Booming Scrapbooking Industry

A while back I posted an article about the knitting craze, and how small business knitting and yarn shops had boomed as a result.



Well, here's a trend along a similar vein: the boom in scrapbooking.



Scrapbooking -- or "memory crafts" as the hobby is also called -- has exploded in the past decade. According to the Hobby and Craft Association, the trade association for the craft industry, scrapbooking is now a US$2.5 Billion industry that is showing no signs of slowing growth. There are now over 3,000 scrapbooking stores nationwide in the United States, serving 25 million scrapbookers.



Scrapbookers save family memories, including military memories of loved ones. The hobby is predominantly female, with older women constituting a large portion of the market.



Many scrapbooking shops are run by small businesses, including the small business profiled in this Wisconsin State Journal report and in this York Daily Record report.





As with most hobby and enthusiast businesses, scrapbooking stores tend to be run by people who are themselves scrapbookers. They understand the craft, tend to stock more items than general craft store chains, and can be more helpful when answering questions.

Entrepreneur's Best Friend: Social Networking Sites

Social networking sites are a hot trend and becoming ever more useful for entrepreneurs and small businesses, according to Xeni Jardin in an article at MSNBC.com:

"...there is growing evidence to support claims that some social networking services ... can be a powerful professional ally to businesses -- in particular, independent entrepreneurs and smaller companies, for whom each new personal connection is a significant business building block.



LinkedIn and ZeroDegrees are two of the more popular services that facilitate business-oriented connections...."

The article goes on to describe some of the uses that entrepreneurs have made of social networking sites: developing new sales prospects; researching companies you want to do business with; and job hunting and employee recruitment. Via Boing Boing.





I use two of the social networking sites for business purposes: Ryze.com and LinkedIn.com. I have made dozens if not hundreds of new connections through them. But you know my most valuable tool for developing business contacts online? It's this blog. It has opened the door to countless new connections, all over the world, with you, dear readers. My experience is right in line with the prediction of Scott Rafer, President and CEO of Feedster, who in the future sees social networking sites integrating with blogs.

Trucker Shortage Hurts Small Businesses

A piece in Crain's Cleveland Business (subscription required) suggests the U.S. has a shortage of truck drivers right now -- at least, long-haul truckers.



The article quotes Bob Costello, chief economist for the American Trucking Associations and says "the industry needs to hire about 34,000 new drivers each year due to industry growth, although that number is expected to rise in the future as truck freight is projected to increase more than 30% during the next 10 years."



The culprits: working conditions (being away from home); schooling requirements (it's expensive and there's no financial aid); and legal limitations (workers must be over 21 and have two years' experience, sending younger workers toward different career paths).



Small trucking companies are caught in the competition for drivers. The article highlights one small business, All Pro Freight Systems, that is focusing on job satisfaction, working conditions and pay in order to attract long-haul drivers.



This employment shortage could be a far reaching trend because of the dependence of the American economy on truck freight, and because so many small businesses are in the trucking business. According to the American Trucking Associations:

"Trucking is an important industry in America. The trucking industry is comprised of more than 500,000 for-hire, private and government fleets, including owner operators. It employs 9.7 million people, including 3.12 million drivers, and accounts for nearly 5% of the U.S. gross domestic product."

Information is King...and Other Trends

My co-editor, Dave, and I recently had the pleasure of hearing Watts Wacker speak (listen here). Watts Wacker is a futurist, author and lecturer.

We picked up on four major trends in Watts' talk, to share with you:

• What a Small World! Watts says we should all get used to the concept of a global culture -- not a U.S. culture, not a European culture, but a global one. Frenchmen go to a DisneyWorld for vacation and eat Big Macs. The world's culture knows no geographic borders anymore.





• Information is King. "The value of information about goods and services eclipses the value of the goods and services themselves," he says. Watts gave as an example certain collectible Campbell's Soup labels. The soup cans cost far less than the labels, which are being sold on eBay for more than 10 times the price of the soup.





• Paradox -- Get Used to the Word. As Watts pointed out, we will be seeing more paradoxes, where society moves in multiple different directions at the same time. For example, low carb diets are hot, at the same time cooking is hot. This is a reflection of the complexity of our world.





• Capitalism Rules and China Ascends.The last two decades have seen the rise of capitalism, affecting China greatly as that country's economic system transforms and morphs. China now has a US$1 Trillion economy and is poised to be a major economic power moving forward.

Interesting talk. Both Dave and I can see how these four trends play out in the small business market. We've already identified a number of them as major trends affecting the small business market, over at our sister site, TrendTracker.



Globalism is a dominant trend affecting small businesses. Information, and the rise of intellectual property as a key business asset and differentiator, is something that has increased the ability of small business to compete. Paradoxes are obvious, especially in the way big companies keep getting bigger, while small businesses proliferate. And finally, capitalism has opened up untold opportunities for small businesses to start up and expand worldwide, and has awakened the sleeping giant, China.

Global Trend Toward Freer Economies

Ever since the 1980's, following the legacy of Ronald Reagan and Margaret Thatcher, the global trend has been toward freer economies.



