Top Ten Trends for Software Vendors

Here is another list of top ten trends predictions for 2005, this one for software vendors:

1. Voice over internet protocol (VOIP) goes mainstream

2. China's power and world economic influence grows

3. Working at home goes mainstream while small business thrives

4. Offshoring activity picks up

5. As the world shrinks, the world market expands

6. Technology stocks increase in value

7. Cell phones look more and more like PDAs and vice versa

8. Blogging and social networking become accepted business tools

9. Continued sophistication in corporate internet usage

10. Enterprises increasingly demand flexible solutions

Several of the trends on this list are related to the small business market. In fact, we have been discussing them here for the last 18 months at Small Business Trends and at TrendTracker, our sister site.

The list comes from an article at Sandhill.com, via Neville Hobson's commentary. Be sure to click through and read both links -- lots of interesting market intelligence there.

Independent Coffeehouses Understand Their Market

Yesterday I ran into Valdis Krebs. Valdis is a well-known figure in the world of social networking analysis.

Seeing him reminded me to write about an intriguing trend. Look at this photograph to the left and tell me what you see that is strange.

If you see that everyone in it is looking at some kind of digital device, you're correct.

In today's environment, savvy coffeehouse owners are offering wireless Internet service to accommodate technophile customers like these, who wouldn't be caught dead without their digital appendages (OK, maybe that's a bit of an overstatement, but you get my drift).

And most of these technophiles insist that wireless access be free.

The photo was taken by Valdis on a recent tour of coffeehouses in Cleveland that offer free wireless Internet (wi-fi) service.

Valdis and intrepid bloggers/wi-fi enthusiasts/coffee-lovers George Nemeth and Steve Goldberg spearheaded the tour, which was last week. It turned into an all-day event. Our intrepid bloggers were met along the way by other local bloggers who stopped and joined in for a cup. The whole event was blogged and podcasted and captured in digital photos posted to Flickr. And captured in print by journalist Chris Seper (himself a blogger although on hiatus), in a Plain Dealer piece:

"They strapped on their notebook PCs, iPods, digital cameras and mobile phones (complete with wireless earpieces) and blazed through a dozen cafes on the coffeehouse circuit...."

Valdis pointed out to me that with the exception of Panera, all the coffeehouses that offer free wi-fi are independents...local small businesses. Most of the chains charge for wireless Internet access. In this it seems that the local independent coffeehouses understand what their customers want, better than the chains.

Toward the Empathy Economy

An article by Bruce Nussbaum in BusinessWeek suggests that the thing that will set American businesses apart in the future is their ability to provide great customer experiences. To deliver great customer experiences, businesses will need to hire people with right-brain skills involving creativity and design.

"Quality-management programs can't give you the kind of empathetic connection to consumers that increasingly is the key to opening up new business opportunities. All the B-school-educated managers you hire won't automatically get you the outside-the-box thinking you need to build new brands -- or create new experiences for old brands. The truth is we're moving from a knowledge economy that was dominated by technology into an experience economy controlled by consumers and the corporations who empathize with them."

He sees developing countries like India and China focusing more on cost-cutting and quality control efforts such as Six Sigma, "leaving U.S. corporations to build new business models around customer culture." Jobs in the United States, he predicts, will focus on right brain skills such as creativity and empathetic design, whereas jobs requiring inside the box thinking such as engineers will increasingly move offshore.

There's not anything new about the concept of the "experience economy," which has been around for several years. What is interesting, though, is the design connection. The writer suggests that artistry and design professionals will be in greater demand, and that design thinking is making its way up to the executive suite.

Hat tip Terry Storch for the link.

PowerBlog Review: George's Employment Blog

Editor's note: Welcome to the fifty-eighth in our weekly PowerBlog Reviews of business weblogs.


George's Employment Blog covers employment law and human resources. The blog is written by George Lenard, an attorney from St. Louis, Missouri, and Michael Harris, a Human Resources professor and consultant, also from St. Louis.

Michael has written an account of how the two met over coffee, got to know one another and then started to blog together. It's also a good article about the benefits of blogging.

This blog manages to stay focused on a niche, yet covers a wide range of employment-related issues that appeal to both lawyers and non-lawyers alike. George is experienced in writing for non-lawyers, as he also writes a column for the Hiring Center on Monster.com.

I love the way this blog lets the personalities of the writers shine through. The tone is conversational. It often has humor interspersed.

The blog is not above the occasional civilized rant, either, as in this post where George takes on a very legal institution -- class action lawsuits -- and undresses them down to their skivvies:

"OK, this blawg is my place to speak my piece (and Michael his), so once in a while I can rant a bit about things I hate.

I'm not opposed to the very idea of class actions, and will even concede they theoretically can serve a socially useful function.

But how they work in practice stinks for a number of reasons. One of which we'll cover today." (You'll need to read the blog to understand what George hates about class action lawsuits.)

George says that he uses blogs for professional networking, for marketing, and for personal satisfaction. You get the sense that this blog is very much a creative outlet. Attorneys frequently are described as not being creative. I'm always puzzled when I hear that because some of the most creative people I know are attorneys.

Not only that, but I believe that the law blogs or "blawgs" are some of the most interesting blogs out there. They tend to be stimulating, broad-ranging and entertaining. So I asked George to explain this great mystery of life: why do so many lawyers blog, as compared with, say, accountants or doctors? Here is what George had to say:

"Come on Anita, isn't it obvious? We are just so much smarter and more interesting. Seriously, many of us like to write and enjoy the freedom of writing whatever we want instead of what has to be written for our clients. Also, I wonder if many of us aren't more concerned with the need to develop independent professional identities. I suspect most of the blogging lawyers do not work for large firms, but are in situations where they are very conscious of the need to market themselves."

