Phil Simon, is the author of a great new book titled: The New Small: How a New Breed of Small Businesses Is Harnessing the Power of Emerging Technologies. He joins our radio show tomorrow at 9:30 AM, Central.
I found The New Small: How a New Breed of Small Businesses Is Harnessing the Power of Emerging Technologies amazing. It's well-written. Phil's included many resources with each chapter. And each chapter profiles a company in how they used some of those resources and what were the results for their company.
Phil, welcome to our show!
Let's talk about your book. Great book. I'm restraining myself from an extended raveup for it.
What was your reasonable aspiration or hoped-for future with writing this book?
Anytime you’re writing a non-fiction book you have to think about two fundamental questions:
- Who’s going to buy the book?
- What are they going to do with the information?
As 2010 progressed, as a small business owner myself and interacting withother small business owners there was this amazing disconnect. There were all these amazing technologies out there that would let business do all these unbelievable things yet people were still questioning do they need a website or do they need a Facebook page or a social media presence or hey have you heard about cloud computing?
It’s interesting to listen to you talk because you talk about how much you learned reading it. I learned a lot writing it. I’m certainly very knowledgeable when it comes to different technologies and how to deploy them. This is my third book.
On the other hand, I’m not going to lie to you, before I interviewed say the head of a dental practice I was unaware that there was open-source dental software that could save them $20,000 a year. I learned a great deal writing the book as well.
What metrics will show you have reached it or are making progress towards it?
For me the book’s a big, thick, business card. This isn’t a romance novel and I go back to my day job.
Yesterday I was meeting with an organization about developing some online training content or doing some customizing training. Of course, I brought a copy of the book. And the guy’s going to read it and hopefully he’s going to have a reaction that’s half as effusive as yours.
Quality and quantity matters. Yes, I’d love to sell a lot of copies and it has great commercial appeal. But, for me, it’s sorta silly to sell 10,000 copies and I get no speaking or consulting out of it. I’m more successful if I sold only a hundred copies but I was hired for a 6-month consulting gig or hired to be a keynote speaker where I reach many more people.
For me, it’s more nuanced than reaching a particularly great number, though I think I will.
Who were you writing for when you labored late at night to write this? Describe the reader you saw in your mind's eye.
Sure. I think plenty of books are kinda muddied as you don’t know their targeted audience.
With regard to The New Small I wrote it for:
A. Existing Small Business Owners. People who either struggle with Twitter or cloud-computing or the blizzard of technologies out there;
B. Potential Small Business Owners. The group of people who are considering starting a company whether they have a business idea or they get laid off. There are plenty of budding entrepreneurs out there;
C. Large Businesses. Finally, I wrote this book in part for large businesses because I think they need to act small. There are plenty of companies with existing technology that is outdated. And they can’t get out of their own way. They are burdened with bad culture or bad data or fundamentally bad processes, people issues.
For the most part, companies I profiled in The New Small don’t suffer from these problems. For instance, DodoCase has 4 employees and makes iPad cases and generate over $1million in revenues. There’s a success story.
Part of it, you get a nice review on a site like Engadget, so there’s a little serendipity. But mostly these are smart people who use technology in interesting ways.
To answer your question more fully, I chose to profile a wide array of small businesses. I’m not talking about the same companies over and over. I’m talking about dental practices and restaurants. Regardless of the industry you work or the type of company you run there’s probably something out there you could do differently or better and save you a lot of money or reach new customers.
You’ve already begun to answer this next question. But it deserves some more time. What problems or challenges of theirs were you trying to solve?
Fundamentally, I think all businesses, regardless if it’s a dental practice or a software firm, are trying to save as much money as possible and increase revenue as much as possible and I would argue trying to create interesting work environments.
For me, this goes back to my background in industrial relations, I believe in the primary importance of people. I know you mentioned you liked the cover of the book. There’s a reason taht the cover is laid out like that. You see the people with the gears. The gears are almost seconday. Anybody can go out and adopt cloud-computing or use SAAS. But what was different about The Neew Small was ultimately it came down to people. They should go to work and be inspired.
One of the companies I mentioned in the book was Boxcon, an 800,000 employee company in China and they’ve had a rash of suicides over the past year. And it’s completely dismal. Now, that’s extreme. But I think people want to go to work and enjoy what they’re doing and not want to kill their boss or throw a computer out the window like in Office Space.
I was also thinking about people and creating meaningful jobs. One of the books I reference in writing the book is Seth Godin’s Linchpin. I think at a small company you have a better chance of doing that...