That is one of the conclusions of a fascinating report entitled "Economic Freedom of the World: 2004 Annual Report." The report is by James Gwartney and Robert Lawson, in conjunction with the Fraser Institute and the Cato Institute.



According to the report, the country with the most economic freedom is actually part of a nominally communist country -- Hong Kong. The other countries in the top ten are Singapore, followed by a four-way tie between New Zealand, Switzerland, United Kingdom and United States. Rounding out the top ten are Australia, Canada, Ireland and Luxembourg, in that order.



So what is it that makes economies freer? The report measures five criteria:

1. smaller government, including a lower tax burden to support that government;
2. a secure legal structure and protection of property rights, so that businesses can be assured of reaping the benefits of contract rights, patents and innovations;
3. access to sound money, including a reliable banking system and low inflation;
4. freedom to do business internationally, including low tariffs and taxes; and
5. less regulation of businesses.

These factors are important to businesses of all sizes. For small businesses they are crucial, because small businesses tend to have higher sensitivity to negative factors around them. A small business can be hamstrung or even wiped out much faster than a large business if any of these factors gets out of line.



It would be very interesting to see if there is a direct correlation between economic freedom and the current proliferation of small businesses and entrepreneurial enterprises. The report suggests that economic freedom provides greater opportunities for entrepreneurs (Chapter 2, pages 1-2), but does not actually measure or correlate the two with statistics.

PowerBlog Review: Nanobot

Editor's note: This is the twenty-third in our popular weekly series of PowerBlog Reviews of other weblogs...



Howard Lovy's Nanobot is the place we go to for "independent nanotechnology information and commentary."



As the title suggests, the weblog is about nanotechnology, a very hot field right now.



Nanotechnology describes science at the molecular level. Materials and substances are made better (stronger, thinner, lighter) through nanotechnology.



Nanotechnology is still a pretty mysterious subject to much of the general public. It has a sci fi air about it, although it is very real and very much part of the here and now.



Howard Lovy, the publisher of Nanobot, de-mystifies nanotechnology. At the same time, he revels in the "gee whiz" aspect of it. And he knows how to use the gee whiz factor to capture his readers' attention, along with some humor and wit thrown in for good measure.



For instance, a recent post entitled "A Night at the Micro Opera" reproduces a photo of an incredibly tiny model of the Sydney Opera House.

"Swinburne University of Technology's Centre for Micro-Photonics constructed a model of the Sydney Opera House. Its dimensions are 64 x 38 x 41 micrometers, (yes, I know; not nano, but cool, anyway). It was built from a hybrid material of glass and polymer. *** What does any of this do to advance the science of nanotechnology? Probably very little. But when it comes to attracting the interest of the general public, you know what they say about that picture/word ratio. The micro opera house was among Yahoo News' most e-mailed photos."

One of the best things about this blog, in my opinion, is the comprehensive list of nanotechnology links and resources down the left sidebar. Nanobot is a great example of how a blog can make itself even more valuable to readers through assembling a great links section focused on a particular subject.



The Power: The Power of Howard Lovy's Nanobot weblog is in the way it brings us up-to-the-minute insights into this developing field of nanotechnology, delivered with wit and a sense of humor -- and the comprehensive set of nanotechnology links.

Art in the Garden

Tracy DiSabato-Aust, author of The Well-Tended Perennial Garden and The Well-Designed Mixed Garden, made this interesting assertion at a garden design seminar that I attended today:

"Garden art ... we're not talking about the little wooden bent-over lady you see everywhere ... but true art... is a necessity in the garden today...."

That got me thinking about garden art as a trend. Art fits right in with the current broader trend toward treating gardens as outdoor rooms and decorating them. Most of the gardening books and magazines today feature garden art regularly in their photos. Even famous artists like Dale Chihuly are designing art specifically for the garden (see Red Reeds installation pictured below).

Few of us are going to spring for the six figures that a Chihuly installation costs. But modestly-priced pieces, such as metal sculptures or one-of-a-kind painted benches, are a different story.



Gardeners who are committed enough to want to decorate outdoor rooms with art, are likely to spend generously if it means a lightened spirit -- and "ooohs" and "aaahs" from visitors.



In my art gallery days I observed that the commercially successful artists tended to pay attention to changing tastes and trends. The garden art trend could open up new opportunities for artists with an entrepreneurial streak who pay attention.

Photo courtesy of www.chihuly.com. Be sure to visit the site and check out the slideshow for "Chihuly in the Garden" at the Atlanta Botanical Garden, a feast for the eyes.

 

Business Blogging Survey

Business blogging is one of the hottest trends in the blogsphere today.



Matthew Lin, a graduate student at New Brunswick University at St. John, Canada, is conducting an online survey about business blogs. It should be an interesting snapshot of this developing trend.



He asked me to spread the word. So head on over and take the survey.

It's an eBay World

eBay just issued another stunning set of quarterly financial results.



The company reported operating income (profits) of over a quarter of a billion dollars for just three months.  And that was twice as much as the same 3-month period a year ago.



The number of registered users is now up to 114 million. That's more than the entire populations of the United Kingdom, Ireland, Australia and New Zealand combined, according to the CIA World Factbook.





I can't overstate the impact eBay has had on small business. It has transformed entire marketplaces. Take, for instance, the marketplace for collectibles. It's now a US$1.4 Billion marketplace on eBay.