In this comment George points out a nugget that I believe to be true: the biggest benefit from publishing a blog comes to small businesses and firms. Smaller firms have the most to gain from the marketing boost that blogs can bring. And they are usually unencumbered by bureaucracy and restrictions. They are freer to pursue their vision of what the blog can become.

When he is not blogging from his office, George blogs from a laptop on his kitchen table or a wireless-enabled coffeeshop.

The Power: The Power of George's Employment Blog is its superb treatment of a niche subject -- employment law and HR -- and its creativity.

More Demand for Investor Relations Consultants

The passage of the Sarbanes-Oxley Act turned the world of publicly-traded companies in the United States upside down. A lot has been written about the increased compliance and reporting costs that smaller businesses now face.

There's another aspect to Sarbanes-Oxley. Small-cap publicly-traded companies in the United States are having a harder time getting analyst coverage. They are turning to skilled investor relations (IR) consultants to raise their visibility -- without running afoul of the law.

A Knowledge@Wharton article (requires free registration) documents the work of two professors who have studied investor relations activities. Small- and mid-capitalization companies typically traded on the NASDAQ and OTC markets are now hiring investor relations consultants out of necessity, in order to get the visibility with analysts that they once had:

"Analysts at Wall Street brokerage firms who once tracked small companies in hopes of attracting investment banking business cannot do that anymore for fear of raising conflict of interest questions. Companies in turn cannot favor selected analysts in releasing corporate information. The end result is that smaller companies are having a harder time gaining analysts' attention.

All this has heightened the importance of IR professionals to companies that are seeking to be heard by investors over the crowd of other such companies also clamoring to be heard."

The Knowledge@Wharton article is worth reading. While I haven't seen the underlying academic study, the article seems to suggest that demand for Investor Relations consulting is growing because of the needs of publicly-traded small-cap companies in the current regulatory environment.

Reinventing A Business

I recommend you visit Rosa Say's Talking Story blog and read the roundup of guest posts she is running this week on "reinventing your business."

I have a short post up about using RSS for marketing. My philosophy is that reinvention starts with something small and manageable, but which can reap big results.

The list of guest business bloggers posting at Talking Story this month includes Lisa Haneberg of Management Craft, Yvonne DiVita of Lip-Sticking, Christopher Bailey of The Alchemy of Soulful Work, K. Todd Storch of Business Thoughts, and Wayne Hurlbert of Blog Business World.

Rosa has done an admirable job developing a true community around her blog. This roundup of guest posts is part of her community, called Ho'oahana. (Ho'ohana is a Hawaiian word meaning to work with intent and with purpose.) So head on over and join in the conversation.

Buying Sight Unseen a Growing Trend

A New York Enterprise Report story profiles an Ecuadorian immigrant who came to the United States 30 years ago. He sold encyclopedias door-to-door at first, opened a furniture store six years later, and today is a multi-millionaire and CEO of 1-800-MATTRESS.

What a great illustration of the American Dream!

Just as interesting in a different way, is a little gem buried in the article about selling on the Internet. The founder's son talks about how people are getting used to buying things over the Internet that you might never expect could be sold sight unseen, such as mattresses:

"...the Internet has benefited the entire industry, and retailing as a whole. It's just created an entirely new revenue stream and it's going to continue to grow.

We've found the transition into cyberspace pretty easy, because we've been doing a lot of remote selling, without any brick and mortar, for over 20 years. And I think that customers in general are getting used to buying things sight unseen. And we are working on improving the experience, the feel and texture of the product, through the use of images to help them even more."

It's another chapter in the continuing saga of the growth of online sales. For instance, VeriSign reports that online commerce jumped an astounding 88% just during the 2004 holiday season over the prior year.

Not only are online sales growing overall, but as the quote from the New York Enterprise Report indicates, they are growing in categories you might not have imagined could be sold successfully online.

Small businesses can find untapped opportunity in this trend of willingness to buy more high-touch stuff online.

Online commerce keeps getting easier and within reach of small businesses. The cost of technology keeps coming down. The functionality keeps improving. And the technology gets easier and easier to use.

It costs less to set up an online store than a brick-and-mortar store, if you have reliable suppliers who are willing to do fulfillment directly to the end user. You also need to understand how to sell online (much different than in-person selling). And you need to understand technology.

But for those with the right business model and the right skill sets, they will find that consumers are increasingly willing to buy items sight unseen over the Internet -- even items traditionally thought of as needing to be touched and seen.

14 Ways to a Successful Company

Two years ago Ron Finklestein, a former corporate executive who transformed himself into a successful business coach, started an annual conference in Akron, Ohio, USA called "Celebrating Success!" I was fortunate enough to work with Ron on that first annual conference as one of the founding Board members, until time commitments forced me to limit my Board memberships.

The premise of the Conference was simple: celebrate the successes of local small businesses.

Small businesses got the chance to tell their stories about what has made them successful, before an audience of local business and community leaders. We also secured a media partner to ensure that each entrant had a chance for press coverage, including in-depth interviews of the five finalists.

Usually it is large corporations that win awards and get all the accolades. Yet smaller enterprises form the backbone of the U.S. economy. This Conference was designed to be open even to the smallest, single-person businesses.

We thought: what better way to support small businesses than to give them a venue to highlight their great accomplishments?

Pulling off the Conference was a huge amount of work, but the results exceeded our expectations that first year. It has now become an annual Conference, I am happy to report.

