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Enterprise was the golden calf, but startups look to SMBs for next boom

(BUSINESS MARKETING) SMBs could be the next frontier for B2B software sales. They need tech like any other large company, and there are more of them.

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Your tech startup is finally starting to take off. You’ve spent what feels like your entire lifetime pulling your hair out to figure out how to shape your idea into the most unique, functional, cornering-the-market silver bullet any VC has ever seen. You have momentum and passion and you’re ready for the big leagues. Everyone in your corner advises you to think big, and try to sell your product to the biggest, baddest players in the game. Sign a fat contract and it will carry you through the rest of your growth if you could just land that one client with 5,000 employees and a billion more customers, partners, and accordingly long coattails you can ride into the sunset.

But what if the all that glitters is not the only gold?

The state of New York reported in 2019 that 99.8% of all businesses have fewer than 500 employees. Businesses employing less than 20 people experienced the largest gains in 2016, adding 89,213 net jobs. In California, the statistics are virtually identical: 99.8% of businesses have fewer than 500 employees, employing 7.1 million people (48.8% of California’s employees).

In 2012, the City of Austin initiated Imagine Austin, a comprehensive plan adopted by the city to work towards a vision where Austin is “a beacon of sustainability, social equity, and economic opportunity.” According to data collected for the plan, an average of 251,715 Austinites attended small business workshops each year from 2012 to 2016. The workshops are “geared toward professional development, education, and community networking designed to support the capacity, sustainability, and growth of the creative sector in Austin.” Additionally, the number of employees working for businesses with fewer than 50 employees increased by an average of 3.3% per year from 2008-2015.

Despite the obviously robust market in small and medium businesses (SMBs), many software companies continue to target the biggest fish for B2B contracts. The prevailing theory is that large companies have the infrastructure, wherewithal, and cash flow to implement new technology systems to stay competitive. The prospect of hooking such a client is lucrative, reliable, and sexy.

However, SMBs have the same needs as their larger peers. They are just as interested in providing the most current and convenient service to their customers, the most effective and seamless payroll processes to their employees, and the most efficient bookkeeping for themselves as their heftier competitors.

Obviously the risk is greater in a sub-economy where SMBs have a 30% closure rate in their first year. And of course let’s not take for granted the disproportionate impact that the COVID-19 epidemic is inflicting on SMBs, particularly in the brick-and-mortar retail and service industries that have been forced to close or operate on adapted service terms indefinitely nationwide.

But as in all business ventures, there exists no opportunity without risk. Perhaps it’s time for funders to rethink traditional sales strategies to take seriously the SMB market that is truly the under appreciated lifeblood of the American economy.

Heather Buffo is a Cleveland native, a recovering Bostonian, and an Austin newbie. Heather has her Bachelor of Arts in Neurobiology from Harvard University, and is a City Year Boston AmeriCorps alum. When she's not writing for AG, you can find her pouring beers at the Brewtorium, but only one at a time.

Business Marketing

Ghost Reply has us asking: Should you shame a recruiter who ghosted you?

(BUSINESS MARKETING) Ghost Reply will send an anonymous “kind reminder” to recruiters who ghost job candidates, but is the sweet taste of temporary catharsis worth it?

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Stressed woman at a laptop with hands on head, considering if she should send a Ghost Reply.

People hate to get “ghosted” in any situation, personal or professional. But for job seekers who may already be struggling with self-esteem, it can be particularly devastating. Ghost Reply is a new online service that will help you compose and send an email nudge to the ghoster, sending a “kind reminder” telling them how unprofessional it is to leave someone hanging like that.

Ghost Reply wants to help you reach catharsis in all of this stressful mess of finding a job. Almost all of the problems and feelings are compounded by this confounded pandemic that has decimated areas of the workforce and taken jobs and threatened people’s financial security. It is understandable to want to lash out at those in power, and sending a Ghost Reply email to the recruiter or HR person may make you feel better in the short term.