The site has fundamentally altered the supply and demand chain for collectibles. Why? Because now collectors are no longer limited by their geography. They can collect items that come from nearly anywhere on Earth. Likewise, the seller of the items is not limited by geography, either.



Millions of eBay sellers are small businesses, many of them home-based businesses. eBay has opened up markets and customers for them, in ways these merchants could never have accomplished on their own.

Boomers Retire Early

It seems more Baby Boomers are retiring early -- but not out of choice.



Yesterday's Wall Street Journal (requires subscription) had this interesting piece by Rebecca Blumenstein:

"Amid the layoffs that have become a routine part of corporate downsizing, mergers and outsourcing, there is a growing trend: older executives who can't find new jobs.



Few of these managers ever imagined this could happen to them at what was supposed to be the pinnacle of their careers. But after aggressive job hunts, many former executives discover that even though the economy is picking up, new managerial jobs tend to go to younger workers. Some have responded by starting their own businesses or trying consulting, but others have essentially been forced into early retirement, sometimes many years short of their financial goals."

This is part of the reason I think we will see more older entrepreneurs over the next decade (pointed out here). Not every laid-off executive is cut out to start a business, of course. But some percentage of these displaced knowledge workers and executives will become freelancers or start a business because they feel they have no other options.

Global Confidence Remains Positive

The outlook for the global economy remains positive according to a McKinsey survey released this month of 5,500 senior corporate leaders from around the world. However, participants were less exuberant in their enthusiasm than they had been in January.

 

The highest levels of confidence were to be found in India and China. Sixty-nine percent of their respondents expect conditions to be either substantially or moderately better in the next six months. These robust assessments were down a small amount from January. But the confidence of executives in emerging markets other than these two giants fell three times as much as that of executives in more established economies to a level of 56% positive.

 

Confidence in the near term is weakest among executives in the developed Asia-Pacific economies (Australia, Hong Kong, Japan, New Zealand, Singapore, South Korea, and Taiwan) reports McKinsey. There, 54% forecast better times ahead.

 

In the North American Market (Bermuda, Canada, and the United States the rate of positive response was 59%.

 

What do the survey results tell us about day to day expectations? Prices are likely to remain stable. Seventy-four percent of respondents indicated that they either did not  plan to increase prices or that price cuts were on the horizon. Hiring is likely to increase. Forty-three percent said their companies would start recruiting. Small business executives were by far the most confident about adding to their payrolls. 



TrendTracker Trend: Small Business Market Goes Global

Visit Carnival of the Capitalists

Here at Small Business Trends we participate in a weekly business event that travels from blog to blog, called Carnival of the Capitalists. Carnival of the Capitalists showcases business articles from a variety of excellent blogs. It's a great way for you, the reader, to discover new blogs.



This week's Carnival is at the RFID Weblog. Next week Carnival will be over at the Business Opportunities Weblog.



If you publish a blog and would like to participate, visit the Carnival home page.

Tom Ehrenfeld, The Startup Garden...final installment

In this, our third post, we wrap up Day #4 of the Business Blog Book Tour. Our guest today has been Tom Ehrenfeld, author of The Start-up Garden. Tom answers the final two trends questions we posed to him. 

 

(Remember to scroll down two posts to see the first entry in this series.)



Small Business Trends Question #5:  Will the Internet support entrepreneurs and help them be more successful? How?

Tom Ehrenfeld:  I'd like to think the Internet will support entrepreneurs and help them be more successful. What does the Internet do best? Form communities. Spread news. Make connections. Help educate folks with information they might not otherwise have access to.



In each of these categories I see some baby steps being made, but unfortunately, and this would take too long to go into, I fear that virtually every beneficial trend of the Internet in this regard carries negative consequences that are harmful or counterproductive.  Okay, let's consider a few areas.

• Information is now more widely available - but I am appalled at how many people - students for example - who believe that doing a Google search on a topic turns up an objective and comprehensive search for real data.
• Or communities - while it's nice to quickly form communities online, I think this is a very self-selecting and often solipsistic crowd. 
• Finally, one trend in the Internet particularly concerns me, and that is the increasing concentration of thoughts and ideas to a few leaders, none of whom particularly thrill me. Look at the blog world. While on the one hand I love it, the degree of blogrolling concerns me - it's this "small worlds" effect in which the leading players end up generating a disproportionately large amount of mutual links and buzz and attention, and the best ideas on the net become simply the ones with the most links....

Small Business Trends Question #6:  Will the Internet become a superhighway for the big established enterprises and make it harder for startups to merge successfully into the flow of commerce, or will it increase access for startups, or will it do both? Who wins and who loses, and how do they win or lose?

Tom Ehrenfeld:  You could certainly say that the Internet has made big companies smaller and small ones bigger.

I think that in some arenas the net amplifies the advantages of big companies (i.e., anything concerning legal battles or the need to fund investments or to leverage existing relationships.) Moreover, the big companies with bigger resources and the patience to sit out trends will often swoop in and capitalize (IBM may not always be first with new products but it certainly knows how to last).

