Small Business Labs

Americans Policy Priorities Highly Polarized

Pew Research's As Economic Concerns Recede, Environmental Protection Rises on the Public’s Policy Agenda covers a recent survey asking Americans about their policy priorities.

As their chart below (click to enlarge) shows, there is a wide partisan divide on the issues people think are most important.

The top 3 policy priorities for Democrats are the environment, healthcare costs, and education.

The top 3 for Republicans are terrorism, immigration, and the economy. 

The biggest policy priority differences are around the environment and climate change. Key quote from Pew on climate change:

Dealing with global climate change ranks at the bottom of the list of 18 policy priorities for Republicans and Republican-leaning independents (just 21% call it a top priority). By contrast, climate change is near the top of the list of issues among Democrats and Democratic leaners (78% call it a top priority).

One of the topics that interesting is global trade. Neither Republicans nor Democrats rate it as very important.

Because of this, it came in last out of 18 policy options with just 42% of the respondents rating it a priority.

The growing political polarization of America is a powerful social trend.  It's a major reason behind the growing urban/rural divide.

It's also a key reason our politics are so heated and our federal government is grid-locked. If you can't even agree on what's important, there's little chance you will agree on legislation.  

The Dramatic Growth of Internet Ad Spending

OK, it's well known that Internet advertising has been growing rapidly.  But even knowing that, the chart below (click to enlarge) is still stunning.  

The chart is from Adage's Marketing Fact Pack 2020 and shows that the internet's share of U.S. ad spending has increased from just 6.4% in 2006 to over 50% in 2020 and is forecast to reach 60% in 2022.

Print ads in newspapers are magazines, obviously, have taken the biggest hit share wise. But TV's share has also fallen about one-third over this period.

There's a lot of other interesting data in the Marketing Fact Pack 2020.  

For example, Accenture, PWC, Deloitte, and IBM are all on the list of the world's 10 biggest marketing agencies (they're 6th through 9th).  

A key reason these firms are doing so well is digital's share of U.S. agency revenue was almost 54% in 2018, up from about 33% in 2012.  This shift opened the door for non-traditional agencies to gain share. 

See the report for more fun ad-related facts and data. 

Report: Tech in 2020: Standing On The Shoulders Of Giants

Benedict Evans, who is a well-known VC and tech industry pundit, recently released Tech in 2020: Standing on the Shoulders of Giants. 

Similar in style to Mary Meeker's well known annual Internet Trends Report, Evans' report covers similar ground and is full of charts and data.  And like Meeker's report, it's long at 128 pages.

But it's well worth looking through as it has tons of interesting data on the tech industry.  

As the report chart below shows (click to enlarge), Evans suggests a number of technologies could be the next big thing in tech.

But he doesn't predict which, if any, will be.

Instead, he focuses on regulation and government policy likely being at least one of the next big things in tech. It's hard to disagree with this view.

Evans also has a free weekly newsletter that quite popular in the tech community. It too is well-worth reading.

Living as a Service and the Growth of Mobility

Landing recently raised $30 million to provide a "living as service" service.  The firm's founder describes this as:

" ...an all-inclusive long-term living experience that allows a new generation of renters the freedom to choose where and how they live."

Landing partners with property managers and apartment owners to offer apartments in 13 different cities in the U.S.  Renters join Landing by paying an annual fee of $199 a year.  This gives them the ability to pick up and move whenever they want.  If they're moving out the Landing network they need to provide a 30-day notice. 

But if they stay within the network, only a 3-day notice is required.

Landing apartments are fully furnished and completely turn-key.  This eliminates a lot of the hassles with moving to a new place. For example, there's no need to set up accounts with utility providers. 

The picture below, which is from Landing's website, shows the living room of one of their downtown Los Angeles apartments.   

The company currently has over 300 units across 13 cities in its network.  The new funding will be used for expansion and the firm hopes to be in over 30 cities by the end of 2020.

Landing is attempting to tap into the growing trend toward mobility and digital nomadism.  Key quote from the founder in Crunchbase's article on the company:

“We’re seeing a growing mobile workforce in need of more flexible living solutions that empower them to embrace opportunities as they arise–no matter where they’re located on the map,” he said. “Landing is the first company addressing this.”

The growth of mobility, distributed work and digital nomadism are trends we follow and are forecasting to get stronger.  We're looking forward to seeing how Landing progresses as it pursues this opportunity. 

JWT Intelligence's 100 Trends for 2020

Each of the past 6 years the trends group at the global advertising giant Wunderman Thompson has released an annual trends report covering 100 trends to follow in the coming year.

Yes, they really do have 100 trends. And the JWt Intelligence Future 100 Report: 2020 takes 226 pages to cover them. 

