Now is the era of small business?

Jason Fried says:

When you think small business, think 1-10 people not 50-100. There’s an endless supply of 1-10 person companies. Who cares about the Fortune 500? It’s time to care about the Fortune 5,000,000. Forget the enterprise market. Forget the mid-sized company market. Build for the smallest of small companies and you’ll find a thirsty, neglected market waiting for you.

Seth Godin says:

Today, little companies often make more money than big companies…Small is the new big because small gives you the flexibility to change the business model when your competition changes theirs.

If you are small business, how can you compete with the big guys? Here are <a href=”<a href=”16 tips from Tom Peters.

1. Niche-aimed
2. Never attack the monsters head on!
3. Dramatically different
4. Compete on value/experience/intimacy, not price
5. Emotional bond with Clients, Vendors
6. Hands-on, emotional leadership
7. A community star
8. An incredible experience, from the first to last moment — and then in the follow-up!
9. Design
10. Employer of choice
11. Sophisticated use of information technology
12. Web-power
13. Innovative
14. Brand-Lovemark Maniacs
15. Focus on women-as-clients
16. Excellence

17 mistakes startups make

Reading John Osher’s list, I guess success is not only doing the right things but also not doing the wrong things.

1. Failing to spend enough time researching the business idea to see if it’s viable.
2. Miscalculating market size, timing, ease of entry and potential market share.
3. Underestimating financial requirements and timing.
4. Overprojectings sales volume and timing.
5. Making cost projections that are too low.
6. Hiring too many people and spending too much on offices and facilities.
7. Lacking a contingency plan for shortfall in expectations.
8. Bringing in unnecessary partners.
9. Hiring for convenience rather than skill requirements.
10. Neglecting to manage the entire company as a whole.
11. Accepting that it’s “not possible” too easily rather than finding a way.
12. Focusing too much on sales volume and company size rather than profit.
13. Seeking confirmations of your actions rather than seeking the truth.
14. Lacking simplicity in your vision.
15. Lacking clarity of your long-term aim and business purpose.
16. Lacking focus and identity.
17. Lacking an exit strategy.

It is easy to say “OK, since I have the list I will just go through it everyday and make sure I don’t commit these mistakes.” But it’s only in the future we’ll know if we have committed the mistake or not. Unfortunately, all decisions must be made at the present.

For example, it is logical to research the viability of a business idea. But when do you stop exploring and start doing it? How would you know if you have done enough research? What if data is against your idea but something deep inside tells you otherwise?

How about these guys at Fog Creek who started not with a viable business idea but a desire to create a software company where they would want to work.

I once created a business plan as an intellectual exercise. At first, I was excited because the market is big (at least in the Philippines); that is because I divided the market only into two. Although I’m looking at the smaller one, its size is still big. After several reviews, I realized that I am not being realistic. I further divided my market using locations and perceptions. My market is getting smaller but it is getting clearer the customers I need to target.

In one article (forgot what) the author wrote that market leader owns 90% of the market while no. 2 owns 90% percent of what is left. So I thought 20% is realistic but according to John, “most products sell way less than 1 percent.”

About John Osher:

John Osher graduated from Boston University with a degree in Psychology in 1971 after struggling through seven years of undergraduate work at three different universities. In fact, he never went to class on a sunny day. He has never been hired to work for any company and has never been elected or appointed to any office. He has simply short circuited the system by starting all of his own businesses and appointing himself as President since beginning his first company at the age of five. Now that he is older, he appoints himself Chairman.

SchoolPad: a very short intro

Several unfounded companies later, I still look for ways to realize my dream. Last March, I started working on a software for building websites. The product name is SchoolPad and is targeted for primary and secondary schools. So how did I decide to build SchoolPad? Well, not too long ago I received an email from a Filipino looking for a list of school websites. He is working in Australia and would like to know the options for his son. I was able to give him less than 10 sites because that’s all I could find. So I thought, build a tool that would make it easy for school to launch their website and package it so that they don’t need to worry about domains, hosting, and other geeky stuff. Thus, SchoolPad was born and on August 1 it will be ready for free trials (I hope).