What about your readers? What would be a new and improved reasonable aspiration or hoped-for future for them after reading your book?
You can save a great deal of money.
You can reach new customers.
There’s a guy by the name of Chef Tony in Maryland. He runs a seafood restaurant. He doesn’t have a marketing budget. He just spends his whole free time on social media. And he’s able to augment those efforts with having a great restaurant, with videos, with a podcast, with recipes.
The goal in the book is really to have organizations do a lot more with different technologies. The book is ripe with a lot of resources. I’m glad you said you didn’t want to read the book while messing around with your computer, watching TV, listening to the radio.
I wrote this book as a small business owner for other small business owners. Maybe they need to blog a bit more or look at their existing applications and see if they’re meeting their needs. Or are there different ways of doing the same things and saving some money?
You used a number of technologies and resources to gather the content for this book. Which ones were most important? Why?
When I decided to write this book I reached out to my own social networks. In some cases I know there’s a lot of restaurants out there and most of them have maybe a Facebook page. So when I profiled a restaurant I reached out on Facebook and asked if anyone knew of any hi-tech restaurants. And within 5 minutes somebody came back and said you gotta meet Chef Tony.
Beyond that I used Twitter, LinkedIn, some of the groups on profiling companies and I used HARO, or Help A Reporter Out which is a website where people can submit media queries and filter through the responses. By no means did I sit in a vaccuum. I looked at some favorite websites of mine like Mashable to see if any small businesses are doing interesting things.
I found more companies to profile than I expected. I tried to go 5 wide and 5 deep. I picked 11 companies that I thought were doing interesting things from different industries and figured I’d tell their story from different angles over the course of 8 - 10 pages.
It’s contextual. It’s how they use technology in interesting ways and creating jobs.
Great answer. Very clear. The phrase that comes to mind as I listen to you is crowdsourcing. Would that be wrong?
Yeah, in some cases. But don’t get me wrong. I didn’t post the book updates online every three days to make sure everybody was comfortable.
It’s like the reason Apple’s stock is down. People realize the primary importance of a guy like Steve Jobs. You do need somebody driving and you need input from others. I worked very closely with the owners of these 11 companies to make sure these chapters accurately expressed what they were doing.
My job was to make sure all these chapters made sense and if I took it up a level globally was the book laid out well, did it make a lot of sense. That was a lot of fun.
Crowdsourcing isn’t just for me, though. DodoCase was throwing out some different options for designs. They weren’t letting the crowd dictate how they ran their business. But they also asked for feedback at key points in their design process.
I think that’s a really powerful thing. You end up building this really powerful relationship with people. To fund this book in part, I created my own publishing company. My publisher wanted to do this book, put it out at $45.00 and release it in the spring of 2011. I went to KickStarter, created a project and raised almost $5000 to cover the start of this project. These people were willing to do it because they felt like maybe it was a good idea for a book. But they wanted to be part of the process. They appreciated the updates and when I hit my goal they felt like they accomplished something, too.
You can’t have the crowd running your whole company. But I think there are key points, not only for myself as a business owner, you may want to get some feedback before you do something strategic.
Many companies are afraid of what the crowd would say. I think Nestle got into a bunch of trouble about 6 months ago. They were seeking input on a logo change. they deleted all of the negative comments. I can understand profanity or inappropriate comments. But if someone says “I don’t like this because of x,y,z” and you delete their comments well, you’re going to irritate them.
Part and parcel of Crowdsourcing is the willingness to accept negative feedback. Businesses are still scared someone may have a negative experience. Dodocase’s example is so powerful. After their Engadget review they wound up with being swamped with the demand so rather than listen to customers complain about the shipping delays they were proactive and went out on the social networks and let people know “hey guys we’re still behind on our shipping schedule. But here are updates for you.”
You don’t want to wait until things go bad. You get out in front of it. No one likes calling an 800-number and given some stock answer. You want them to get proactive and communicate with you.
I think it’s a mistake a lot of companies both big and small tend to make.
Which technology did you discover in this process that was the most surprising and productive?
In the book I call them the 5 Enablers. They are:
- Software as a Service
- Open-Source Software
- Social Networks.
With regards to which one is most important it really varies. I wrote about a law firm that dropped its IT budget by 75% by putting all of its data in the cloud. To them, that’s significant. They don’t really use social networks as much, for legal reasons. Law firms tend to be a little cautious about blogging and social networks.
With restaurants you have Chef Tony. He’s very active on social media sharing recipes.
