The Quiet SMB Revolution of the 2010s (8VC)

Summary

• There are 5.7 million businesses in the United States, 89.9% of which have fewer than twenty employees.§1
• Small and medium businesses produce nearly half of GDP and account for roughly 60% of new job creation.§1
• The rise of the mobile ecosystem has created a positive feedback loop that makes it easier to scale technology startups in SMB.§1
• Startups are increasingly developing software specifically for SMBs, with lower implementation and maintenance costs and a shorter learning curve.§1
• Platforms such as ZenReach and Buildzoom show the spread of smart technologies into vertical SMB marketplaces.§3

Key insights

1. The loop cycles between the B2B marketplace, where startups sell technology to SMBs, and the B2C marketplace, where SMBs sell to customers.§1
2. SMB owners' digital presence led to an explosion in the quantity and quality of structured and unstructured data about SMBs.§2
3. Competition from platforms such as Yelp, OpenTable, and Groupon pressed SMBs to increase their digital footprint.§2
4. Tools of the mobile era still analyzed structured data from only a single source, limiting vendors' insight into SMB leads.§2
5. ZenReach uses a WiFi platform to give brick-and-mortar retailers better data about customers' activity.§3
6. The emergence of vertical SMB SaaS shows that the market is ready for smart technologies in disperse corners of the SMB landscape.§3