A9 and Small Businesses

[via Andy Beal] Clickz has an interview with Amazon.com’s Barnaby Dorfman, VP of A9.

We’re encouraging businesses to provide information to us. The yellow pages industry has a problem of data becoming stale. We’ve created an interface that allows businesses to visit the site and update that information directly on the site. In addition to making changes, they can add a link to their site. Businesses can also upload their own images, pictures of the menu, marketing collateral, whatever they want.

With the click-to-call service, consumers can either talk using their PC or we can do a third party call. It’s all about reducing the friction.

We need a similar service for India.

Small Business Branding Manifesto

[via Doc Searls] Small Business Branding Blog suggests:

1. Forget Customers and Prospects. Think Partners.
2. Forget Marketing. Feed Your Network.
2a. Forget Marketing. Think Conversations.
3. Forget Control. It’s an Illusion.
4. Forget Selling. Connect.
5. Forget Logos. Think Gut Feelings.
6. Forget “Think Big.” Think Small.
7. Forget “Think Big” (again). Think Be/Do Me.
8. Forget “Next Big Thing.” Think Just This Thing.
9. Forget Professionalism. Think Humanism.

Google and Small Businesses

CBS News had a segment on Google recently. An excerpt from the transcript:

Eric Schmidt, Googles 49-year-old CEO who was hired in 2001 to be the resident grown-up, says that the pool of potential advertisers is almost limitless: “Theres a lot of evidence that the companies of which Google is a member are enabling a new kind of commerce, between very small communities, people who can find each other, for whom the traditional advertising mechanisms, whether its television advertising or radio, do not serve.

“An example: a friend of mine named Peter puts his credit card in and he give us $50 [for a sponsored link]. And his wife knits a particular kind of rug. I said, ‘Call me back, give me an update.’ So Peter calls back and says, ‘Were ecstatic. For $50, we got all these customers.’ And I said, ‘Well, how many did you get?’ And he said 100. And I thought, ‘Wow, you know, thats great. What a wonderful outcome.’ And he said, ‘Theres a problem…my wife does one rug per year.’ So thats all the revenue were ever gonna get from Peter.”

But there are millions of Peters out there, and billions in potential ad revenue. The business world is just beginning to grasp the potential.

India’s SME Market

Business Standard writes:

Access Market International (AMI), the US-based IT research agency, reckons that the size of the Indian SME market will rise sharply from $ 6.33 billion (Rs 28,504 crore) in 2003 to over $ 10.45 billion (Rs 47,056 crore) in 2005.

Dhawan points out that SMEs already account for over 45 per cent of the total IT revenues in the country. Whats more, the segment is growing faster than the overall IT industry by 20-25 per cent this year versus the average growth rate in the IT market of 17 per cent. More importantly, India has some 18 lakh SMEs and only the surface has been scratched.

An AMI study of SMEs shows that only three per cent of them in India have a local area network at their offices or factories, just 15 per cent have a internet connection, four per cent have broadband and a mere one per cent have their own website. Notes AMI analyst Deepinder Sahni: This clearly shows what a large untapped market is waiting for everyone to leverage.

Encouragingly for IT companies, Sahnis market research suggests that most SMEs are increasingly realising that investing in IT can improve bottomlines. The AMI study found that over the next 12 to 18 months, 17 per cent of the SMEs AMI contacted want a data back up and recovery system, 18 per cent want to interconnect their offices, and about 21 per cent want instant messaging systems to be installed in their offices.

To be sure, IT companies realise that catering to SMEs is an entirely different ball game. Unlike the big boys, they are extremely sensitive to price, demand quick implementation, want continuous support as they dont have IT departments and often are not located in metropolitan cities.

SME IT Challenges

InfoWorld writes: “Four big technology challenges face IT managers who work at small to medium-size businesses. And guess what? The challenges look a lot like the ones confronting large organizations: VoIP, SANs, Gigabit Ethernet, and security. Few IT shops, big or small, would be crazy enough to tackle all four issues at once. Together, all this new technology may have reached the critical mass necessary for SMBs to think seriously about a network overhaul.”

HP’s SME Services

InfoWorld writes about HP’s plans to make “commPuting” a utility:

HP will begin selling managed IT and communications services next year to small and medium-size businesses in three continents, offering Internet access, servers, voice over Internet Protocol (VOIP) and help desk calls at fixed monthly rates, an HP official said.

The service, called HP Ready Office, has been in pilot in France since May. It will be rolled out there in the first half of next year, in partnership with France Telecom SA, which provides the communications services, and Alcatel SA, which provides IP telephony equipment.

HP is betting that smaller businesses — those with up to about 1,000 employees — would prefer to “lease” servers and IP phones for a fixed fee, and have their equipment managed remotely by an experienced IT provider. Mateo cited having a single point of contact for all support calls as a key benefit. In France, France Telecom will receive the calls, with the IT queries handled by HP behind the scenes.

The services will be offered in a variety of packages. A help desk component is 24.90 ($20.26) per employee per month. It includes support calls for desktop applications, as well as remote management and diagnostics of desktop PCs, including non-HP systems.

For 48.50 per month, customers receive a HP Proliant Server with an 80GB hard drive running Microsoft (Profile, Products, Articles) Corp.’s Windows Small Business Server 2003. The price includes the hardware itself and remote management services. Customers must sign up for a minimum of three years. A similar server with two hard drives and RAID is 62 per month, Mateo said.