In the long run, though, will it solve anything? Ghost Reply suggests it may make the HR person or recruiter reevaluate their hiring processes, indicating this type of email may help them see the error of their ways and start replying to all potential candidates. If it helps them reassess and be more considerate in the future and helps you find closure in the application/interview process, that would be the ideal outcome on all fronts. It is not likely this will happen, though.

The Ghost Reply sample email has the subject line “You have a message from a candidate!” Then it begins, “Hi, (name), You’re receiving this email because a past candidate feels like you ghosted them unfairly.” It then has a space for said candidate to add on any personal notes regarding the recruiter or process while remaining anonymous.

I get it. It’s upsetting to have someone disappear after you’ve spent time and energy applying, possibly even interviewing, only to hear nothing but crickets back from the recruiter or HR person you interacted with. It’s happened to me more than once, and it’s no bueno. We all want to be seen. We all want to be valued. Ghosting is hurtful. The frustration and disappointment, even anger, that you feel is certainly relatable. According to several sources, being ghosted after applying for a job is one of the top complaints from job seekers on the market today.

Will an anonymous, passive-aggressive email achieve your end? Will the chastened company representative suddenly have a lightbulb go off over their heads, creating a wave of change in company policy? I don’t see it. The first sentence of the sample email, in fact, is not going to be well received by HR.

When you start talking about what’s “unfair,” most HR people will tune out immediately. That kind of language in itself is unprofessional and is a red flag to many people. Once you work at a company and know its culture and have built relationships, then, maybe, just maybe, can you start talking about your work-related feelings. I believe in talking about our feelings, but rarely is a work scenario the best place to do so (I speak from experience). Calling it unprofessional is better, less about you and more about the other person’s behavior.

However, it’s unclear how productive Ghost Reply actually is. Or how anonymous, frankly. By process of deduction, the recipient of the email may be able to figure out who sent it, if it even makes it through the company’s spam filters. Even if they cannot pinpoint the exact person, it may cast doubts on several applicants or leave a bad taste in the recruiter’s mouth. It sounds like sour grapes, which is never a good thing.

There may be any number of reasons you didn’t get the job offer or interview, and they may or may not have something to do with you. Recruiters answer your burning questions, including why you may have been ghosted in this recent article in The American Genius.

Ultimately, you will never know why they ghosted you. If it makes you feel better or at least see the issue from both sides, the amount of job candidates ghosting recruiters after applying and even interviewing is equally high. Some people simply either have awful time management skills or awful manners, and at the end of the day, there’s not much you can do about that.

Focus on your own survival while job hunting, instead of these disappointing moments or the person who ghosts you. It will serve you better in the long run than some anonymous revenge email. There are other ways to deal with your frustration and anger when you do get ghosted, though. Try the classic punching your pillow. Try taking a walk around the block. If it helps to put your frustration into words, and it very well may, then do so. Write it on a piece of paper, then burn it. Or type it all in an email and delete it. For your own sake, do NOT put their email address in the “To” line, lest you accidentally hit “Send.”

The sooner you can let it go, the sooner you can move on to finding a better job fit for you.

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Business Marketing

Free shipping is everywhere… how can small businesses keep up?

[BUSINESS MARKETING] Would you rather pay less but still pay for shipping, or pay more with free shipping? They may cost the same, but one appeals more than the other.

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Person standing over pacakge, sealing with masking tape.

When it comes to competing with huge corporations like Amazon, there are plenty of hurdles that smaller businesses have to cross. Corporations can (and do) undercut the competition, not to mention garner a much larger marketing reach than most small businesses could ever dream of achieving. But this time, we want to focus on something that most people have probably chosen recently: Free shipping.

How important is free shipping to consumers? Well, in a 2018 survey, Internet Retailer discovered that over 50% of respondents said that free shipping was the most important part of online shopping. In fact, when given a choice between fast or costless shipping, a whopping 88% of those surveyed chose the latter option.

