
Why Small Businesses Aren’t Spending More on Tech - wgruener
https://www.comptia.org/about-us/newsroom/blog/comptia-blog/2017/01/19/how-to-get-small-businesses-more-excited-about-new-tech
======
joemi
All the small businesses I've worked at have another huge factor to consider,
when it comes to new tech: Will the tech be supported long enough for it to be
worth dealing with?

Anecdotal example: A few years ago, my workplace at the time (a bookstore near
a university in NYC) decided to try that payment method Square used to have
that let you check in to Square when you enter a store and then just "pay with
your face" or whatever. Sounded neat, I knew some folks who loved to pay for
things that way in NYC at coffee shops and such, and the Square rep told us
about all the other places near us that were adopting this. So we figured what
the hell, jumped on in, got some iPad bundles from Square to use for this, and
I was tasked with setting it up. Just a few weeks (!) after we had set it up,
Square discontinued that service. Needless to say, ever since then, that
bookstore has been very apprehensive about "new tech". Why bother investing
time and effort into something new if it could vanish at any moment?

~~~
LoSboccacc
Exactly this. Big names want big money which small businnes don't have and
small businnes already got burned badly by fresh internet startups last time
around.

Also, few bigs target small business because, let's be honest, they're a pain
to work with at scale, each one of them brings variations to the base product
flavor but no budget to implement them.

Hence, loads of them run off custom excel sheets.

I once proposed to have a sort of web excel with security controls and a way
to let authenticated guests to work on a subset of cells as a way to move
small businness online leaving control to them of their process implementation
but couldn't find a sponsor.

~~~
omouse
_few bigs target small business because, let 's be honest, they're a pain to
work with at scale_

It's not that difficult, it's just incentivized in our not-so-free market. Big
companies can afford lawyers and lobbyists and they get all the best tax
breaks and subsidies. Small companies, not so much.

 _each one of them brings variations to the base product flavor but no budget
to implement them_

Yep, because the base product is designed for the large clients.

It's all incentives to target big companies. Why do you need permissions and
user account management in your software? Because you're dealing with 20+
people and you may not know everyone in your company and if they can be
trusted. Why do you have a base product that requires at least 10,000 database
items in it to be useful? Because the big companies have that many items and
they've got a monopoly or oligopoly on the market.

 _I once proposed to have a sort of web excel with security controls and a way
to let authenticated guests to work on a subset of cells as a way to move
small businness online leaving control to them of their process implementation
but couldn 't find a sponsor._

This is actually what _should_ and _would_ happen in a free market. The
majority of companies are not very large; most of them have a bit of extra
cash to invest in a tool like that. There is a definite market for it. But why
isn't that market pursued? All of the above incentives mentioned above.

~~~
quanticle
_Big companies can afford lawyers and lobbyists and they get all the best tax
breaks and subsidies. Small companies, not so much._

What does that have to do with business-to-business transactions? Microsoft
doesn't care about your subsidies. Oracle doesn't care about your tax breaks.
All they care about is how many users you can bring or how many zeroes you can
put on the contract.

 _This is actually what should and would happen in a free market._

This sort of coordination problem is actually a classic failure of free
markets (it was even covered in my Economics 101 course). Coase's Theorem only
applies when transaction and negotiation costs are zero. In any real world
scenario where transaction costs are nonzero, you'll see failures like this.

~~~
lkrubner
"All they care about is how many users you can bring or how many zeroes you
can put on the contract."

Which is influenced by the subsidies you get. Some industries more than
others. The extreme case is the agricultural industry in the USA. Many of the
big wheat firms would not exist without the vast subsidies offered by the
government. For those firms, Oracle or Microsoft are only talking to you
because you've gotten money from the government.

~~~
lkrubner
Why was this downvoted? It's a straightforward statement of the facts.

------
mamcx
This is where FoxPro/dbase was the solution. I work with that for some years
and none on the current tech match that.

Fox was the best part of Acces (the GUI builder, but way better) + a capable
embedded database engine + way better language than anything else for
businesses apps.

This could sound weird, but even python _is to hard_ in contrast with fox.
Also, being more database focused, interactive and with decent GUI abilities
was a match in heaven.

Fox is still pervasive in my country in a lot of simple apps/POS systems. Is
the perfect match (you can even provide custom report, form building, etc to
_end user_ using _exactly the same tools that fox give us_ ). Not was uncommon
that some folks at that small companies learn a bit of fox to customize their
apps.

My current dream is try to build something like this, and salivate what will
happens if also put spreadsheet there with true relational support. Is a pipe
dream, because this require a dedicated team and funding, and this kind of
"unsexy" tool not fly anywhere.