On the other hand, the really smart and focused small players really can use the Internet to form lasting and valuable relationships with customers as long as they find ways to continue to deliver value, plain and simple.

=============

Thanks to Tom Ehrenfeld for sharing his insights from his book The Start-up Garden. The book is out of print, but you can purchase copies at 1-800-CEO-READ.

 

Also, we have added Tom's site, The Startup Garden, (a blog, no less!) to the blogroll on the left.



Thanks, as always, to Todd at A Penny For for putting all of the Business Blog Book Tours together.



Tomorrow, Tom moves on as the Book Tour continues at:

July 20th - Wantrepreneur

July 21st - Duct Tape Marketing

July 22nd - 800-CEO-READ

Tom Ehrenfeld, The Startup Garden...continued

We continue our Internet trends discussion with Tom Ehrenfeld, author of The Start-up Garden.



This is the second of 3 posts.



Small Business Trends Question #3:  Has the Internet fundamentally changed the process of starting up a business? If so, in what ways?   

Tom Ehrenfeld:  I just don't believe the Internet has fundamentally changed the process of starting up a business. Yet. And I believe that the fundamental process is unlikely to change radically as long as we operate under the same economic rules we do know.

 

To succeed, individuals will have to bring together the right mix of resources to capitalize on an opportunity they recognize as having enduring value, and they will have to grow or develop a fundamental skill set to do this in a way that is reflective, responsive, and always open to new learning and change.  

 

I think the biggest change, both actual and coming, has to do with business metabolism - the rate at which companies go through their basic activities. 

• The Internet makes it possible for people to find customers, form networks, communicate with key players, find information, process information, market to folks, and many other activities at a far greater speed. It does so while erasing barriers such as distance and formal (state or national) boundaries. And so companies that have all the elements aligned truly have the potential to grow much faster than before.  
• The downside of this accelerated metabolism: companies can also fold far faster than before. Two reasons: it is harder to maintain a competitive edge in the market as a result - and the big players have more flexibility to attack you as a result.

Small Business Trends Question #4: Will the Internet open up new markets for startups, and how?

Tom Ehrenfeld:  We've certainly seen many technology-based startups benefit from the Internet. As to the next generation of startups...let me simply cite an article I wrote for the Industry Standard several years back, and which continues to reflect my beliefs:  "Small is Beautiful."

Introducing Tom Ehrenfeld, Author of The Startup Garden

Welcome to Day 4 of the Business Blog Book Tour. Our guest today is Tom Ehrenfeld, author of The Start-up Garden.



In The Startup Garden, Tom speaks eloquently about how the Internet has changed things for entrepreneurs. He also speaks frequently about future changes he sees on the horizon.



Since here at Small Business Trends we focus on (what else?) trends, we decided to ask Tom to share more detail about Internet trends and their impact on entrepreneurs and startups.



We will be posting a series of questions in 3 separate posts asking Tom for his views about Internet trends.



We'd love to hear your views on Tom's trend insights. Please jump in and comment at any time!





Small Business Trends Question #1:  What are some specific examples of the positive legacy the Internet bubble left behind?

Tom Ehrenfeld: On a macro level I believe the Internet bubble created a sense of possibility among teens and college students entering the workforce that entrepreneurship was a viable and achievable career path. A significant number of smart and industrious individuals were exposed to successful people who capitalized on a passion and vision based on the promise of the technology.

Despite the prevailing wisdom that the bubble has turned people off, I truly believe that its positive legacy has been to show the promise (albeit the peril too) of creating your own gig.



Moreover, I see some individuals who hit the jackpot striving to use the Internet to help others launch meaningful companies. In particular, the work of such as Bo Peabody and Matt Harris, who hit it big with Tripod, have gone on to use some of their proceeds to launch Village Ventures, a vc fund enabled by the Internet, that seeks to invest in promising startups located outside of the geographic hotspots like Boston or San Francisco. 

Small Business Trends Question #2:   How will the Internet help budding entrepreneurs make the connection between their personal life and their business aspirations?

Tom Ehrenfeld: I guess in a fundamental way the Internet has not yet helped individuals tap into the connection between personal aspirations and their business, at least not in a meaningful way that I have witnessed.

I think that the more that individuals can realize how their unique skills and resources and opportunities (themselves or combined with their founding team) can come together in a tangible way that delivers value to customers, the greater their chance of success. I'm not talking about entrepreneurship as a selfish quest for identity - but the need to pour what you know and care about and are good at into a healthy venture.



I do believe the greatest use of the Internet to date is one of marketing. I see many clever individuals using the Internet to create lively blogs and websites that serve as terrific forms of finding prospective customers, sharing company data, and simply helping create opportunities for success. To the extent these sites share personal or differentiated material from the founder, they help "personalize" companies.

PowerBlog Review: Online Business Networks Blog

Editor's note: This is the twenty-second in our popular weekly series of PowerBlog Reviews of other weblogs...



Online Business Networks Blog is published by David Teten and Scott Allen. It seems to cover just about everything networking with an added emphasis on blogging.

Frequent, regular updating and a longevity are part of what makes a worthwhile blog. This  is a blog that is updated close to daily with some days containing multiple posts, and there are entries going back to March 2003.