The focus is on consumers and the report covers trends across 10 sectors, spanning marketing, culture, luxury, beauty, travel and more. 

Our favorite trend comes from the beauty section and is called "Lashes".  The picture below nicely describes and illustrates this trend.

As industry analysts with a data bent, we're not the best people to decide what is and isn't beautiful. But we vote against this trend.

We've covered the annual JWT Intelligence trends report since it first came out in 2015.  Their reports are always interesting, fun to read have great pictures.

They also have a free newsletter that's well worth subscribing to. The signup button is at the bottom of this page.

Non-Profit Sector Big and Growing Faster Than Overall Employment

The Johns Hopkins Non-Profit Economic Data Project recently released its 2019 Non-Profit Employment Report. 

There are two key findings.  The first is the U.S non-profit sector is big, employing 12.3 million paid workers.  

As the study chart below shows, this makes the non-profit sector as big in terms of employment as the U.S. manufacturing sector.

The non-profit sector is also growing relatively rapidly. 

As the report chart below shows, from 2007 to 2016 (the most recently available data) employment in the non-profit sector grew nearly four times faster than the for-profit sector. 

We've long covered non-profits because the vast majority of them are small businesses. Over 80% of all non-profits spend less than $1 million per year in total expenditures.

And since there are about 1.5 million U.S. non-profits, a quick bit of math shows that the average non-profit has 8.2 employees.  

We've also long forecast that the non-profit sector would outgrow the for-profit sector of the economy. We continue to forecast this. The trends driving this growth include:

• The Internet and other technology makes is making it easier to start and operate a non-profit and especially small non-profits.
• Baby boomers, looking for encore careers and a way to give back, are starting growing numbers of non-profits.
• Millennials, who have a strong interest in social service, are starting non-profits.
• Non-profits and social service organizations are in many cases replacing governments as the key solvers of social problems.
• Revenue generating business models have become more common, which is leading to more self-sustaining non-profits. 

One issue may detract from the continued growth of non-profits is changes in tax laws. Key quote from the Johns Hopkins report:

"... the Federal Tax Cut and Jobs Act passed in December 2017 included several items that could have a negative effect on nonprofits’ ability to generate private donations. For example, by greatly expanding the standard deduction available to individuals, the tax bill will eliminate the tax incentives for giving for millions of taxpayers."

While we agree this is a risk, we believe donors will continue to provide enough support for this sector to continue to grow.

Quibi Bets Big on Mobile Movies

Quibi is a startup entertainment company that has raised $1.4 billion in venture funding to build a new content streaming service designed exclusively for mobile devices. 

Founded by Hollywood titan Jeffrey Katzenberg and led by CEO Meg Whitman, a Silicon Valley titan, the company has additional star power because of who they've signed up to provide content. 

According to TechCrunch:

"Quibi has attracted big-name talent to help kick off its first year, including Academy Award winners Steven Spielberg, Peter Farrelly and Guillermo del Toro; directors like Antoine Fuqua, Lena Waithe, Sam Raimi and Catherine Hardwicke; and stars like Stephan James, Chrissy Tiegen, Laurence Fishburne, Dave Franco, Bill Murray, Emily Mortimer and Kevin Hart, to name a few."

Quibi, which is short for “quick bites” is going to offer short-form videos of 4 to 10 minutes on everything from movies and TV shows in the form of short chapters to daily news and sports reports. 

These bite-sized pieces of content will have Hollywood quality production values, meaning they're expensive to make.  According to MarketWatch's article on Quibi:

"Lighthouses,” the service’s premium videos, will cost about $100,000-per-minute to produce, on par with some of the most expensive shows on TV.

The question, of course, is whether or not people want and will pay for high quality, short-form video entertainment on their phone (Quibi is planning on charging $4.99 to $7.99 per month for access to their content). 

Key quote from Fortune from Jeffrey Katzenberg on why Quibi will work:

“Everything they’re being offered today is centered around the TV. This is about your in-between time,” he told Fortune. “It’s quick bites, on the go and in between. It’s a very, very different viewing habit that we know our anticipated customers already have.… There is an unbelievable amount of content being consumed today on phones on the go. It’s just not of this quality.”

The shift to mobile computing devices is one of the most powerful technology trends of the past decade.

Whether Quibi is successful or not, it's an excellent example of the continuing impact this shift is having.

The Rise of Career Nomadism

Korn Ferry is a large, global organizational consulting and recruiting firm. Their research institute recently released their Top 10 Talent Trends for the New Year.  

All the trends are interesting. But the one that jumped out at us is the rise of career nomadism.