Different companies embrace these 5 Enbablers to a different extent. But to their credit they said flat-out we know we could do social networking better or we know we should switch this over to the cloud but we’re not quite there yet. I think the openness of these companies to get away from what’s not working and embrace things they are not really sure about is admirable.
In the book, I write in great length about some of the reasons small business has resisted these emerging technologies. It’s a free download on the website. Chapter 1.
I don’t know if there’s one most important technology. But I do think there’s this group of 5 that lets business get a whole lot of bang for their buck.
It’s really tough to pick one. But if pressed, I would say social media.
The New Small is not a social media book. That market is kinda saturated. There are so many of them out there.
With Cloud Computing you’re talking about changing the model. There are so many benefits. It’s not something you want to do over night. But setting up a Facebook page is something you can do in an hour. You can’t convert all of your data into the cloud in an hour.
Something like Zoho, I can set up my account and be interacting with a customer using theirCRM in an hour. It won’t have my data. I’ll still need to customize it.
But I’d say that social media, you can get going quickly.
Which is the one least utilized by small business?
I’d say it’s cloud computing. Cloud’s been around since the 60’s. Back then it was called utility computing. But cloud computing has become more pervasive for a number of reasons. Bandwidth is certainly one of those reasons. the decrease in storage costs. Another factor is the rise of mobility which is one of the 5 Enablers. I heard there are 2 billion cellphones on the planet. We now have the ability to access data and applications from anywhere on the planet. That has put pressure on these companies to make things more available.
It’s no longer acceptable to say “I’m not in front of my computer. I can get to it at the end of the day.” People want their information NOW. And I think that’s underscored the need to make your applications available as quickly as possible.
How do these 5 enablers address the two biggest challenges for small business:
- Hiring the best people?
Ok. Let’s talk about marketing. I would argue that there is not a direct relationship between cloud-computing and marketing. But social media will help you market your business more effectively if it’s done right.
Your 2nd part was about people. Let’s look at this in the light of collaboration. I have en entire chapter devoted to collaboration. No one wants to work in an inefficient way. there are plenty of companies in the book with employees who work a majority of the time or exclusively from home. Now in order for them to do they have to be able to collaborate.
Working from home is a major convenience. But if you have to drive into the office on a snow day because you’re company will not spring for a collaborative application, that tends to frustrate people.
Yes, it’s still work. Yes, people still argue; they have bad days. And these small companies are not perfect places to work. On the other hand they use these technologies to make the work fun. You can share your screen and desktop. And you don’t have to rely on emails.
I would argue that the technologies allow you work in a more efficient and fun manner. And there aren’t a lot of fun place out there. So, if you feel like you’re paid appropriately and you don’t have to run everything through 15 different levels of management and steering committees. That’s kinda cool place to work. Are you going to leave there?
It’s not like these companies figure out how to keep every key person. I write at the end of the book that one of the challenges for the new small is that each employee plays a really important role. We’re not talking about in IBM where there are thousands of consultants and one of them leaves it’s not a big deal. If you’re a 5 or 7 person company and one of them walks that could be really damaging. That’s one of the risks the new small face.
But, again, they’re willing to accept those risks because they are able to create these really interesting workplaces and people will want to work there.
Do you have a case study for either of these two: marketing or hiring the best people?
Sure. For marketing we have Chef Tony who’s been using social media to market his amazing company. He’s obviously very susceptible to decreases in revenues during a recession. But through social media he’s actually been able to increase his average check. He’s been extremely successful with social media and he doesn’t spend any money on traditional marketing.
With regards to finding and keeping the best people, it’s really a common theme among all these small business. When you’re trying to create a cool place to work and you’re valuing employee input and you’re making clear use of it, you want to do things in a way that has the least amount of BS as possible, you don’t have to worry about other employers stealing your good employees.
You Tweeted a link to a post you wrote titled 5 Things to Consider for Your CRM. What is CRM? And what are the 5 things?
“CRM” or “customer relationship management” is one of the most important types of applications a business can run. You’re tracking your customers or your leads or prospects along with back office functions like HR, payroll and accounting. It’s important for you to know who you’re customers are, what your customers are spending and being able to do analytics. Maybe they don’t have a CRM or don’t need one; they can get by with an excel spreadsheet. But Excel can’t do many of the things a proper CRM can do.
Many small businesses quickly find out as they grow that having the spreadsheet with them all the time isn’t feasible. Getting back to cloud computing and mobility if you have an iPad and you wanted to put a new contact into your CRM then that’s something you’re going to be able to do.