Much good information and many worthwhile links are to be found in this blog. I haven't come across a better introduction or more useful ongoing primer on social networking for business. Anyone who wants to learn more about how to social network for dollars and pick up some great pointers on how blogging can make a business stronger should be a regular visitor to Online Business Networks Blog.

But don't be suprised when you come across entries such as the comparison of keyboards Teten posted recently. It is posts such as this that make this blog a real reflection of its editors.

This is a categorized blog and the success stories category is a nice touch. It's always great to hear about how someone else is doing well. The social networking humor category is worth a visit if you're in search of a chuckle. Be sure to check out Allen's definition of "Hooking up with fellow Trekkies" in his entry on nitworking.

The power of Online Business Networks Blog lies in its readablity and the useful information and tips on networking and blogging it delivers. It really is one of the places to go to stay on top of these subjects. And it is just plain fun to read.

Snapshot of China's Small Business Marketplace

Even communist countries are jumping on the small business bandwagon. 

 

China is implementing new programs to support its small businesses.  They include help for  starting a business, obtaining credit guarantees, and improving personnel training.

 

Consider these statistics about China's small and medium enterprises (SMEs): 

"Official statistics show that the number of SMEs registered in China had exceeded 3.6 million by the end of 2003. In addition, another 27.9 million individuals are running their own household businesses in the country. These two categories account for 99.6 percent of the country's total enterprises.



    Though SMEs contribute to 55.6 percent of the country's GDP (gross domestic product) and over 75 percent of urban job opportunities, they are still faced with restrictions and obstacles in many respects, said Wang Chunzheng. Due to these factors, SMEs are still in a weak position in terms of access to information, technology, human resources, finance and market, according to Wang."

Entertainment/Media Spending Rebounds

Spending will increase at a 6.3 percent compound annual growth rate in the global entertainment and media industry to $1.7 trillion in 2008, according to PricewaterhouseCoopers. The projection is included in the recently released PricewaterhouseCoopers report Global Entertainment and Media Outlook: 2004-2008.



US spending is expected to grow at 5.4% over the same period. This is the first time PricewaterhouseCoopers has projected global to outpace US spending over an extended period.



After three years of sluggish growth, 2003 global spending increased to 4.2% in 2003. In 2004, it is expected to increase by 5.7%.

 

New distribution channels such as broadband Internet access and wireless communications are significant drivers of the anticipated growth. Arriving digital technology in television and audio will also push growth. New technology and new distribution channels will create increased demand for content.

Real Estate Agents Hire Assistants

Here is an interesting trend:  real estate agents in the United States are hiring assistants.

 

These assistants -- often unlicensed -- handle paperwork, update web listings, attend home inspections, and do other routine tasks.  This allows licensed real estate agents to increase the number of listings they can handle at one time and close more sales...driving their income up. 

 

Twenty per cent of realtors are now using assistants, according to a National Association of Realtors survey. 

 

It seems that this trend is being driven by the increasing demands and sophistication of real estate sales.  There are more legal requirements, details and paperwork than ever before.  

 



I would like to invite reader comments about this trend:

 

Does this mean better service for consumers, or will service suffer because the realtor has too many listings and is too far removed from important details?  And what about the future of traditional brokerages?  Is their importance decreasing in the face of realtors who form their own "service circles" with their personal assistants?  Or will there be no impact?  And are we seeing the development of a class of "super-agents" like in my town, where it seems that a half dozen agents (usually the ones with personal assistants) have the majority of the listings, and the others have far fewer?  

Online Training Works for Retail

Training is a tough issue for smaller retailers. Good training programs are expensive to develop. Taking people off the floor to train them is hard to do. Space in which to conduct training is hard to find.



For larger retail enterprises, some of these problems are more easily overcome, but not all. That's part of the reason that retailing giants like Nike and Best Buy have integrated online learning with their traditional employee training practices. Nike points to a 2% increase in sales since it started using online training. Best Buy has developed special online learning segments for slow-moving products that it credits for helping increase sales by as much as 20%. With numbers like that look for online retail training to become a growing trend.



This data and more is included in a $349-report from Forrester, Retailers Adopt eLearning to Groom Smarter Store Associates.



Savvy retailers will pay attention to the cost savings the online training programs can deliver over traditional training. Well trained sales-floor personnel can dramatically improve revenues and customer satisfaction. Online training lets employees be trained at a computer in a backroom or from their homes. Online delivery of training can make it much easier to update an employee's knowledge base. For small retailers with more than one store, online is a fast way to deliver new product info and sales techniques to all employees at the same time.



TrendTracker Trend: Technology Levels the Playing Field

Blogging to Spot Trends & Forecast Markets

Our Case Study on using the blog format to spot trends and forecast market behavior is up, over at Global PR Blog Week. Check it out. This is Day 2 of the weeklong event, and you will find many fine articles by some of the best bloggers around.



Also, we will be available from 10:00 AM to 12:00 Noon (Eastern U.S. time) Tuesday, July 13, via instant messenger to answer questions. We can be reached at "Smallbiztrends" on AOL instant messenger, and "smallbiztrends" on Yahoo messenger during these times.