~~~
pjungwir
This is how I think of FileMaker Pro. It seems like a great "next step" past
Excel for businesses that don't have budget/time for custom programming.

Also, what about SharePoint? I haven't used it, but my impression is that this
is what it's for. Is that mistaken?

~~~
maxxxxx
Stay away from SharePoint. It sucks in every dimension you may want to use it.

Thumbs up for FileMaker though.

------
mmonihan
One thing a lot of us underestimate is the flexibility of things like
spreadsheets, and believe it or not, paper.

The resolution of an A4 piece of paper is a crisp 3508px x 2480px. For
comparison, my MacBook Air is about a third of that at 1440px x 900px.

And, the processes companies have developed over years are tailored to that
medium. While tech has gotten drastically cheaper in recent years, it still
needs to get cheaper still for most businesses.

I spoke about this recently at NYC.rb.
[https://news.ycombinator.com/item?id=13446715](https://news.ycombinator.com/item?id=13446715)

~~~
TeMPOraL
> _The resolution of an A4 piece of paper is a crisp 3508px x 2480px. For
> comparison, my MacBook Air is about a third of that at 1440px x 900px._

Not to mention how infinitely more convenient paper is to handle than laptops,
and while I can easily spread 10 A4 pages in front of me to look at them
simultaneously, I doubt my company will buy me 9 more computers to do the
equivalent "digital" thing...

That's why I occasionally even print out _code_ \- usually when I know I'll
spend a lot of time changing a particular file, and I'm having a hard time
understanding it or maintaining focus. Paper + color pens facilitate thinking
better than an open IDE.

~~~
bsharitt
> Not to mention how infinitely more convenient paper is to handle than
> laptops, and while I can easily spread 10 A4 pages in front of me to look at
> them simultaneously, I doubt my company will buy me 9 more computers to do
> the equivalent "digital" thing...

People nowadays laugh at how people in Star Trek always had multiple PADDs and
sorted through them like a stack of papers or books, but at the end of the day
trying to cross reference several sources to do work on a single iPad can be
very frustrating.

~~~
chrishacken
There's probably a huge market for super thin portable (wireless) displays. If
I could grab a handful of displays and wirelessly link them with my laptop
while using gestures to move content between them, I'd probably pay a few
hundred dollars per display. (I imagine the drawback of them being wireless
would be a really slow refresh rate, so you likely wouldn't be able to watch
video on them.)

If you placed a magnet on the back of them you can throw one on the wall when
you get home and it could detect it's location in the room and start serving
as some other systems interface.. like a thermostat or something. Then pick it
up on your way out the door and it connects to your phone or laptop.

~~~
jkaljundi
No reason more than 2 thin displays couldn't spread out of this laptop in the
future: [https://www.wired.com/2017/01/razers-project-valerie-
insane-...](https://www.wired.com/2017/01/razers-project-valerie-insane-
laptop-3-screens/) :P

~~~
chrishacken
I was thinking something more versatile that could have many different uses,
but that's cool none-the-less.

------
dizzystar
I've worked in a few small business, and have been the end-user for quite a
few tech products focused on SMBs. I think the problems are far more
complicated than what is written here.

First, many SMB owners are highly technophobic. No matter how good your
product is, if they straight out fear technology, you aren't going to get
anywhere with them.

SMBs, by definition, are small, and many run on credit card debt during the
slow months. They don't have the luxury of finding investments like a tech
company. Since most of them are bootstrapped, it is hard to ask for $5k /
month from SMBs. If they can hire on 3 people for the same price, where do you
think they are going to spend that money?

Unfortunately, many SMBs are stuck in a hard place with tech. The tech they
can afford is pure trash, a total displeasure to use, crashes on a weekly
basis, and so obviously bad that no one needs a math degree to understand that
this product is a money pit, and likely ends up costing more to use than it
would if everyone was doing things by hand.

On the opposite end, the products that are worthwhile to use are a) too
expensive and b) the technology companies don't want to play small ball, so
the SMBs they talk to tend to walk away feeling disrespected.

When you have a technophobic, cautious SMB owner as a customer, playing a game
of "push and see it break" isn't going to work. These products end up stalling
out the entire business for a morning, and the costs of paying for employees
not working, then tacking on overtime, reflects poorly on these products.