The VOIP component is 17 per line per month, with services hosted by France Telecom on Alcatel’s PBX equipment. A DSL (Digital Subscriber Line) connection from France Telecom’s Olane business is 59 per month.

India’s Economy

WSJ has an article by Arvind Panagariya, the Jagdish Bhagwati Professor of Indian Political Economy at Columbia:

Four months into UPA rule, prospects are less rosy. GDP growth, which had touched 8% in 2003-04, is set to decline to 6% this year. Inflation, at 3.4% in 2002-03 and 5.4% in 2003-04, has edged up to 7.5%. Until April, everyone was betting on the appreciation of the rupee. But it has depreciated more than 6% against the dollar since then, despite the sale of several billion dollars by the central bank. The stock index Sensex has declined 10% from its April peak.

Some of this results from events beyond Dr. Singh’s control: The lower growth-rate projections are largely attributable to the expected decline in agricultural growth due to bad weather; and inflation has been fed by increased world prices of oil and metals, especially steel. But some of the scaling down of expectations is due to UPA policy. Pessimists are justifiably alarmed over two developments. First, having embraced the view that its election success owes much to the neglect of India’s rural poor in the past decade, the UPA plans to increase expenditure substantially in agriculture, education and health. Second, the intensification of India’s economic reforms is in doubt. The UPA has abandoned the privatization program that had finally gained some momentum under the BJP government and has ruled out labor-market reforms.

There remains insufficient recognition of the need for clean-up in other areas if India is to achieve the announced target of 7% to 8% annual growth rate over the next five years. The growth rate in industry needs to improve: Contrary to the experience in other countries, its share in the GDP has failed to grow even as the share of agriculture has declined. Despite an immense pool of unskilled labor and low wages, unskilled-labor-intensive industry has performed relatively poorly in India. India’s export growth has accelerated in response to the opening up during the ’90s but the fastest growing exports have been either capital-intensive (such as auto parts and machinery) or skilled-labor-intensive (pharmaceuticals and software). So industrial expansion has failed to create well-paying jobs for the unskilled and to reduce pressure on the farms.

The policy obstacles behind this sorry situation are widely known. First, a large number of the unskilled-labor-intensive products are reserved for small-scale enterprises. This has handicapped the growth of modern enterprises that can compete effectively abroad. It has also affected the inward flow of direct investment: Tyco will not produce toys in India if toy manufacturing is restricted to small enterprises. Second, under the labor laws, firms with 100-plus workers are not permitted to lay off workers under any circumstances, deterring larger firms from manufacturing even products that are free from the small-scale-industries reservations.

By turning a blind eye to these ills, the UPA invites economic failure. Dr. Singh is too good an economist and too accomplished a reformer not to appreciate the need for caution on expenditure and boldness on reform. The question is whether politics will force him into missteps. India’s friends can only hope he will prevail.

Internet Opps for Small Businesses

Adam Hanft writes:

The entrepreneurial edge. We’ve seen it in action and we know what it represents. The ability to respond quickly to opportunity. To see trends before they leap into front page fodder. To seize and run with new technology before large and lumbering competitors wake up and smell the skim decaf latte.

It’s an instinct and behavior that’s true most of the time. But puzzlingly, I don’t see it happening in the hot and buzzy area of Internet marketing –specifically, as it relates to two distinct areas: search marketing and rich media.

Search marketing, of course, is the practice of using keywords and other terms to drive Web surfers and Web seekers to your site. It’s the phenomenon behind Google’s monumental market cap and the holy grail of one-to-one communication: Someone raises their hand and says, “I am interested in learning more about this subject, or this product category, or this service area.” No more qualified, valuable prospect exists on the face of this ozone-depleted, fossil-fuel dependent earth.

The second online marketing opportunity that entrepreneurs need to grab is rich media. While traditional banners are declining in use as an advertising vehicle — they’re boring and uninspiring — rich media is booming. “Rich media” describes a range of more sophisticated and involved online advertising formats – messages enhanced by sound and motion, by interactivity, by pull-down menus, or other multimedia options. Sometimes, rich media units float or “take over” a page, as with the industry-leading, innovative messages made available from PointRoll.

Small-Scale Industry Clusters in India

UNIDO has a series of papers on the SSI clusters in India from studiesthey did in the 1990s. “With a contribution of 40% to the country’s industrial output and 35% to direct exports, the Small-Scale Industry (SSI) sector has achieved significant milestones for the industrial development of India. Within the SSI sector, an important role is played by the numerous clusters that have been in existence for decades and sometimes even for centuries. According to a UNIDO survey of Indian SSI clusters undertaken in 1996, there are 350 SSI clusters and approximately 2000 rural and artisan based clusters in India. It is estimated that these clusters contribute 60% of the manufactured exports from India…Despite such achievements, the majority of the Indian SSI clusters share significant constraints like technological obsolescence, relatively poor product quality, information deficiencies, poor market linkages and inadequate management systems.”

I wonder if there are any more recent studies.

We need the eqivalent of Tech 7-11s in these SSI neighbourhoods to take IT to them – they are a large, untapped market offering great potential, but also hard to reach and convince.