It's Not a Small "Big Business"

Jeff Cornwall of The Entrepreneurial Mind commented last week on Corporate executives starting their own businesses. His point was that Corporate types needed to understand that they were not starting smaller versions of the large corporations they used to work for. In a startup they must adjust their behavior and expectations drastically.



Today's Wall Street Journal has a special section on small business (requires subscription). A similar point to Jeff's was echoed several times over. In one article, Gail Blanke, a former Avon executive turned independent consultant, gave similar thoughts about leaving the convenient, predictable Corporate world to start a small business:

"A couple of hundred years ago, that's all anyone ever was, an entrepreneur, in one way or another, because there were no big corporations. I think we all have the stuff inside us to do it, but we get used to things being done in a certain way, like I did at Avon. I got used to having a lot of people working for me whom I could count on and trust. I got used to lots of departments I could access, like research and finance.



If you're considering becoming an entrepreneur, you have to ask yourself what your vision is, and make it so hot and so compelling that it can propel you forward no matter what. Once you have that powerful vision, you have to then ask, 'What am I willing to let go of?' If the vision is so wonderful in your mind, you can let go of that other stuff.



If you can't do that, then don't become an entrepreneur right now.... You have to let go of your old title, getting a paycheck every two weeks, your stock options. You have to let go of that in order to reach out and grasp a new one, and all the possibilities of how you're going to express yourself and what you're going to create."

This is an important point not only for would-be entrepreneurs, but also for anyone selling to small businesses. If you are selling to a small business owner, keep in mind that he or she may not be drawing a regular paycheck, probably wears many hats, and spends a fair amount of time doing routine tasks that would be delegated deep down in a large corporation. Just don't underestimate the skill level. You could be dealing with an ex-Executive Vice President of a Fortune 500 company who is a skilled negotiator -- and who just happens to do the billing, take out the trash, order supplies, and make the coffee.

PowerBlog Review: Antoine's Blog on Business and Technology

Editor's note: This is the twenty-first in our popular weekly series of PowerBlog Reviews of other weblogs...



Antoine's Blog on Business and Technology is published by Antonio Fumero of Madrid, Spain.



This blog is written mostly in Spanish, with the occasional article in English, as in this recent post. Most of the links, though, are to English language articles.



Now, my English-speaking readers, please don't stop here. Or you will miss out on some interesting writings.



And the fact is, you probably can read more of this blog than you think. With a little high-school Spanish, and the use of the Google translation tool, you will get the gist of most posts.



In fact, Antonio's blog is a good reason to try out the Google translation tool, or one of the other free tools out there like BabelFish. These translation tools are still rough and have quite a ways to go, but they are more useful than I expected. They don't have the exactness you need for translating, say, a scientific study or a contract, but for getting the gist of a blog post they work reasonably well.



According to his online resume, Antonio is an IT engineer, with experience in the banking industry. He also used to be a translator of technical documentation from English into Spanish.



As the blog title suggests, he writes about the business aspects of technology. He tends to write about telecommunications, collaborative technologies and connectivity, including social network software, blogs, and wikis.



What makes this blog worth visiting is the wide variety and quality of information posted. For instance, it was through Antonio's blog in a post roughly translated as "Complicated Alphabet Soup" that I first learned about the coming development of 802.11n and 802.11s wireless standards -- and found the links to other resources on the subject.



Spain has a thriving blogging culture, and I enjoy a peek into that world through

Antonio's blog.





The Power of Antoine's Blog on Business and Technology is in its coverage of new developments in connectivity and collaborative technologies -- and the fact that it bridges cultures between Spain and the U.S. making the globe a little smaller.

Join Us for Upcoming Events

We have two exciting events coming up that we know you won't want to miss!

• Tuesday, July 13: We will be participating in Global PR Blog Week. This is a weeklong online conference by some of the fine business, marketing and PR blogs from around the globe. Dave and I will be presenting a case study on how companies can use blogs to spot, analyze and track trends. We will be available from 10:00 AM to 12:00 Noon (Eastern U.S. time) on July 13th via instant messenger to answer questions. We can be reached at "Smallbiztrends" on AOL instant messenger, and "smallbiztrends" on Yahoo messenger during those times.





• Monday, July 19: Small Business Trends will host a stop on the popular Business Blog Book Tour. The subject of the Tour is the excellent book, The Startup Garden. We are thrilled to report that on July 19th we will be posting an interview with the author, Tom Ehrenfeld, about how the Internet has changed the nature of startups. Tom graciously has agreed to share his trend predictions for how the Internet will impact entrepreneurs and small businesses in the future. Don't miss this one -- you will want to drop by and leave your comments!

Please mark your calendars and join us. Everyone is welcome and we look forward to getting to know you through these events.

Open Source Software Threatens Innovation

The Small Business Survival Committee's most recent Cybercolumn suggests that the open source software movement threatens innovation and entrepreneurship:

"Open-source software certainly is a competitor for Microsoft. But is it a sustainable form of competition? Indeed, open source generates some obvious questions. For example, are entrepreneurs, businesses and other innovators going to do their best work when they aren't creating their own property? Is security and troubleshooting best performed in such an open, non-proprietary setting? Anyone with a minimal understanding of economics will see that the answer to both questions is no.