We’re talking about being able to customize the system. A lot of tools like SugarCRM and SalesForce allow you to change the front, logo or colors to make it look and feel like your own, without changing the backend functionality.
The ability to run important reports. Not everybody is a programmer. So being able to click a button and see sales by day or revenues by customer is something that’s really important.
That’s a couple of things I mentioned in the post.
You listed 11 traits that separate the New Small from their peers. One of them was They Understand the Importance of Social CRM. What is social CRM? Why is it important?
Well, if you go back 20 - 30 years ago you still had CRM. Customer Relationship Management. But the customer wasn’t really social.
These days every customer can reach millions of people whether it’s Facebook or LinkedIn or Twitter or blogging. So, social CRM is really a way of understanding the social customer.
I used to work in customer relations back in the 90’s for Sony Electronics. This was before the web had reached critical mass. At the time I heard this statistic that the average angry customer has told 60 other people about his or her experience. I can’t even imagine what that number is right now.
So with Social CRM you’re really trying to understand the social customer. That may be a matter of understanding the sentiment on blogs or Twitter. And if people are reaching out to you and they’re unhappy and they’re tweeting something, plenty of companies have social media presences or Twitter handles, ComCastCares was a particularly famous example. And if you were to vent something about ComCast on Twitter you’re going to get a response from ComCastCares because they know that an angry customer can do a lot of damage on Twitter.
And while you can’t make everybody happy, you can reach out to people and address bad issues and even pick up new customers. Social CRM is not simply a matter of containing the negative. It’s also a matter of attracting new customers. If you realize that some people like what you have, it’s a way of building a relationship with them. That wasn’t possible before we had the social web.
Where does social part of Social CRM end and the CRM begin? Where's the hand-off in this conversation?
I think it’s a very grey area. Companies that don’t have an effective social media presence or ones who want to ignore it because say a traditional accounting firm doesn’t blog or have a Facebook page, for them it’s probably straight forward CRM.
But for The New Small companies, they are extremely involved in social media and they care about what people say about them and again you can’t possibly make everyone happy. But I’m always concerned about what people say about me. You can use tools like Google Alerts or different mechanisms that keep your tabs on what people are saying about you, and your company and your industry.
Is there a CRM platform like Salesforce or ZoHo or SugarCRM that integrates with popular social media platforms like blogs, Facebook, Twitter, FourSquare?
There are so many platforms. The Sugar CRM is an open-source platform that you can download for free and customize.
One of the companies that I profile in the book, Red Seven, based out in Arizona sort of a computer services company, they treat a computer like a car that you lease. For people who can’t change their oil or their tires, in the same way most people don’t understand the registry of a computer or how to get inside and make some fixes, they used a version of SugarCRM. They customized it; they had the internal expertise to do that.
Some companies don’t have that expertise. And again that goes back to that point that there is no one application that is right across the board. But for any given company there is a right way of doing things for them.
The other issue is you may not want to integrate your customer data with these platforms like Facebook. It is all about the data. If there was a way to integrate Facebook with Salesforce I wouldn’t want to do that. That’s because Facebook would control my data. Third-party Facebook developers could have access to my customer data.
Even if you could I’m not sure you should. Let’s say that gets hacked. Now, they have your customer list.
There are limits to social media. I don’t want to make my life entirely public. There’s a reason that Google Maps in Europe had to pull back. Privacy laws were violated. They don’t want people being recognized outside their home.
Technology has progressed so fast that people don’t have their arms around it. To answer your question, just because you can do something doesn’t mean you should.
That’s a great point you bring: It’s all about the data. If you control the data, that’s great. But with so many platforms, particularly Facebook, they own your data.
It’s an interesting point. We have to draw a distinction between the types of data. You have your structured data: customer address and order number, etc. Facebook got in trouble when they somehow accessed your credit card information. It was one of the biggest gaffes to date.
But there are other types of data, unstructured types of data. I go back to DODOCase they’re letting it be known that there’s a problem and proactively contacting their people. Or maybe they’re crowdsourcing for a new idea or a new logo or a product change.
I think that’s healthy. But it’s general information. General comments and sentiments. You’re not talking about proprietary information.
Interacting with the world does leave a trail. Commenting on a blog post is data. Tweeting is data. It’s not the type of data that falls neatly into a spreadsheet which you can do quick totals or sub-totals to get basic customer information. But, again, it is all data.
I would argue that not all data is created equal. Some of that data you want to keep close to the vest whether you put that up in the cloud or have your own hosted server. But I would not make that available to the general public. But when I blog on my site, I’m not referencing a customer by name. I’m going to write that post in such a way that it gives me plausible deniability. I still want to give the example. But I don’t have to name it was company x and the guy’s name was John.