Part of this has to do with the fact that shipping costs are often perceived as additional fees, not unlike taxes or a processing fee. In fact, according to Ravi Dhar, director of Yale’s Center for Customer Insights, if it’s between a discounted item with a shipping fee or a marked up item with free shipping, individuals are more likely to choose the latter – even if both options cost exactly the same amount.

If you’re interested in learning more, Dhar refers to the economic principle of “pain of paying,” but the short answer is simply that humans are weird.

So, how do you recapture the business of an audience that’s obsessed with free shipping?

The knee jerk reaction is to simply provide better products that the competition. And sure, that works… to some extent. Unfortunately, in a world where algorithms can have a large effect on business, making quality products might not always cut it. For instance, Etsy recently implemented a change in algorithm to prioritize sellers that offer free shipping.

Another solution is to eat the costs and offer free shipping, but unless that creates a massive increase in products sold, you’re going to end up with lower profits. This might work if it’s between lower profits and none, but it’s certainly not ideal. That’s why many sellers have started to include shipping prices in the product’s overall price – instead of a $20 necklace with $5 shipping, a seller would offer a $25 necklace with free shipping.

This is a tactic that the big businesses use and it works. If you can’t beat ‘em, join ‘em, right?

That said, not everyone can join in. Maybe, for instance, a product is too big to reasonably merge shipping and product prices. If, for whatever reason, you can’t join in, it’s also worth finding a niche audience and pushing a marketing campaign. What do you offer that might be more attractive than the alluring free shipping? Are you eco-friendly? Do you provide handmade goods? Whatever it is that makes your business special, capitalize on it.

Finally, if you’re feeling down about the free shipping predicament, remember that corporations have access to other tricks. Amazon’s “free” prime shipping comes at an annual cost. Wal-Mart can take a hit when item pricing doesn’t work out. Even if your business isn’t doing as well as you hoped, take heart: You’re facing giants.

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Business Marketing

How many hours of the work week are actually efficient?

(BUSINESS MARKETING) Working more for that paycheck, more hours each week, on the weekends, on holidays can actually hurt productivity. So don’t do that, stay efficient.

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Clock pointed to 5:50 on a plain white wall, well tracked during the week.

Social media is always flooded with promises to get in shape, eat healthier and… hustle?

In hustle culture, it seems as though there’s no such thing as too much work. Nights, weekends and holidays are really just more time to be pushing towards your dreams and hobbies are just side hustles waiting to be monetized. Plus, with freelancing on the rise, there really is nothing stopping someone from making the most out of their 24 hours.

Hustle culture will have you believe that a full-time job isn’t enough. Is that true?

Although it’s a bit outdated, Gallup’s 2014 report on full-time US workers gives us an alarming glimpse into the effects of the hustle. For starters, 50% of full-time workers reported working over 40 hours a week – in fact, the average weekly hours for salaried employees was up to 49 hours.

So, what’s the deal with 40 hours anyway? The 40 hour work-week actually started with labor rights activists in the 1800s pushing for an 8 hour workday. In 1817, Robert Owen, a Welsh activist, reasoned this workday provided: “eight hours labor, eight hours recreation, eight hours rest.”

If you do the math, that’s a whopping 66% of the day devoted to personal needs, rather than labor!

Of course, it’s only natural to be skeptical of logic from two centuries ago coloring the way we do business in the 21st century. For starters, there’s plenty of labor to be done outside of the labor you’re paid to do. Meal prep, house cleaning, child care… that’s all work that needs to be done. It’s also all work that some of your favorite influencers are paying to get done while they pursue the “hustle.” For the average human, that would all be additional work to fall in the ‘recreation’ category.

But I digress. Is 40 hours a week really enough in the modern age? After all, average hours in the United States have increased.

Well… probably not. In fact, when hours are reduced (France, for instance, limited maximum hours to 35 hours a week, instead of 40), workers are not only more likely to be healthier and happier, but more efficient and less likely to miss work!

So, instead of following through with the goal to work more this year, maybe consider slowing the hustle. It might actually be more effective in the long run!

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