Apparently I “like” OfficeMax, Folgers, JCPenney, Kraft and several other big-name brands. At least, according to Facebook I do. Except, it’s wrong. It’s not that I dislike these brands, really (well except maybe Folgers – I mean, yuck). But the truth is, I’m just indifferent to them. Why did I like them? I don’t recall. I probably [...]
Guest author Mike McDerment is co-founder and CEO of cloud-based small business accounting provider FreshBooks.
Late last year Google Apps for Business eliminated its free version (see Google Dares Businesses To Switch To Microsoft Office). You might think this is a bad thing for small business owners. Everything free is good, right?
Wrong.
There are big downsides to getting things for free that are poorly understood and rarely considered, and upsides to paying for the things that really matter — especially for small businesses.
First, let’s look at some downsides to free:
1. Free things are never really free. When we don’t fork over dollars for products or services, we think of them as free. But we always give up something. When it comes to online services, that something is usually personal data or content you’ve created — think Facebook and Instagram, whose privacy policies obscure the line between what you own vs. what they own. For consumers, that might be an acceptable bargain. But for small businesses that trade may be unacceptable.
2. Free services don’t serve you. Free services can’t provide great customer service. You know this to be true if you’ve ever sent an email to a free service to get help. Imagine relying on one of those free services to run your business!. What happens when you need help, and you need it now?
3. Free services for small businesses don’t last. Free services for small businesses come and go. Google Apps used to be free, now it isn’t. Free services don’t last for the small businesses because the market is so challenging to reach and serve. My guess is that understanding the market challenges is the key to why Google Apps for Business going paid is a good thing for small businesses.
According to the census bureau, there are 30 million small businesses in the U.S. That sounds like a massive market, but it’s less than a tenth of the U.S. population of 311 million. If you’re going to try to reach small businesses with mass advertising, fewer than 1 in 10 audience members will likely be a small business owner, making the process woefully inefficient.
Worse, unlike enterprise customers, small business owners are incredibly hard to find — literally. With the rise of telecommuting and home-based businesses, a growing percentage of small businesses have no “front door” for salespeople to find. So it costs even more to reach them.
Third, when you do find them, small business owners are demanding. They are busy doing real work, so they expect their “stuff to work” too. They also tend to have heavier usage patterns than consumers and when they need help, they need it right away.
Finally. compared to enterprises, small businesses are much more likely go out of business.
But why should small businesses care about their vendors’ problems? Why is it a good thing for them that Google Apps For Business went paid? How are small businesses going to benefit by paying for something they used to get for free?
The answer: innovation and the arrival of services tailored to meet their needs. Just think of how many things small business owners run on Word and Excel and you get a sense of how under-served this market really is.
Reaching the small business market is an expensive and risky proposition. As we’ve just seen with Google, “free” just doesn’t work in a market full of clients who use your service heavily while demanding great customer support. Great service people cost money. Need proof? Google now provides 24/7 phone support for its paying business customers.
Google Apps for Business going paid makes serving the small business market more attractive – for everyone. As long as all Google Apps were free, smart entrepreneurs and competitors were inclined to avoid investing in innovation for small businesses for fear Google could step in and wipe them out with a free service.
In the dot com era, companies were terrified to do anything that Microsoft might be interested in, and venture capitalists would stop a hundred businesses before they could start with one simple question: “Why won’t Microsoft do this?”
Similarly Google has scared people out of doing things, because thanks to the significant advantage created by its search business, the company can afford to lose money on other activities, starving the competition and limiting innovation.
Fact is, Google can always return to the free model, but it’s a good signal that it has started to charge for things. Wall Street will be happy, and small business owners should be too. That’s because I expect Google’s paid model to give entrepreneurs the confidence to step in and start innovating more for the small-business market.
This innovation will encourage services tailored for the long-underserved small businesses of the world. Sure, those services won’t be free, but they will be affordable, just as Google Apps remains affordable at $50/year.
Just as important, these new services won’t come with all the downsides of “free.” In exchange for services they need, businesses will trade dollars, not their data or their content.
I’m hoping this signals the start of a new era, one where for the first time ever, competition, innovation and choice are healthy in the small business market.
The good news is that it won’t just be businesses that benefit. We will all benefit because small businesses are the engine that drives the U.S. economy – when we give them the tools they need to succeed, we fuel that engine to take us all into a brighter, richer future.
Image courtesy of Shutterstock.
The blame game surrounding the limited availability of the Nexus 4 has reached ridiculous levels. Google originally blamed LG for component shortages, then LG fired back that production was continuing on as planned. They also debunked rumors that a new…
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Is Google about to make a move to control the distribution of music videos? Well, maybe.
If YouTube and its corporate owner Google take a stake in music video distributor Vevo, as has been widely reported in the last 24 hours, it would be yet ano…
As Facebook moves closer to Microsoft, Bing is becoming more like Facebook.