For good measure, open-source software creates potentially significant liability risks for businesses choosing to use it. How do those providing and using open-source applications know that someone's intellectual property wasn't stolen and inserted? They really don't. Such lawsuits already have been brought, and it's easy to envision them spreading significantly.



If programmers want to spend time creating free software, and businesses want to cash in on this work, so be it. That's their decisions to make. But it doesn't stop there. Many in the open-source crowd, as the Times noted, "propose rewriting intellectual property laws worldwide to limit their scope in duration." In fact, many just simply want to do away with intellectual property rights altogether."

Interesting column. Let me share a more practical, everyday issue I believe small businesses have with Linux and other open-source software. Open source applications are still, for the most part, not user-friendly, either to install initially or conduct business with. Instead of technology working for the business, the business ends up working on the technology. Tech businesses and tech early adopters don't seem to mind this. They have the expertise and the interest to fiddle with open source applications and deal with the idiosyncracies, lack of integration, lack of support, etc. But a small business that is not in the tech industry -- say, a retail establishment or a small manufacturing business -- just wants software that does the job with the least amount of hassle.

Seasoned Executives Become Entrepreneurs

Ray Kroc started McDonald's at age 52 after years as a salesman. Colonel Harland Sanders franchised Kentucky Fried Chicken (now KFC) at age 65.



"You're never too old" is the message in an Akron Beacon Journal article by business reporter Brian Charlton. The article points out that more and more seasoned executives are starting their own businesses.



The traditional thinking is that entrepreneurship is the domain of the young. Yet, the rate of entrepreneurship is greater among older individuals than you might guess.



According to the American Association of Retired Persons (AARP), 40% of U.S. entrepeneurs are over 50. The 50 years-and-up age group actually has a higher percentage of self-employed workers than the population at large. Of workers 50 years and older, about 16.4% are self-employed, whereas only 10.2% of the workforce as a whole is self-employed. (See AARP report here.)



Expect this trend toward older entrepreneurs to continue, especially in the United States. Think most people nearing reitrement age are dreaming just about golf, travel and hobbies? Think again. The AARP report says that instead of settling into a quiet retirement, 80% of the Baby Boomer generation -- born from 1946 to 1964 -- plan to work after retirement.





This trend is especially prevalent among white collar workers. I anticipate that a notable portion of Baby Boomers who leave the Corporate world will join the ranks of entrepreneurs and small business owners over the coming decade. Why? As I pointed out recently in an earlier post, they will have the experience, business knowledge, confidence, and financial reserves to call their own shots.



That's what three of the entrepreneurs profiled in the Beacon Journal article did. I know, because they happen to be colleagues and friends. Ron Finklestein, who probably has had about a million dollars worth of training from Fortune 500 companies, now has his own business coaching other small business owners. Steve Rucinski, another seasoned executive with a blue chip background, and who also happens to be the brains behind the Small Business CEO blog, has started his own consulting business. And last but not least, is Dennis Adamkiewicz, a highly experienced engineering executive who now puts his expertise to work helping small businesses obtain SBIR grants, as this talk demonstrates.



Their stories are not unusual.

BrandEquity Survey 2004

What do Wal-Mart, Visa, Nokia, and Google have in common, and why does Reynolds Wrap outdo them all?



The first three were all the top ranking brands in their respective categories according to the 2004 Harris Interactive EquiTrend Brand Study. But Reynolds Wrap Aluminum foil was the top-ranking brand of all 1,031 brands surveyed.



Wal-Mart toped the list of retail brands with Home Depot, Target, and Barns & Noble close behind. Visa led the way in financial services and insurance brands with MasterCard, American Express Travelers Cheques, and Blue Cross/Blue Shield following. Nokia took the prize for telecommunications brands followed by Motorola, LG, and Verizon. Google was the winner in online brands with Yahoo, Mocrosoft.com, and HistoryChannel.com chasing.



For overall top brand, Reynolds Wrap was followed by Hershey's Milk Chocolate Candy Bars, Ziploc Food Bags, and Heinz Ketchup.



No pure online brand made it into the top ten overall brands. But Barnes & Noble and Best Buy, which came in at numbers four and five respectively out of 97 in the retail brands category, also placed among the top ten online brands.



EquiTrend has been comparing brands across product categories since 1989. This year it measured familiarity, quality, purchase intent, brand expectations, and distinctiveness to determine the most valuable brands in the U.S. The survey was conducted with 24,046 consumers aged 15 and over between April 23 and May 24, 2004.



With Barnes & Noble and Best Buy scoring in both the retail and online brands categories, can other companies be far behind? We think not. Look for more crossover between major retailers and online success in the near-term future.

Learn To Be Digital from the Digitally Fluent

People under age 30 are better at absorbing information and making decisions quickly than any previous generation says Marc Prensky in the article Capturing the Value of Generation Tech Employees. He goes on to identify these young people as digital natives because they are the first generation to have grown up in a digital environment.



Richard Saul Wurman estimates in his book Information Anxiety 2 that today's college grads have spent 10,000 hours playing video games and countless hours surfing the Web and using Instant Messenger, chat rooms, and email.