Then an interesting thing happened. Ron realized that the factors in the success of each business participating in the first Celebrating Success Conference could be distilled down into 14 factors. He collected them all, along with each company's story of its own success, into a book called "Celebrating Success! Fourteen Ways to a Successful Company."

Steve Rucinski and I had the chance to interview Ron last week about the 14 lessons over at SMB TrendWire. So head on over and listen to what Ron has to say in the audio interview. You can listen online or download it as a podcast to your iPod or other MP3 player.

Technorati tags: small business; podcast.

PowerBlog Review: Decent Marketing

Editor's note: it's time again for our weekly PowerBlog Reviews of business weblogs. This is the fifty-seventh in the series.


Decent Marketing. The name carries with it all sorts of connotations. Not bad. Respectable and worthy. Kind.

Katherine Stone writes the Decent Marketing blog. And she wants us to take the name in different ways. She's making a statement with the name. She's demonstrating what's good in marketing by commenting on the bad, or as she says, "stuff I see that is simply silly, wasteful or lacking in strategy, and stuff I see that is clearly about making money regardless of its impact on people."

Katherine has a background in experiential marketing. She says experiential marketing is about creating fresh connections between brands and consumers out in the world (i.e., memorable experiences with products or services). So she tends to write about experiences and how companies create them.

This is not just another marketing blog. There are so many of those now, that it is getting harder to distinguish between them. But Decent Marketing stands out, for two reasons. First, the topic -- experiential marketing -- is sufficiently narrow to go deep into the subject matter, but broad enough to be interesting. Second, the way Katherine executes and delivers the blog is fresh and genuine (an overworked word, to be sure, but one that truly fits here).

Katherine told me in an email that she created the blog more for herself than for her business, Engage Consulting. It seems that she simply wants to express herself. She doesn't write about the hot blog topic of the moment or try to ride the coattails of sensationalism; rather, she talks about what interests and engages her.

I've come to really really enjoy this blog after reading it off and on the last several weeks. I don't know -- maybe it's her distinct "voice" that comes through so clearly. Or maybe it's the picture of Katherine as a little girl that she has on her blog. It was so memorable, open, accepting and precocious, all at the same time.

I asked Katherine if there were an interesting anecdote she cared to share about her blog. She pointed me to this remarkable exchange -- I don't think I've ever seen anything quite like it on a blog. Katherine wrote a post about Dairy Queen. Well, let me allow Katherine to tell the story in her own words:

"I was writing about a store redesign they plan on doing and why I didn't really like the concept. I ended up getting quite an emotional and detailed comment on the post from a gentleman who thought I must have some sway with Dairy Queen and who obviously had no other place to vent - he was angry because his local Dairy Queen failed to honor some coupon or special deal he wanted. THEN, the owner of that actual Dairy Queen outlet answered that comment with another comment about the incident trying to defend their decision to ask for full price. I was completely amazed."

Let me add one more thing about Katherine and her approach to blogging. Despite having a Corporate background herself (she was Director of Experiential Marketing at the Coca-Cola Company), she foresees it being very difficult for large corporations to blog, and it is refreshing to hear her say it. As she points out, corporations fear offending their constituencies, and that will make Corporate blogs bland. Smaller companies for whom it is OK to not be all things to all people stand a better chance of having successful blogs. Hear hear.

Katherine blogs from Atlanta, Georgia, USA.

The Power: The Power of Decent Marketing is the remarkably fresh and distinct voice it manages to convey, and its choice of a subject matter that stands apart from other marketing blogs. Decent Marketing makes you feel richer and better for having read it.

The Author as Entrepreneur

Virginia Postrel points to an article in the Washington Post about what it takes to be an author today (hint: entrepreneurial skills help):

"A new book is printed in the United States just about every 20 seconds, according to a company called R.R. Bowker, which compiles the Books in Print database. With profits in the publishing world pretty flat in recent years, big publicity budgets are largely limited to the heavyweights in the writing world, the proven novelists (such as Stephen King) or famous memoirist (such as Bill Clinton). Everyone else gets about $5,000 to $10,000 to promote their title, if they're lucky. Many get nothing at all.

"Publishers can't afford to support every title they release, and unless you're an author they've invested a lot in, you're on your own," says Jim Milliot, executive editor of Publishers Weekly. "Nearly everyone who publishes a book quickly realizes that if they want to publicize their work, they better take matters into their own hands."

Book publishing is changing before our very eyes. Because so many publishers do little to promote books, and because of advances in print-on-demand services, more authors are choosing to self-publish.

They are also using blogs to promote their books online -- it's a significant trend we spotted over a year ago.

David St. Lawrence is doing both with his new book, "Danger Quicksand -- Have a Nice Day." His book is about the changing nature of corporate employment and how to protect yourself (including a chapter on starting your own business).

He has chosen to self-publish his book. He's even run a 12-part series about his self-publishing experience -- must reading for anyone who wants to publish a book.

I'm proud to be part of these new and evolving trends by helping David promote his new book here at Small Business Trends.

When Employees Work Out of YOUR Home

One in four U.S. small businesses with employees works out of the business owner's home.

This information comes from a 2004 poll by the National Federation of Independent Businesses.

Note that we're talking here about small businesses with employees, not single-person small businesses. That's the surprising part.

Virtually all of the businesses operating out of the owner's home are very small -- fewer than 10 employees. For years I've heard about small business owners who have employees working out of their homes. Still, I wouldn't have guessed the number doing it was so high.

