Small Business Labs

Young Businesses are Job Creators

Where Will the Jobs Come From? is a new study from the Kauffman Foundation showing that newly created and young companies are the primary drivers of job creation in the United States.

According to the report, in 2007 young firms in their first 5 years of operation created 75% of all new jobs added to the U.S. economy. 

Also interesting are the leading job creating industries.  Food and accommodation was first, health care second and retail 3rd.  Combined, these three industries created close to 40% of new job jobs in 2007.  The chart below is from the report. 

Intuit Trends - Social Data on Small Businesses

"Social data" is the buzzword that describes sharing aggregate or summarized data collected from or contributed by large numbers of users. 

A good example of social data is Intuit Trends, an early alpha product available on Intuit Labs.  Trends uses aggregated company financial data collected from the online version of the accounting package Quickbooks. 

The application lets small business owners, managers and their advisers explore industry financial trends, share observations, and compare their performance with their peers and/or competitors.

Social data applications only work if data specific to individuals or companies is kept private and secure.  Intuit Trends and other social data applications accomplish this by only providing access to aggregate or summary data, thus protecting the privacy of the data sources.

While the buzzword is new, the concept is not.  Industrial companies have long provided product service and performance data based on information collected from their customers.  But this has been expensive and hard to do.

The Internet in general - and cloud computing in particular - has changed this.  With data rapidly moving from individual PCs and servers to the cloud, social data applications are much cheaper and easier to develop and deliver.

We've recently been briefed on over a dozen social data applications currently under development.  These applications target a range of industrial and consumer markets.

Social data will be a hot field in the coming years and we expect substantial growth in the number, range and power of these applications. 

Disclosure:  Emergent Research has done work for Intuit in the past year.

The Growth of Small Business Analytics

There were two very interesting blog posts related to the use of analytics by small businesses over the last week.  Both caught my eye as interesting examples of the trend towards analytical software and automation.

The first comes from Tim Berry's blog via MyVenturepad.  Tim writes about the Huffington Post using A/B testing to pick article headlines.  Online A/B testing is a process where different people are randomly shown different versions of a web page, or in this case different article headlines.  After testing with a number of people, the version with the most success (in this case clicks) is then shown to everyone else. 

A/B testing has been in use for a long time in the direct mail industry and is commonly used by larger online firms.  It is interesting to see the use has spread to things like article headlines.

The other post comes from the American Express Open Forum blog and is written by Anita Campbell.  The article, Are You Ready For the Trend towards Marketing Automation, discusses the growing number of systems a small business can use to automate marketing processes.

The use of analytical tools is becoming key to business success, regardless of the size of the firm.  Small businesses need to be aware of this trend and understand how analytics can improve their performance.  These two articles are a good place to start.

When Do Megatrends Matter?

An interesting part of the trends business is trend identification is easy.  The hard part is figuring out when a trend will have broad impact and matter to businesses. 

iMedia Connection's article 5 Marketing Megatrends You Can't Ignore looks at megatrends that marketers should care about.  The author defines megatrends as:

"What's a megatrend, you ask? It's something big. I'm talking really big. Think of a giant unstoppable tsunami of change transforming society as we know it. Think global warming scale -- then apply it to mass human behavior. Think glaciers carving the grand canyon of consumer sentiment."

So megatrends are really big trends, as opposed to everyday trends like a fashion trend. 

The author lists 5 new megatrends he believes will transform society in the coming years:

• Mass collaboration is powering the new economy
• Constant connectivity in an on-demand world
• Globalization
• Pervasive distrust of big corporations
• A global sense of urgency to mix the problems of the modern world

What's interesting about these "new" megatrends is all have been talked about, at least in the trends community, for many years - even decades.  This does not mean the list is bad or late.  Trends take a long time to reach the point where they matter. 

One of the key indicators that a megatrend is starting to have broad impact is discussion and activity across multiple disiplines.  All of these trends have reached that point - and all of these trends matter or are starting to matter to small businesses. 

Traditional Business Media Cuts; New Media Grows

Good article in the NY Times about traditional media business publications reducing staff and coverage.  The usual reasons - lack of advertising, readers fleeing print publications for online, etc. - are given for the decline. 

The article goes on to talk about readers being less interested in business news. 

This simply isn't true.  If you add in business coverage coming from new media companies like TechCrunch and others, you find that overall business related media coverage and readership has increased over the last decade.

What is true is there much less reader interest in print.  But like many articles coming from traditional media, they mistake traditional media's business model and distribution problems with a lack of demand. 

But one place this shift has definitely led to a decline is the quality of the reporting and writing.  The paragraph below from the NY Times article is a great example of prose you rarely see in new media:

Business coverage has been, at its heart, aspirational, a brand promise that suggests that if you clip the right articles, internalize the right rhetoric, then you too will end up as one of the shiny, happy people striding boldly across the pages of magazines with names like Fortune, Money, Fast Company and Wired. But nobody is going to read, let alone aspire to, magazines called Middled, Outsourced, Left Behind and Clobbered.