Microsoft’s search engine gained “five times more content” on Thursday, the company said, adding much more Facebook content to the “sidebar” on the right-hand side of Bing’s organic search results. Now, Facebook status updates, shared links, comments and photos will all be shown when a user performs a search, provided the user is logged in to Facebook.
Previously, Bing allowed users to ask their Facebook friends for responses to a query, such as the best restaurants in San Francisco. Now, those results will appear automatically, provided that a user’s friend network has actually discussed the topic. Photos will pop out, and queries such as “Notre Dame” will generate facts and figures on the cathedral, the university and your friends’ opinions as to whether or not Heisman Trophy candidate Manti Te’o's girlfriend ever existed.
“We think matching your search intent with relevant people and experts is a profound change to the way we use search, and can make it more useful than ever before,” the Bing Team wrote in a blog post. “We began this work last June, and now with our latest update, we’re expanding beyond ‘Likes,’ photos and profile information to include status updates, shared links and comments – all in an effort to help you get more done.
Bing is busy getting closer to Facebook this week. Bing’s new Facebook integration is significant but not quite what Facebook promised with the introduction of Graph Search earlier this week. There, Facebook promised to eventually search its entire corpus of photos, posts, and interests over its more than one billion members. (And if Facebook Graph Search doesn’t return any results, it defaults to Bing as a backup.)
For now, however, Graph Search searches are restricted in many cases to friends, apparently as much for reasons of privacy as much as voyeurism. For example, one can search for “photos of women taken at beaches” and only photos taken by friends are shown. But if one searches for “photos by women taken at beaches,” many more photos, taken by friends of friends, show up.
Searching for “photos of women taken at beaches” didn’t produce any social search results at all on Bing, although one Facebook friend had taken several photos of friends at a recent beach wedding that he had uploaded to Facebook. (Photos or other content posted by “friends of friends” doesn’t seem to appear.) Oddly enough, four out of the four recommended videos Bing suggested were “adult only,” and blurred out by Bing’s SafeSearch feature.
Public information from Quora, Twitter and other social feeds will still appear in the sidebar as well, a Microsoft spokesman said in an email. Still, Facebook is given pride of place, and the only mention I saw of “Notre Dame” on another social network in my sidebar was Quora – and, as a Notre Dame alum, my Twitter feed has been burning up over the past few days.
While photos do appear on Bing’s sidebar, the best place to discover photos on Facebook is still… Facebook. A friend of mine recently returned from a trip to New Zealand, but a search on Bing highlighted only one photo – one of his earliest. Another friend’s recent trip to Hawaii wasn’t mentioned at all when I search for “Hawaii,” although other friends’ posts, dating back to March, appeared.
Granted, those posts could have been more heavily weighted somehow within the Bing search algorithm, but their omission makes me doubt Bing’s ability to find relevant photos. One question I had following the launch of Facebook Graph Search was how much knowledge or benefit Microsoft would be able to derive. I’m seeing some, but not as much as I had hoped for.
What I’ve said before still probably holds true, however: The benefits you’ll see with the enhanced Bing social search depend as much as the content your friends produce – how timely, relevant and tagged it is – versus Bing’s own search capabilities.
Making a living on YouTube is a tough business. It takes real entrepreneurial spirit. Most YouTubers make money wherever they can: from the ads that run on their mostly homemade videos and merchandise (like bobble head dolls).
The big news is that few of the more intrepid YouTubers are making real money by taking their acts beyond of the virtual world and onto physical stages. And they’re actually selling out big concert halls.
The latest case in point: John and Hank Green of the Vlog Brothers’ sold-out show at Carnegie Hall last Tuesday night. It drew the kind of crowd that many an indie band would blow up a drummer for. So much so that it caught the attention of the The New York Times.
Let’s hope the Greens possess an “any publicity is good publicity” attitude. The Times described their Carnegie Hall performance as “a goofy variety show” with the “the polish of a really good high school talent night.” (The show, which featured live readings, skits and a few musical numbers, can be viewed here.)
John and Hank Green are by no means the first YouTube act to find an audience in the real world. A little more than a year ago, YTF, YouTubers Ryan Higa and six friends – including one American Idol contestant – sold out a concert hall in Hawaii. Higa and company, regularly creating some of YouTube’s most popular videos, were given star treatment complete with fawning interviews in the local press, and a “YTF day” declared by the state’s governor in honor of the group’s show.
Early last year, seven YouTubers including four musicians and popular Web skit writers MeekaKitty, Nanalew and LiveLavaLive, went on a full-blown tour of the United States. I saw their variety show at House of Blues in Chicago, along with a couple hundred or so screaming teens and 20-somethings. Their parents may not get it, but they did.
Photo courtesy of YouTube.
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