The implications of this trend are far-reaching. Just consider:

• Zoning regulations are going to be stretched -- and possibly challenged -- to the limit. In many parts of the U.S., strong zoning regulations limit the ability to conduct a business out of home. While these regulations are often ignored or winked at, it's one thing for the business owner to work out of his or her own home. It's quite another to have employees showing up for work there each day. And in many communities, the members of zoning boards who are asked to grant variances from the rules may be the business owner's neighbors -- the very people most likely to object to employees showing up for work across the street everyday.



• Home builders, architects, interior designers and realtors may be pressed to meet new expectations by homeowners: living space that can double as places of employment. Needs such as separate entrances, working space that can be closed off from living space, and extra storage for business supplies, are probable outgrowths of this trend.



• Computer networking firms and other business services have to contend with combined living/work spaces that have more complex needs than, say, the single-room home office.



• Anyone selling to small business has to contend with that growing challenge: how do you find these small businesses, if you want to make sales calls on them? You won't find them in the typical office complex, industrial park or stand-alone place of business.

Of course, this trend is a boon for coffeeshops and restaurants such as Panera and Bob Evans that are known for being friendly meeting places. When you work out of home and have employees there, space is likely to be at a premium. Where else can you have a meeting?

Execution of Strategy

I'm off to Chicago on business for the day. Until I return, check out my second guest post over at Business Pundit. It's about executing a business strategy, citing an interesting survey of 1000 Board of Directors members.

Training as the Key to Execution

Today I am guest posting over at Business Pundit, while Rob and Mrs. Business Pundit are in San Francisco.

So head on over and check out my thoughts about "Execution by Training."

In Canada, Small Business Rules

The domination of the world by small business continues....

Canada recently updated its website of business stats. No surprises, either. Just like in most parts of the world, small businesses make up the vast majority of businesses in Canada.

Out of 2.3 million businesses in Canada, over half are very small -- they have no employees. Of the ones with employees, 97.7% have fewer than 100 employees.

Here's an interesting chart showing the breakdown of Canadian businesses by size ("indeterminate" means the business has no employees):

Note how many businesses produce services rather than goods -- 75%. If you caught my February piece discussing service-producing versus goods-producing jobs in the U.S. (Welcome to the "Service Nation"), then you won't be surprised by Canada's experience either.

The migration towards service-producing economies is a pervasive trend in most developed parts of the world. Developing countries produce goods. Developed countries produce services.

Chinese Competition's Impact on the U.S.

Editor's note: we are happy to bring you another article by expert guest blogger, John Wyckoff. This month he examines China and what it means for U.S. small business sectors.

By John Wyckoff

Recent articles such as this one and this one examine a dynamic that will affect just about every small and large business in America.

One article talks about the decimation of the U.S. furniture industry. The other examines a similar effect in the textile industry. Both industries in the United States are being severely impacted by China.

Furniture making in the U.S. has been a very stable industry. Most wooden furniture has been made in the Carolinas, until now. Enter Chinese-made wooden furniture. They have the quality and technology. Today, many of the well-known furniture brands import components or completed furniture from China. They repackage it and sell it to their dealers.

The Southeastern part of the U.S. was also known for its textiles. Now that the quotas have been removed from Chinese textiles you can expect to see the vast majority of clothing sold in this country to be made in China. The textile mills in the Southeast will, more than likely, shrink in number as will those engaged in textile production.

The agriculture industry is also being impacted. China is no longer the prime target of U.S. agricultural product exports. They've learned how to produce more using technology we gave them. Today, they are exporters of grain rather than importers.

I had an opportunity to visit with a friend who is a quality control consultant. He'd just returned from China where he was contracted by a Chinese automaker interested in entering the U.S. market with line of Chinese made automobiles. His job was to assure the maker that the quality of their product would be equal to the quality of Japanese automakers. He told me they have the technology and understand. He went on to say when their autos are exported to the U.S. they will sell for about 20 to 30 percent less and have quality equal to or better than that which is available from Japan.

Being in the powersports industry I'm aware of the impact being felt by retailers, as they are inundated by Chinese makers of ATVs, scooters, pocketbikes and motorcycles. Some of these products have reasonable quality; some don't.

Here's what I suggest you consider. There's no way any industrial nation can compete with a country whose workers average 61- cents per hour and whose engineers (who were educated in this country), work for the equivalent of $100 a week. With so many American manufacturers partnering with Chinese makers in order to control costs, the Chinese makers are gaining the advantage of technology given to them by their partners.

What to do? Look at what's available from China and determine if the maker has the necessary financial wherewithal, insurance, quality and warranty to meet your business philosophy. Understand that there will be a disorderly marketplace and a great deal of angst while the market changes.

China represents a freight train heading straight for you. Don't stand in front of it in an attempt to stop it. Instead, you would be better served if you did your research and then found a way to hop on. Accept the fact that it may be a bumpy ride at the beginning.

Keep in mind that Wal-Mart currently purchases more products from China than England and Russia combined. That's just one customer. Wal-Mart's success can be attributed, at least in part to their ability to buy Chinese goods at more than competitive prices.

Here's where I'll step out and make a prediction: I predict that China will, within five years, be the equal of Japan in providing quality products to the U.S. I'm not saying I like it but unless there are strategic changes in import regulations I don't see anything that will alter that paradigm.

Like this article? Read more by John Wyckoff:

Powersports Industry Trends for 2005

How Harley Davidson Lost its "Cool"

And be sure to check out his new book, Mind Your Own Business, 2nd Edition.