One of the biggest challenges especially for companies in the 5 - 25 employee range is affording specialized talent. They're needed but the company's not quite able to afford or justify their fulltime position. But you profiled a company's innovation solution for that. Tell us about Torrance Learning and their use of Co-Employment.
Torrance Learning is another company mentioned in the book. They realized they had reached a point where they needed full-time administrative help. But that could vary from week to week.
Through Co-Employment, they found an employee who wanted a full-time job but that employee worked for two companies at the same time such that the hours were about 40 per week.
That met their needs. And that allowed them to be flexible with one company saying they needed her for 30 hours this week, I need her for 15 hours next week. And they could schedule her so she was never double-booked or under-booked. And for the employee’s perspective that was beneficial as she had a full-time job.
Let's talk about the freemium business model. I like it's hype. But on the other hand, isn't it just relabeling, rebranding marketing costs as operating costs? Free wifi in Starbucks.
It’s an interesting point. I know with Starbucks they want to make the experience sticky. I just read absolutely amazing book called The 24-Hour Customer. The author makes the point that it’s all about managing time. So, if you’re Starbucks, you want people in the store. She calls it ‘dwell time’. They’re there. They’re hanging out and they’re more likely to buy more stuff. There’s a reason that Starbucks sells more than just coffee.
I agree with you. It may be nothing more than just relabeling costs. But ultimately you’re trying to give people an experience. You may not want to watch a demo. You may want to roll up your discs and play with the thing.
With increased bandwidth and storage costs now you can download these tools for free. You don’t have to install anything for Salesforce.com to work. You can just go and download it and in a few minutes you’re up and running.
I’m big on the freemium model. I think that it’s a challenge. You’re setting the expectation that everything you get is free.
I don’t want to get off the subject but I face the same challenge as an independent consultant. People want me to speak for free. People want me to write for free. And I say if I get on the Today show I’m not going to send them an invoice. But if people want me to write a weekly column for free...the answer’s “no”. My mortgage company doesn’t accept exposure as payment.
What are the 5 technologies you could not do without in your business today?
Let’s start with WordPress. I run all three sites via WordPress which is a content-management systems that allows me to easily publish content.
I just picked a Macbook Pro. I’m falling in love again with it. It makes things very simple.
I’m a big fan of HootSuite. It allows me to take social networks and compartmentalize them. I can break up thousands of tweets from Twitter’s main page and break them up into categories.
I’m more and more using Google Documents. I’m only using the basic version. I was working with a friend of mine in real-time and we were both editing the document at the same time. He lives in Iowa and I live in NJ. That’s pretty cool.
I’m a big believer in mobility. I have my cellphone tied to my hips. In today’s age, if I go to the gym for a few hours, I want to be able to check voicemail or email or a web page.
Leaders are readers. Jim Rohn said that. I just quote him. Books like yours help make that a reality. You're a leader. What are you reading?
I just finished The World is Flat by Thomas Friedman.
Smarter, Faster, Cheaper: Non-Boring, Fluff-Free Strategies for Marketing and Promoting Your Business just arrived.
Nicholas Carr’s books are great. I just read The Shallows, what the internet is doing to our brain.
Bo Burlingham’s book: Small Giants. Companies who choose to be great, instead of big.
What’s a fiction book you recently read?
I’m a golfer. Missing Links by Rick Reilly was hysterical. That was a whole lot of fun.
What's your final thoughts for our audience of small biz listeners?
It’s just better to be small. I would argue that it is easier for a small company to act big, than a big company to act small.
Again, not everyone wants the stresses of running a small business. It is definitely not as easy as sitting back and collecting your check each week. It’s a challenge.
But it is incredibly rewarding. It no longer needs to be just a dream. You no longer need $50 or $100,000 to start up a business. You can start one with very little money. You can get a very powerful website, a strong social media presence.
You need a good idea, a good attitude, a stubborn determination. If you’re met with adversity you can overcome it.
Where can we follow you on the web?
The site for the book is The New Small. And the Twitter handle is the same.
My main Twitter account is Phil Simon and my main site is Phil Simon Systems.
Where are you speaking where we can come see you?
I keep my schedule posted on my website. Right now I’m doing a lot of radio shows to make sure the book gets proper publicity.
There’s a fairly good chance I’ll be keynoting in Toronto in the spring.
Next guest: Stefan Swanepoel, author of Surviving Your Serengeti: 7 Skills to Master Business and Life.