The businesses I never started

In 1999, a friend recommended me to a manufacturing company in need of an inventory software. I got the project. I registered “AtWork Software” so I could issue receipts and get paid. The manufaturing company was AtWork’s 1st and last customer. So far, that was the closest I was in running my own software company.

Around middle of 2000, my friend Dennis Posadas asked me to explore WAP technology. It is the technology that allows Internet browsing over mobile phones. We voraciously read a lot of research materials and my two friends even attended the Philippine’s 1st WAP conference. Still, no company was founded.

In 2003, some friends and I thought of supplying bingo cards and equipments to local operators. I developed a Linux-based program (using Python ang Qt) for running bingo games. I was never interested in bingo but I had to learn it so I could build the program. I even talked to several printing companies to understand how bingo cards are manufactured and why we have to import these from Canada. Apparently, it was too expensive to print bingo cards here because of the variation of the card numbers and design. Again, no company was born.

Last summer of 2005, I submitted a business plan to the CEO of a successful local ISV. I and my friends from the WAP days had several meetings and number crunching sessions with the company’s marketing and financial managers. We even had sessions with IBM consultants to brief us on the technology that we will use to build the product. But after 2 months, we decided we can no longer wait for a go/no-go from the CEO.

What is the MicroISV Notebook?

It is no secret even to my boss that I want to start my own software company. The question I always ask myself (and our HR asked of me once) is when. For the past years, I’ve been involved in several talks on starting a software company. The closest I’ve been to a software business was in 1999 where I registered a business name and printed receipts so I could get paid. The rest was pure round table (sometimes square) discussions.

Thinking and dreaming about it is a waste of time. That’s why I have resolved to become a software vendor and launch my first product this year. I know it is of no great feat and some of you have successfully did it but, there’s no rule stopping a wannabe like me to try it, right?

So now what does it have to do with the blog name? To borrow from Eric Sink’s essay, I am a MicroISV — a software company made up of exactly one person. The term ‘MicroISV’ has actually evolved to include several people but still a very small group.

Of course, it is easier said than done. I still have a day job and given my financial standing, it would be foolish to quit now. That means, I can only develop the product during nights and weekends.

Another constraint I have to deal with is I don’t have extra money to deal with business expenses. Unlike other people who can ask daddy for help, my only source of money is the take home pay, which is just enough to cover family expenses and debt payments. Unless I get an additinal source of money soon, I have to use my credit cards or borrow from friends and relatives.

Aside from the time and money constraints (that are always here anyway) there is also the “being alone” I have to deal with. Well, I do have friends I can disturb once in a while but for the most part, it will be all by myself. At 2 am, I won’t have anybody to bounce ideas with. Even if my wife is awake, she wouldn’t be interested to hear my ramblings.

The MicroISV blog coming soon

In a few days, this blog will have a new name and domain.

First, I would like to thank Angelo and Abe for the free domains and hosting. This is part of the campaign to encourage Filipinos to use “com.ph” domains.

The change also reflects something I have been longing to do — start a small software business and blog the adventure. By doing so, I hope other Filipinos can learn from my experience and be inspired to start their own business; especially my generation who are more interested in migrating abroad. It would be a lie if I tell you it didn’t crossed my mind but for now, I am betting my future here in the Philippines.

What will happen to gaboogle.com? I like this name. It sounds like Google without really trying hard. That’s why I will be registering this for my business name and keep the domain for my small business website.

Is there a Web 2.0 pill?

Many programmers, designers, and bloggers mention “web 2.0″ nowadays. There is even a Filipino online community promoting this and I regularly receive emails where people mention they are working on a “web 2.0 app”, incorporated a “web 2.0 feature” or a “web 2.0 design”.

Unfortunately for me, I still don’t get it and my concern is that people drop the “web 2.0″ as if it is enough to describe what they are doing.

Are people suppose to buy your product if it has a “web 2.0″ in it? Are people suppose to say, “I want that software” if you tell us you have incorporated a “web 2.0″ design?

If you can’t tell people what problem you are solving, and why your software solves the problem, your “web 2.0″ app will go to the trash bin.

And one more thing – people don’t buy folksonomy, mashup, and meta.

Smart reaches out to bloggers. But not to customers?