I totally believe that the SMB space is ripe for massive disruption. The
current tech offerings are old, buggy, slower than molasses in winter, and
doesn't work as promised. The problem is, who can get to the gate first with a
product that is cheap, productive, and obviously not the product of people
with no domain knowledge.

~~~
caseysoftware
> _The current tech offerings are old, buggy, slower than molasses in winter,
> and doesn 't work as promised. _

I'd remove the word "current" because almost _every_ tech offering they've had
has been awful ranging from the thing someone's nephew built to the website
someone hacked together to Quickbooks.

As a result, even the non-technophobes are hesitant to jump in. It becomes a
matter of "the devil you know" as opposed to hating tech in general.

And at the same time, they probably have tech in their lives - like their
iPhone - which "just works" most of the time and the contrast is even more
frustrating.

~~~
dizzystar
Well, "current" meaning "currently offered."

------
ausjke
Let's see what a typical SMB needs:

1\. office space, you can co-work, work from home, do virtual office etc these
days, not much to invent there.

2\. accounting and bookkeeping, you can hire a CPA at about $300/month, or
quickbooks/etc for $30/month, not much to be done there.

3\. hardware, computers are not expensive these days. Unless you're doing IT,
windows 10 and a NAS and printer etc can get you going, if you're geek please
use linux/bsd, again not much new stuff here either.routers/hubs are easy to
get too.

4\. communication, online video conference, cellphone, skype, various video
calls etc, slack for IRC, they're all affordable even for a startup.

5\. that left with some legal advice, sales and marketing, develop your own
products etc, which is common for all size businesses.

Might be missing something in the list, but I could not see anything major to
be disrupted in SMB space myself, especially, they're mostly having a tight
budget and fighting for survival from the start before considering being your
customer.

~~~
Clubber
You're missing a big one, their transaction / business system(s); What
software actually runs the business. If it's a small shop, that would be
inventory, vendor, customer management / POS. Any other company has their own
flavor of niche software that is used outside basic every business software.

There is some off the shelf software but they are mainly served to businesses
that have a lot of competition: pawn shops, small stores, restaurants, etc.
Everyone else has to mangle together what they can find if they can't hire a
developer to build them one. If you mangle something together, you are more
than likely to have scale problems when you least need it: when you are
growing.

~~~
ausjke
POS is pretty mature plus square, verifone etc for mobile paying now. there is
online CRM too: sugarcrm, zoho crm,etc, what is missing here in this space?

~~~
Clubber
If you reread my post, I said those types of business systems were
sufficiently served by off the shelf software.

~~~
ausjke
I think most if not all the resources existed and just spread everywhere, just
need a nice checklist and write down for non-techie SMB owners to follow,
instead of developing yet another solution.

------
geodel
So from graph 93% SMB are okay with current technology. Why then, they should
spend more on technology? SMBs are not the VC fueled startups or Silicon
valley hotshots to spend millions on new react/microservice framework and
realtime analytics generated by map-reduce cluster running on AWS that will
bring paradigm shift to business.

I'd say they spend more on service and product quality than hyped tech.

~~~
jschwartzi
I think this article is trying to manufacture a problem from nothing, for the
exact reason you state.

------
cjbenedikt
Interesting thread. Nothing wrong in hiring 2 or 3 people rather than spend
$5k on tech these days. Many SMBs also operate with software built on Windows.
They had or have to upgrade to Windows 10. Outlook doesn't speak to iPhone or
the calendar doesn't sync, cloud storage doesn't always work perfectly well,
nobody you can talk to for help, try hire a freelance IT guy - good luck. And
Windows 10 installs a new feature overnight and crashes everything. Tech at
the user level is a mess.

------
gthtjtkt
I think most SMBs don't even know where to begin.

They don't know how to identify things that may already have software
solutions available, nor would they know how to implement those solutions even
if they were aware of them.

And they're even worse at identifying business processes that could easily be
automated via custom software. There's also no way in hell they know how to
find a programmer to develop that automation (unless by some stroke of luck
they happen to know one). "What do I need, an iOS guy? A ForTran guy? My
website is in Internet Explorer, does that help??"

I think this is why consultants are able to charge hundreds of dollars an hour
for this stuff. Our company was paying $200/hr for simple SSRS reports before
I started doing them.

I also sat in on a couple meetings with outside software dev firms when our
company was trying to hire one for a single project. The whole process was a
long, time-consuming disaster that ended up going nowhere. We wound up doing
the development ourselves in the end.

~~~
mooreds
> programmer to develop that automation

Not just develop, but maintain and bugfix. When you don't have the budget for
an FTE, then how do you make sure you have access to the developer when you
need it?

------
tmaly
Stability of the solution is a major issue.

Look at websites for example. Many small businesses that have been around for
5+ years probably have a website that works well on a desktop monitor.