China, ROA and Funny Business Names

Today I am hosting Carnival of the Capitalists over at the RFID Weblog. Carnival just keeps getting more and more popular all the time -- this week's round-up had nearly 50 entries. Some great stuff -- let me point you to just a few of the posts that are small business and entrepreneur-related:

• A Crack in eBay's Facade? - Ezra Marbach at the China Stock Blog notes that eBay claims to be the number 1 online auction in China, but presents evidence suggesting that Chinese competitor, Alibaba's Taobao.com, is pulling ahead and may be gaining.



• The 3 R's of Business Plans - Rosa Say at Talking Story defines ROI, something you've no doubt heard of. But she also defines two new terms to consider in business plans: ROA and ROR.



• The Pun-Based Shop Name - For some light humor check out Wordlab's post about pun-based shop names. Small business owners are notorious for coming up with some of the funniest names for their businesses -- usually plays on film titles, famous lines or other phrases.

But, heck, don't limit yourself to these few posts. Check them all out.

PowerBlog Review: Security Awareness

Editor's note: Welcome to the fifty-sixth in our series of PowerBlog Reviews of business weblogs.


Security Awareness for Ma, Pa and the Corporate Clueless is a blog by the Security Awareness Company, headquartered in Seminole, Florida, USA. The company teaches computer users to combat security threats with personal knowledge and not to just rely on technology, by becoming "security aware" about avoiding viruses, managing passwords and protecting vital information.

The company views the blog as the central piece in their guerrilla marketing strategy on the internet. The company is in the training and education business. Having a blog to publish content is central to the company's business. Greg Hoffman, the Chief Marketing Officer of the company tells me:

"Our CEO, Winn Schwartau, is a legendary expert in the Computer Security Industry. For the last twenty years, Winn has written more than a dozen books and thousands of articles on topics ranging from Information Warfare to Internet ethics for kids. We needed to find a vehicle for all of this accumulated content and give computer users tips and tricks about how to protect themselves. The blog has become a central publishing house for security awareness content."

The company is in the business of selling training and education, yet it gives away considerable content through the blog.

The posts are a combination of current news items about computer and cyber security, and mini-tutorials on topics such as "What's a virus?" They strive to give a balanced view of the topic of security. For instance, there is a post that points out that not all hackers are bad.

The blog also features guest posts by bloggers with special expertise, including this post on resume fraud.

The company combines the blog with a newsletter, not in place of the newsletter. They also offer RSS feeds as a third strategy for delivering their messages and connecting with prospects and customers. The blog always features prominently in the monthly newsletter.

They use an interesting way to integrate the blog with their commercial website. On the blog is a graphic that looks like a school chalkboard advertising online security courses for $5.00 each. The graphic links directly to the online courses. I don't know how many courses the company sells through the blog, but at $5.00 it has to be close to an impulse buy, so presumably they would sell well.

To attract traffic to its blog the company has used a combination of techniques. They submitted the blog for various awards and recognitions, including USA Today for which they were named as a Hot Site. They also cross-link with relevant-topic blogs and sites.

I asked Greg his advice for newbie bloggers. He says to make sure the content is something the target audience cares about, and stick to the message. But at the same time, listen to your audience and adapt accordingly. He also advises coming up with a plan and a schedule for blogging.


The Power: The Power of Security Awareness for Ma, Pa and the Corporate Clueless blog is in the way it is central to the company's online strategy as a place to house writings on computer security. They've turned it into an unintimidating, welcoming place for those without technical knowledge.

Is 2005 the Year of RSS?

If 2004 was the year of the blog, then could 2005 be the year of RSS?

We are in the very earliest stages of this new technology. According to the Pew Internet and American Life Study, only 5% of Internet users use RSS readers today.

However, activity surrounding RSS is heating up. It seems like not a week goes by that some new service pops up for RSS. The pace of new development is dizzying.

You know exciting innovation is happening when the venture capitalists start circling. Because this is an emerging market, we can expect considerable confusion before the dust clears. Brad Feld of Mobius Venture Capital, makes this very point. He recently wrote that we have entered the "me too" phase where everyone is jumping on the RSS bandwagon, including venture capitalists hungry for deals:

"The cliche 'watching a car wreck in slow motion' comes to mind. It's definitely fun in a sick sort of way. Welcome to the me too zone - I believe we just entered it for the RSS / blog world. There is a huge adoption (and innovation) curve ahead of everyone who is doing stuff with RSS / blogging - and there are plenty of good investments left to make and companies to create - but the noise and clutter is about to get really loud."

It's true that it may be a car wreck for VCs and some fledging startups. That's what always happens in an emerging market. Giving birth is never painless; moreover, it's messy. Many of the startups surely won't make it.

On the other hand, for content publishers and average Web surfers, it's a heady time. We're about to have a smorgasbord of choice laid at our feet. And given the price points of online services these days, many will be low cost or free.

Regardless of which companies make it, content publishers and content consumers will be better off. We'll end up with powerful new RSS services that we can barely conceive of today, because they are still a glimmer in some entrepreneur's eye. We will use them for marketing and public relations. And the way we access and consume online information will be revolutionized.

In many ways I find RSS more exciting than the blog phenomenom. I think RSS has even more business potential. And so far we've only seen the tip of the iceberg of what RSS can do.

In a previous post I explain why RSS is so exciting and why it's about a lot more than simply reading feeds in feedreaders.

RSS and Marketing

On Thursday I gave a presentation on RSS to the Independent Practitioners Group here in Cleveland, Ohio. I was bowled over by the enthusiastic interest in RSS by this group of marketing and public relations professionals.

RSS is not likely to replace email anytime soon. But it has tremendous potential from a marketing perspective. Every marketing professional needs to be aware of what RSS can do.

Before RSS becomes more widely adopted, though, two things will have to change.