Key quote describing this group:

"... there’s an increasing amount of employees who actually want to make walking out the door a major part of their career. These “career nomads” are high-performing talented pros who have no qualms switching jobs, organizations and even careers. Millennials, people born between 1982 and 2000 and now the largest part of the US workforce, seem particularly disinterested in staying put."

Korn Ferry goes on to say that corporations are going to need to attract and keep these nomads happy or miss out on a key source of top talent.

We certainly agree. And we see this as one of the drivers of the growth of independent work (freelancing, independent consulting, etc.). 

Work is becoming more team and project-oriented, and the barriers separating traditional and independent work continue to erode. For an increasing number of workers, it’s not simply a matter of having a traditional payroll job or working independently. 

Instead, many are doing both, developing their professional lives by shifting back and forth between independent work and traditional employment. 

Often workers choose to go independent to explore new opportunities, learn new skills or gain flexibility. Later on, many rotate back to traditional jobs. 

The most extreme version of career nomads are digital nomads. And as with career nomads, millennials are particularly interested in spending some part of their careers as digital nomads. 

Talent mobility is a growing fact of corporate life, especially among highly skilled workers.  Hiring organizations need to accept and adapt to this new reality.

The Paradox of Increasing Business Travel; Skift's 2020 Travel Trends

Skift is one of our favorite publications. It covers the travel, dining, and wellness industries from a business perspective. Because of their remit, they report on a wide range of interesting trends.

The recently released their 10 Business Travel Trends for 2020. The 10 are:

1. The Power of Being There in Person
2. Designing Great User Experiences to Boost Adoption
3. Travelers Demand an End-to-End Experience
4. Winning the Price, Loyalty, and Experience Trifecta
5. Platforms Simplify the Ancillary Purchase Process
6. Expanding the Sharing Economy
7. Bleisure Travel is the New Black
8. Rethinking Corporate Travel Expenses
9. Business Travel Culture Drives Company Success
10. Taking Care of Business, the Traveler, and the Planet

While we like all of these trends, we find The Power of Being There in Person the most interesting. Key quote from the report on this trend:

Video and digital collaboration tools have transformed the modern workplace. Today,  employees can easily collaborate with co-workers around the world, offering a huge boost to productivity and what would seem to be growing opportunities to reduce travel costs. But in spite of the increasing potential of these digital collaboration tools to transform modern business, the importance of face-to-face meetings remains strong and critical to business success.

The chart below illustrates the fact that 9 out of 10 business executives surveyed agree with this.

We think this trend is similar to the paradox of place. This paradox is even though the Internet and connective technologies have made working remotely easier than ever, people and companies are increasingly clustering together in fewer, more valuable locations.

A related paradox is despite these same tools being able to substitute for business travel, business travel continues to grow. 

Our view is connective technology is, somewhat counter-intuitively, helping to drive the growth of business travel. It’s doing this in 3 ways.

1. Connective technologies have allowed business operations and workers to become more distributed. This means more travel as managers and employees travel to meet with those not co-located.
2. Connective technologies have also increased the number of people who work together regularly, but aren’t co-located. Thanks to the Internet and related tools, companies are more willing to create distributed teams and allow team members to live away from their teammates.  This leads to more travel and more people traveling because these distributed teams get together in-person.

3. Related to 2, connective technologies have led to more cross-organizational teams comprised of business partners, suppliers, customers and company employees. These teams are almost always distributed, which creates the travel need to get together.

We’re seeing signs that paradox of place is starting to shift, with work becoming more distributed. This likely means there will be more business travel in the near future.

We’ll have more on this topic in the new year.

The Rise of Esports

Quartz’s members-only article (meaning you have to be a paying subscriber to see it) The stars, teams, and investors turning esports into big business nicely covers the rise of esports.

Key quote:

“Tens of millions of viewers are tuning in to watch other people play video games competitively, and it’s becoming big business …  it is creating a new kind of sports star, and both the gaming industry and professional sports franchises have taken notice.”

As the Quartz chart below shows, esports' revenue is growing rapidly and expected to generate about $1.1 billion in revenue is 2019. 

According to the article, esports started in 1982 with a TV show Starcade, in which teenagers competed in arcade games. Alex Trabek of Jeopardy fame even hosted one of the episodes. 

Since then the industry has grown to the point where professional sports teams are getting involved. Again from the Quartz article:

“The Philadelphia 76ers have bought esports teams and are providing them access to training facilities —and they’re not the only ones. New England Patriots owner Robert Kraft owns a team, as does Los Angeles Rams owner Stan Kroenke.”

Esports is an excellent example of how technology is creating societal change – and new businesses and opportunities.

BTW, we find the Quartz premium membership service to be well worth its cost. We particularly like their weekly subject briefings, like this one on esports.