Every time Google rolls out a new change to the algorithm, everyone has to
update their website. Look at the change that favors mobile friendly sites in
mobile search results that happened a few years back. I still have a dentist
that has this huge website that is not mobile friendly. He spent thousands
making it. Now he is reluctant to spend thousands more to make it responsive.

------
dsugarman
We sell SaaS to many SMBs and larger enterprises. I overall agree with the
assessment here, many customers might not be fully happy with their investment
because they can not properly calculate ROI. A lot of the SMBs tend to focus
on cutting costs when it comes to making business decisions. As a SaaS
provider, when our technology enables extreme growth of their business, they
get increasingly frustrated at the rising charges for usage of our software.
The more sophisticated enterprises we work with are really great at
calculating their ROI, projecting costs and generally think much more on an
investment basis than looking at cutting costs as the sole tool to improve
profits.

------
lcw
This article is so vague, and the ROI question seemed so ambiguously defined
in the survey with Small Business owners that I believe no one should be
surprised looking at these statistics.

I have completed a good amount of customer interviews in the service and
restaurant industry and when you start talking about streamlining their
accounting or people management systems their eyes glaze over. The number 1
thing these business owners care about is more customers and/or returning
customers. I guarantee the reason that some of these businesses have negative
views of technology is because they attributed the ROI question to
technologies they actually paid for or have been approached to pay for, like
cash registers or people management software. In reality Small Businesses
leverage free technology in more ways then they perceive they just don't think
of them in context to ROI because they don't pay for them. For instance
Google, Yelp, and Facebook along with many more. I would imagine if they
thought about technology like this as supplementing their customer growth it
would improve their impression of technology as it relates to ROI.

~~~
silencio
As a small-time restaurant owner, I can appreciate the impact the less-
tangible services have on my business. My eyes only glaze over because
regardless of what's being offered, it's typically from a startup that
eventually ends up pivoting or going out of business in some fashion. I've
wasted so much time dealing with that. So. much. time. No surprise (even if my
day job is writing code) that I'm burnt out on tech for the business.

On the upside: I pay for Yelp ads, and my Yelp account manager is currently
dealing with my account being limited because I refused to acknowledge spam
messages from an UberEats salesperson. It's the first time in months a tech
problem related to the restaurant has made me laugh.

------
jorblumesea
Everyone wants to tap into the SMB market, no one wants to incur the costs
that it will entail. Support, automation, ease of use are all significant
hurdles. my startup is starting to target them and realizing how much overhead
there is...

------
no_wizard
I wonder if there could be a hidden cost however, in the downsides of not
investing in technology stacks, specifically for business with maybe a dozen
to 3 dozen employees.

For instance, if I run a series of coffee shops that use ipads as payment
terminals (think shopify, square, paypal etc) and there is no device
management solution in place (this is a relatively cheap expense), and
someone:

1) walks off with the device (not that common, in my experience so far) 2)
Device becomes locked to that users ID (dreaded activation lock, which happens
so much) 3) They need to update the settings on the device in line, but can't
reach it (lesser a scenario until you start scaling to say a dozen devices)

All of this is solved via device management, and the man hours alone to
resolve number 2 would be saved would be worth it. At least with iOS devices.
turn around times are up to 10 business days plus you need a proof of purchase
which may not be the best experience ever if you don't have it and your
carrier won't get a specific one (there are requirements for getting the
devices unlocked, as I recall)

I can only imagine the other areas of a business where the man hours saved
would actually astronomically reduce expenses, but they aren't obvious, so it
doesn't happen.

------
sgt101
One big learning curve for me in business has been that "cashing the cheque"
on benefits is much harder than creating benefits. For example, we improve the
efficiency of an engineering appointment by 5%!!! wooot! Bonus time.... except
it turns out that engineers do three appointments a day, and have a lunch
break and saving 15% of their time doesn't enable a new appointment. The end!
Now in a big company you have quite a few situations where marginal gains do
cross the line and allow you to save real money or bank real revenue, but in
little companies not so much. New tech for SMB's need to really change the
picture to have a positive impact.

------
Noos
Well, considering how awful Groupon and related coupon services were, can you
blame them? A lot of companies that reach small businesses are only solving
the problem of getting themselves paid rather than offering value. Small
businesses are already used to people trying to milk them, and tech has
potential to do so even worse than local attempts.

------
omouse
Because they aren't getting subsidies or discounts to do so? Honestly, that's
the hardest thing about a small business, you're too small for subsidies and
for all the nice deals with the state that you get as a big business.

The reason every company I've seen upgrade their tech is because they have
money which buys them time to do so. That's basically it.

------
Ericson2314
As others have said, tech sucks. Good for them.

------
tonyedgecombe
In my experience small businesses don't spend much on anything.