Prensky refers to the rest of us as digital immigrants -- an older generation that has migrated into the digital world. According to Prensky, we immigrants will never be as fluent in the new technology as the natives. When it comes to business, he suggests that older executives, even those who have been relatively successful digital immigrants, need to be mentored by the younger digital natives.



Prensky is right. There is no greater business trend than the digitizing of just about everything in the twenty-first century. Jack Welch when he was still at the helm of GE had his top 1,000 managers enter a mentoring relationship with young GE employees.



But those managers were the mentored, not the mentors. They were looking to the youngest among GE's multitudes for the understanding needed to lead enterprises. There isn't an organization in the small business marketplace that wouldn't do well to take a page from Welch's book.

To Go Wireless Or Not

A recent In-Stat/MDR survey on wireless phone use found that most American consumers are not ready to go completely wireless with their phone service. The reason: they want lower cost wireless service and better coverage first.



Many one-person and micro businesses are facing the same decision. We suspect those who refuse to cut the wire are doing so for the same reasons. Yet wireless phone companies continue to try to sell bells and whistles such as picture phones, games, ringer tones, broadband access, etc. rather than find ways to better deliver their core product by dropping costs and dramatically improving coverage.



It's tough to commit to wireless when you can't receive calls in your home office because you live in a dead spot. Wireless is great if you are in a major metropolitan area or driving down an Interstate. But for small business people who live in exurbia, or even a rural village, it remains a no-go.



The time is ripe for a company to combine really low-cost wireless and landline phone service -- especially for small businesses. When will wireless phone companies start selling what their customers ask for rather than easy-to-offer add-ons of questionable value? When the market demands it, and that won't be until one of them breaks ranks. The first to offer total coverage or find a low-cost way to merge wireless and traditional phone service will start a trend.

Micro-Businesses on the Rise

David St. Lawrence at Ripples writes about the growing importance of micro-businesses. He has an entire series of posts on micro-businesses that you really should check out.



Micro-businesses are a segment of the small business market. St. Lawrence defines them as businesses that do less than US$1 Million in sales per year. Many of them are home-based businesses.



According to St. Lawrence, more people are starting micro-businesses for the excitement and challenge. They want to be their own bosses and are seeking refuge from the frustrations of the Corporate world.



He says the numbers of micro-businesses will continue to grow:

"...I believe that micro-businesses will continue to grow in number and importance because being self-employed allows people to balance work and family in a way that is usually impossible as a salaried employee with a full-time job.

I agree with David's comment, and I also think there are a number of interrelated factors driving the growth in very small businesses. One such factor in the United States is demographics: the aging Baby Boom population. A significant portion of the population now has the experience, business knowledge, confidence, and financial reserves to opt out of the Corporate world and start their own businesses.

Small Towns, Small Biz

The Kiplinger Letter, in its latest edition (subscription required), reports that small towns in the United States are attracting more college graduates.



Kiplinger says that is "good news for small-business employers in those areas. Young adults are shunning metropolitan areas for quieter towns and cities that offer cheaper housing, easier commutes, good pay and less crime."



Just what are some of these small towns with a pool of young talent? Try: Abilene, Texas; Port Charlotte, Florida; Hot Springs, Arkansas; Greeley, Colorado; Provo, Utah; Augusta, Georgia; Mesa, Arizona; Everett, Washington; and Lynn, Massachusetts.





This is also good news for the economic development efforts of smaller towns. Many small U.S. towns have experienced an outflow of young people -- a brain drain that can plunge a small town into a long slow decline. We all know at least one such place, where most of the young people simply started moving away. Keeping new graduates in a town or being able to lure graduates there is crucial to a small town's economic vitality.

Women Get Less VC Money

Colleague and friend Kirsten Osolind over at re:invention (company) (blog) teamed up with Growthink Research to release a pioneering report, Venture Funding for Women Entrepreneurs.



The report analyzed 1,860 companies that raised over $19 billion of venture capital in 2003 in the United States.



In some ways the report is depressingly predictable. For one thing, the report demonstrates the stark disparity between men and women entrepreneurs when raising venture funding. Key findings:

• Women headed a mere 4.5% of all funded firms and received 4.2% of the capital. This amounts to just 84 women-led companies in the U.S., raising $783.8 million.





• Of those women receiving funding, the largest concentration (44%) was in health care.





• The next highest concentration (30%) was in business software and services, followed by 14% in the connectivity sector.





• Only 217 investors provided venture capital to women-led companies. (It comes to more than the total of 84 firms because investors partner up on investments.)





• Women are not well represented in other key roles in VC-funded firms. Over 1,150 VC funded companies headed by male CEOs did not employ any women executives.
  
  

On the other hand, there was an encouraging note. The report shows that women support other women. More than 45% of the women-led firms employed other women in management roles.



Also, this report is unique in that it captures data not just on women CEOs, but also on other executive women, by type of position. It has some of the most comprehensive, up-to-date data on the role of women in venture backed startups.



The report can be downloaded from Growthink Research.





If you are a woman entrepreneur who has successfully raised venture funding, you are a very rare breed, indeed. When I raised funding and equity partners for a startup several years ago, I didn't realize how rare it was. I never stopped to think about gender, and I am glad I didn't. If I had, I might have been too intimidated by the statistics to try.