First, we have to get rid of the technical lingo obfuscating RSS. For instance, if you are trying to entice newbies to try a feed, you can't do it very well through a link that says "Syndicate this site." I remember how baffled I was when I first encountered that phrase. Why, I thought, would I want to syndicate someone's site? What exactly was I being expected to do by "syndicating" someone's site? What was in it for me?

RSS adoption will move faster once we all learn to use language that conveys the benefits of RSS to the user.

Second, we need to broaden our understanding of what RSS can be used for. RSS is about much more than getting burned-out trying to consume super-human volumes of RSS feeds through feedreaders. (Maybe Robert Scoble can read 500 feeds a day -- more power to you, Robert -- but that's not how I plan to spend my limited time on this earth.) I personally find reading content through today's aggregators a marginal attraction.

Yes, I use aggregators -- every day. I use them for my business research and to see what's new on my favorite blog sites. I use the online services, especially Bloglines, which in my opinion is the best of them.

The biggest benefit that I get out of the RSS online services is actually their search engines and alerts. I go to Bloglines to find out who is linking to my site and for research purposes. Same goes for Technorati.

But to do my reading, I much prefer to visit individual sites themselves. Dry strings of text one after another in a feedreader window don't do a thing for me. I like to see content the way the writer wanted it presented. Visiting the site is part of the entire user experience.

The real business benefit of RSS will come when more large corporations and small businesses discover how to leverage RSS for marketing and business communications purposes. RSS can be used to push out information about press releases, product announcements, company news, newsletters and other communications. It even can be used to display news from one site on another site.

Recently I've been trying out some new RSS tools. The ones I like to explore are marketing and PR tools. Marketing and PR -- that's where the exciting stuff is happening. Here are two tools I am finding useful:

• Syndicate IQ:
  
  This service tracks the number of subscribers to my various feeds. It tells me how many readers have subscribed to my feeds, how many are actually looking at my content, when they look at it, and lots of other detailed information.
  
  The statistics I am showing here to the right are just a few of the many statistics it gives me. Those who are familiar with email marketing services that track reader statistics will understand the value of Syndicate IQ.



• Nooked: Nooked provides a hosted service to allow you to create RSS feeds easily for a Web page -- separate and apart from a blog page. That's valuable, since not every business communication fits neatly into blog posts. And I think Nooked's new directory for corporate RSS feeds is a brilliant idea. If you have a corporate RSS feed, I urge you to go over and submit it to Nooked's directory.

Mobile Phones for Small African Farmers

Howard Rheingold writes that small scale farmers in Africa are leveling the playing field through technology. Using mobile phones and messaging technology, farmers get access to valuable market data:

Markets aren't only for the rich. Certain kinds of information, however, convey advantages to those have the right data at the right time.

Until recently, only the relatively wealthy had swift access to relevant market information. The cost of technologies that connect people with economically useful price data has declined steadily, however, from the tycoons of the early 20th century with their home ticker-tape machines to the day-traders of recent decades with their desktop PCs, and now, to farmers in developing countries who are beginning to own mobile phones.

With more than 320 million mobile subscribers in China already, and 150 million mobile phones among the 200 million phones projected for India (where mobile phone use already exceeds land line use) by 2007, the mobile phone looks like tomorrow's most likely access device for agricultural market information.

Read the whole thing -- it is an interesting article on a topic that is off-the-beaten track. Hat tip to Timbuktu Chronicles for the link.

PowerBlog Review Schedule

One of the Internet trends we spotted over a year ago was that of business blogging. To track that trend, we started a weekly feature back in February of 2004 called PowerBlog Reviews.

Each week we review notable examples of blogs that are being used for some sort of business purpose, with a concentration on "small business." We pick out a few key points about each blog that we think are powerful and serve as a "lesson" to other bloggers.

We've completed 55 PowerBlog Reviews to date, covering sites from six countries.
I thought you might like to see the schedule of blogs we will be reviewing in upcoming weeks:

13 March 2005 - Security Awareness
20 March 2005 - Decent Marketing
27 March 2005 - George's Employment Blog
3 April 2005 - Genuine Gems for Pearl Girls
10 April 2005 - Media Advisor
17 April 2005 - Coyote Blog

If you would like your site reviewed, please email me. There is never any charge to have your blog reviewed.

I am, though, seeking a sponsor for the entire PowerBlog Review series. This will help defray the costs of the Reviews, which have become quite popular and take a chunk of time to produce each week. Sponsorship would be ideal for any company in the blogging or online space, serving the small business market. Prospective sponsors should email me for details.

Liability Costs Hurt Small Businesses Disproportionately

It seems like not a day goes by in the United States without hearing about the high liability costs burdening businesses. That includes malpractice liability costs for doctors and hospitals.

Liability costs are impacting businesses harder each year. A Towers Perrin Study illustrates how tort costs have grown much faster against businesses than against individuals since 1990, as in this chart:

Now, don't start feeling good, thinking "liability costs are being absorbed by those huge multi-national corporations so who cares anyway?".

Consider this: small businesses bear a disproportionate amount of liability costs.

It is the small business -- perhaps a family-run business or a tech startup or a local business employing a handful of people -- that bears the biggest burden, according to another study by the Institute for Legal Reform, "Liability Costs for Small Business."

In it are these telling statistics:

• Small businesses ($10 million or less in annual revenue) bear 68% of the cost of tort liability each year in the U.S., but take in only 25% of business revenue. For a business with $10 million in annual revenue, the average tort liability cost is $150,000 per year.



