  Free expert advice - not bad.  They are (from his Up and Coming blog):

Develop Your Business Plan: the SBA Version.

The not-so-big Business Plan: Webinar for the Young Inventors International organization, September-October 2007.

My list of Top 10 Mistakes in Venture Contests: This one has been delivered several times in several variations for several graduate business programs.

A simple review of Basic Business Numbers: A quick look at what you need to know, how the numbers come together, what are the standard formats.

Facebook Ad Update

For fun I've been running several ads on Facebook to see how it works.  The ads market this blog.  So far the campaign has been a complete failure and I have only a very small number of click throughs.

While Facebook is hardly the ideal place to advertise a blog focused on small business trends, I thought I would generate at least a few clicks each day.  I'm going to revamp my campaign and try again.  The good news is advertising on Facebook is very easy and kinda fun.  If nothing else, I've impressed and horrified my kids and their friends with my Facebook activity.