Smart Philippines has launched a “Smart Bro Big Bro” campaign to counter the negative publicity on their wireless broadband service. Smart Bro is not new; it is just the re-branded Smart Wifi service – which didn’t live up to its broadband promise.

The publicity campaign wants to get feedback on the re-branded service. Do they need another round of feedback? What did they do with the tons of customer complains filed at the customer service department?

If you’re a customer and you get delayed in paying your cellphone bill, Smart will disconnect you. OK, the term they use is “redirect” but it’s the same – you can’t call or send an SMS.

If you’re a customer and you don’t get the service you paid for, Smart ignores you. What is Smart going to do with their subscribers who didn’t get the connection availability and speed they paid for?

With all the complains on their Smart Wifi service, I guess they have decided that the “smart” thing to do is change the name, launch a publicity campaign, and invited famous Filipino bloggers to write about their latest publicity stunts. Sorry Yuga, but this looks like another TV commercial. What’s next? Kris Aquino playing Ragnarok with Boy Abunda?

What happened to “eat your own dog food” or “fly your own airplane”? Why not ask the CEO, senior executives, managers, and employees to try the Smart Wifi service. Let them try it at home with their kids, relatives, neighbors and see for themselves if it sucks or not. Or they won’t because they know the service sucks or they can’t because they are already Globe broadband subscribers.

Design for stupid people?

Angelo makes an interesting link between usability and stupidity in his latest post at ForeverGeek.

It makes me wonder why organizations put a great deal of effort to produce a manual rather than make the design simple and usable so that there’s no need for the manual in the first place. Not all documents are useless though. Sometimes, we need a reference manual of error codes.

From experience, writing manuals gives you a great opportunity to “feel” whether the product (or software) is usable or not. If it feels tiring just to describe a single operation, then there must be something wrong with the product. Of course, I am assuming here that you deeply care about the usability of your product. Otherwise, you may as well just copy-and-paste from draft specifications.

The problem is, most of the time, a manual is the last item on a checklist of things to do before the product is released. During the later stage of product development, there is very little incentive to think about whether a manual is needed or not. There is tremendous pressure to get the product out and the manual is blocking the way. So what are you going to do? Just released the frickin’ manual.

Now, what if instead of treating a manual as a to-do item, make it a goal not to release a manual and ask everybody “What if we create a product so simple and so easy to use that we don’t need to produce a manual?”

Enough with the manuals. The truth is I am just too lazy to write one .

Angelo talks about another usability point – “Think of making the stupid people happy.”

I don’t agree with the use of “stupid” to describe your target users or thinking about stupid people during design. In the first place, the “stupid user” is the term used by arrogant engineers who can’t accept that their design is bad. It is easier for them to blame other people for not having the “intellect” to figure out things than accepting the truth that they designed the product only to satisfy their intellectual lust.

It is not about stupidity. It is about the gap between what you know, what your users know, and what you think your users know. Of course, making the gap as small as possible is not easy. As Angelo puts it, “it takes more effort to design with usability in mind than just putting in all the bells and whistles in one place.”

Use a human voice in your autoresponders

Autoresponders are handled by computers but your message does not need to sound like a disk drive writing to a defective floppy disk. One time, I received this email as a reply for my job application. I omitted the company name for my own protection

You have reached the COMPANY’s e-mail address for external applicants. We will review your application along with others that we received. You will be notified only if you are shortlisted for further consideration.

Please do not reply to this computer-generated message. It is also not necessary for you to telephone, fax, or e-mail us about your application status.

We thank you for your interest in the COMPANY.

Human Resources Division
COMPANY

The funny thing about this email is it does not even have a subject. If you are replying to an email, you would include the subject, wouldn’t you?

The email message sounds like the person who wrote it is not happy receiving tons of email. With some thought, you can have an autoresponder message that has human voice. How about writing it this way:

Greetings!

Thank you for your interest in our company. This is an automated response – just to confirm that I have received your message so please do not reply. We are receiving tons of email right now and it may take time before I could answer you personally.

Regards,

Greg Moreno
HRD Staff

Even better is you give a commitment when you will respond. It gives an impression that the company is serious in handling email inquiries.

We will get back to you within 24 hours.

Of course, if you said, you have to do it.