• Very small businesses ($1 million or less in annual revenue) bear 26% of the business cost, but take in only 8% of business revenue. A small business with $1 million annual revenue pays about $17,000 a year in tort liability costs.

Think about the money being spent on liability insurance premiums, self-insured damage awards, defense costs, and so on. That money might be better spent to expand or improve health benefits for employees, increase their take-home pay, and reward business owners and investors for their business initiative.

And before you hastily concur with Shakespeare's line to "kill all the lawyers" remember that this is a complex, systemic problem. It's not the fault of any one group -- be it lawyers, or judges, or insurance companies or juries. There is no simple fix, and it is going to take legislative action to solve.

Technorati tags: small business; legal.

Carnival of the Capitalists Arrives at Blogcritics

Carnival of the Capitalists, that weekly business event that travels from blog to blog, has arrived over at Blogcritics -- check it out. Eric did a nice job with it.

Next week -- March 14 -- Carnival will be stopping over at my other blog, the RFID Weblog. To submit your entry for next week's Carnival, please use this handy Carnival of the Capitalists submission form. Get your entries in early!

ChoicePoint's Small Business Action Raises Bigger Issues

ChoicePoint, the embattled data broker, has announced it is suspending most sales of data to small businesses. The action affects the company's 17,000 small business customers.

The announcement is designed to re-assure investors and regulators that it is taking action to combat recently revealed lapses in data security. But the announcement raises more serious issues about ChoicePoint's actions and internal controls -- or lack thereof.

ChoicePoint is in the business of gathering personal data about consumers that it sells to insurance companies, banks, government agencies, and businesses. Buyers of that data use it to determine insurance premiums and interest rates, do pre-employment screening, etc.

It turns out that scammers have been posing as small businesses to improperly access data about individuals. The scammers would open accounts with ChoicePoint masquerading as small businesses and then improperly use the sensitive personal data for identity fraud.

The most recent announcement comes a few weeks after earlier news that 145,000 American consumer records at ChoicePoint were compromised.

When I first read the latest news report, it sounded like using a sledgehammer to swat a fly. Why cut off all small businesses, many of whom have a legitimate need for data, just because of a few bad apples?

But then I read the company's announcement more closely.

It seems that two things are going on, both of which highlight lapses in ChoicePoint's procedures.

• Vetting small businesses - Small businesses now are being vetted to make sure they really are small businesses. Apparently ChoicePoint did a poor job of checking the credentials of the "small businesses" it sold data to, in the first place.
  
  That's rather ironic for a company that is in the business of checking people out. ChoicePoint is "re-credentialing" those small businesses.



• Limiting use of sensitive data - ChoicePoint has decided to limit data sales to certain purposes, including "consumer-driven" transactions.
  
  A literal reading of the company's announcement suggests that small businesses should still be able to obtain data for pre-employment screening, tenant-screening and other "consumer-driven" transactions. In other words, if the consumer wants a transaction to happen, and the screening is a condition to that transaction, the information will be given out.
  
  In my view those are probably the most common uses small businesses have for sensitive personal data of individuals, anyway. Typically a small business needs to conduct a background check when hiring someone or renting out premises. In these situations acquiring sensitive information serves a legitimate need.
  
  But here is the bigger question. If ChoicePoint is now limiting the use of data to certain consumer-driven transactions (and a few other needs), for what other purposes were they selling data before now? What were they doing before that they no longer consider legitimate?
  
  Was it for sales of direct marketing data? If so, why give out sensitive data such as social security numbers for direct marketing purposes, anyway?

ChoicePoint could have done a better job limiting the use of sensitive personal data to legitimate "consumer-driven" transactions in the first place. If it had done that, and vetted its business customers with the same level of detail as the individuals it reports on, there would be no need to take the action it is now announcing.

By the way, as an individual you may be concerned about the data that is on file about you. Go here to opt out of having personal information included in databases.


Technorati tags (what are tags?): small business; privacy; choicepoint.

PowerBlog Review: JSLogan

Editor's note: Every week we analyze and review a small business blog, to demonstrate how small businesses are leveraging this new format. This is the fifty-fifth in our series of PowerBlog Reviews.


JSLogan is a blog by Jim Logan, founder and President of Accelerate Business Group, LLC. The company helps businesses increase their sales and revenues.

Interestingly, the blog is the company's sole web presence, with no other website. Using a blog as the sole Web presence is a trend I am encountering more frequently among small businesses. Jim explains why businesses like his are choosing a blog format over a traditional website:

"In a static site you get one chance to convince a prospect to engage with you. Once you read an About Us, Solutions, and Services page, why would you ever go back to a website? You get maybe 1000 words to convince someone you're worthy of earning their business.

A blog gives a reader reason to return time and again. Your posts give multiple views and perspective of your value and benefits."

Currently he is using a multi-lingual blogging platform called B2Evolution.

The majority of the posts are about sales techniques, either to get new customers or to get repeat business. Jim says he writes the blog as a resource for existing clients, many of whom he is coaching about how to increase revenues.

He gives focused, practical down-to-earth advice. I especially loved one recent post, where he coaches a tech startup how to create a sales presentation, after the company told him it took at least one hour to deliver the presentation: "Abraham Lincoln's Gettysburg Address, considered by many to be the greatest American speech of all time, defining democracy and our purpose as a nation, took three minutes to deliver. * * * So, why would it ever take anything more than 30 minutes to describe a company, it's offering, and benefits to a prospective customer? That's 10 times longer than Lincoln used at Gettysburg!" Indeed.

Jim will pick a blog that he admires and extend the conversation. That's part of what is meant when people talk about blogs as "conversations."

For instance, he will link to a post on another blog that gives tips, and then add one of his own tips to the list started by the other blogger. Jim's self-imposed rule is to comment only when he can add something of value.

Jim uses an unusual artifice that I haven't seen used on other blogs: 4 visual labels (images) describing the practical use of a blog post. He will post one of four images next to a post. A thumbs-up signifies a best practice. A light bulb signifies a new idea generator. And so on.

Jim offers this advice for newbie business bloggers: "Keep posting -- even if you think you're the only person in the world that's reading. Dedication to posting and honesty will draw readers. Never give up."

Jim blogs from Meadow Vista, California, USA in the foothills of the Sierra Nevada, half way between Sacramento and Lake Tahoe. He has been blogging since December 2004.


The Power: The Power of JSLogan is in the way it provides practical, thoughtful and credible information on how to grow a business -- particularly sales advice.

10,000 eBay Cottage Industries in the U.K.

The United Kingdom is now eBay's third largest market, after the United States and Germany. The U.K. site for eBay has 10 million members and is growing at the rate of more than 160% annually.

What's more, there are 10,000 entrepreneurs in the U.K. making a living as eBay sellers:

For the more entrepreneurial, the site is a powerful new way to reach customers. The company estimates that at least 10,000 people in the UK now rely on eBay to make a living, having recast an established "offline" business as an internet-based "shop window", or turned a hobby into a commercial venture.

eBay has transformed certain industries entirely. The antiques and collectibles industry is one of them.

I remember in the 1990's going on a business trip to Brighton, England. In between meetings I managed to steal a few hours to visit the antique shops in the "Lanes" in Brighton, and bought a small lacquer box. The price was right. The dealer was knowledgeable and helpful.

A few years later I went online to eBay and found the same dealer. It turns out the dealer had closed his physical shop in Brighton's Lanes. He was selling exclusively online through a website and eBay -- still is today.

I emailed him and re-introduced myself. I inquired about the change.

He explained that the Internet and eBay in particular had changed his business. He felt he could find more collectors and interested buyers online for the niche antiques he carried. He now sold items all over the world, and in particular to the United States market.

Read the Times article that I've linked to above. It is long and substantive, and gives a good flavor for how British entrepreneurs are leveraging eBay.

Technorati tags: ebay; small business; ecommerce.

More Evidence that Online Audio is Hot

BusinessWeek has an insightful report on something that I brought up a while back: the explosion in growth of podcasting, and the dramatic changes in radio and audio on the Internet. In an article entitled "The New Radio Revolution" it reports:

"For all the hullabaloo it's generating, podcasting is not even close to being a business yet. While startups such as Odeo and The Podcast Network are providing technological support and creating a podcasting network, right now Ibbott has barely enough ads to cover expenses, and most podcasters work for free.

EASIER ENTRY. Maybe a few will come up with a way to make a living doing it. Maybe not. Regardless, a trend is afoot that could transform the $21 billion radio industry. Consider the basics: With no licenses, no frequencies, and no towers, ordinary people are busy creating audio programming for thousands of others. They're bypassing an entire industry.

The digital revolution took its time getting to radio. Now it's exploding -- and the big bang goes far beyond podcasting. As radio shows are turned into digital bits, they're being delivered many different ways, from Web to satellite to cell phones. Listeners no longer have to tune in at a certain time, and within range of a signal, to catch a show or a game. As the business goes digital, the barriers to entry -- including precious airwaves -- count for less and less."

As I noted, the citizen broadcaster has been birthed.

If you needed any further evidence of the ascendancy of podcasting and citizen broadcasting, consider what Evan Williams, founder of blogging software Blogger, is doing now. He is heading up a five-person startup, Odeo, designed to provide a platform for easy podcasting, as reported by the New York Times.

After audio, I predict video is next. But that is going to take a few years.

New State Small Business Reports Marginally Helpful

The National Federation of Independent Businesses (NFIB), which represents 600,000 small businesses in the United States, just inaugurated a new series of state surveys of small business owners.

Called the "Small-Business Conditions" reports, they cover 26 of the 50 states. Each state report contains a survey of business owners from that state.

Like the NFIB's national-level Small Business Economic Trends reports (which contain their famous Optimism Index), each state report contains information about how business owners feel about the economic conditions and outlook for their state.

Unlike the national report, however, the state reports are only marginally useful. Maybe it is because they are new. They lack the commentary and historical comparisons that make the national-level report so insightful.

The NFIB does not seem to have figured out how to analyze and make sense of all the state-level data. Right now each state report consists of some data tables and a press release.

Also, the state results are not compared to the national level results. Consequently, it's hard to put the state reports into perspective on a macro level or on an historical basis.

Even though I do not find the reports particularly helpful, I note them here in case you are interested in seeing small business owner sentiments at the state level.

Small Businesses Create Customer Evangelism

Last week we recorded some wisdom from Jackie Huba, the co-author of "Creating Customer Evangelists."

Jackie Huba discusses how businesses -- especially small businesses -- can create customer evangelists. Jackie has some great tips specifically for small businesses.

So what is a customer evangelist, you ask? Here is how Jackie describes it: When customers are truly thrilled about their experience with your product or service, they can become outspoken "evangelists" for your company.

She also takes the mystery out of trendy buzzwords such as viral marketing, word of mouth, and buzz marketing -- and describes which ones work for the small business enterprise. (Hint: "word of mouth" is perfect for small businesses.)

Listen to Jackie online while you work using the free Windows Media player. Or download the podcast version to your iPod. The conversation in both formats is available over at SMB TrendWire -- and it is free.