The Future of Small Business?

If I would be asked which technology or ‘innovation’ has had the most profound impact on the way I work I would answer: Working remotely – with clients and systems I hardly ever see.

20 years ago I played with modems, cumbersome dial-in, and Microsoft’s Netmeeting. Few imagined yet, that remote work will once be the new normal. Today I am reading about Industry 4.0, 3D printing, the Internet of Things, and how every traditional company has to compete with Data Krakens like Google and Amazon. Everything will be offered as a service, including heating. One consequence: Formerly independent craftsmen become preferred partners or subcontractors of large companies, of vendors of smart heating solutions. Creative engineering is replaced by calling the Big Vendor’s hotline. Human beings cover the last mile that robots or software cannot deal with – yet.

Any sort of customization, consulting, support, and systems integration might be automated in the long run: Clients will use an online configurator and design their systems, and possibly print them out at home. Perhaps someday our clients will print out their heat exchangers from a blueprint generated on Kraken’s website, instead of using our documentation to build them.

Allowing you to work remotely also allows everybody else in the world to do so, and you might face global competition once the barriers of language and culture have been overcome (by using ubiquitous US culture and ‘business English’). Large IT service providers have actually considered to turn their consulting and support staff into independent contractors and let them compete globally – using an online bidding platform. Well-known Data Krakens match clients and freelancers, and I’ve seen several start-ups that aspire at becoming the next matching Kraken platform for computer / tech support. Clients will simply not find you if you are not on the winning platform. Platform membership becomes as important as having a website or an entry in a business directory.

One seemingly boring and underappreciated point that works enormously in favor of the platforms is bureaucracy: As a small business you have to deal with many rules and provisions, set forth by large entities – governments, big clients, big vendors. Some of those rules are conflicting, and meeting them all in the best possible way does not allow for much creativity. Krakens’ artificial intelligence – and their lawyers and lobbyists – might be able to fend off bureaucracy better than a freelancer. If you want to sell things to clients in different countries you better defer the legally correct setup of the online shop to the Kraken Platform, who deals with the intricacies of ever evolving international tax law – while you become their subcontractor or franchisee. In return, you will dutiful sign the Vendor’s Code of Conduct every year, and follow the logo guidelines when using Kraken’s corporate identity.

In my gloomy post about Everything as a Service I came to the conclusion that we – small businesses who don’t want to grow and become start-ups – aspiring at Krakenhood themselves – will either work as the Kraken’s hired hands, or …

… a lucky few will carve out a small niche and produce or customize bespoke units for clients who value luxurious goods for the sake of uniqueness or who value human imperfection as a fancy extra.

My personal credo is rather a very positive version of this quote minus the cynicism. I am happy as a small business owner. This is just a single data-point, and I don’t have a self-consistent theory on this. But I have Skin in this Game so I share my anecdotes and some of the things I learned.

Years ago I officially declared my retirement from IT Security and global corporations – to plan special heat pump systems for private home owners instead. Today we indeed work on such systems, and the inside joke of doing this remote-only – ‘IT-style’ – has become routine. Clients find us via our blog that is sometimes mistaken for a private fun blog and whose writing feels like that. I have to thank Kraken Google, begrudgingly. A few of my Public Key Infrastructure clients insisted on hiring me again despite my declarations of looming ignorance in all things IT. All this allows for very relaxed, and self-marketing-pressure-free collaborations.

  • I try to stay away, or move farther away from anything strictly organized, standardized, or ‘platform-mediated’. Agreements are made by handshake. I don’t submit any formal applications or replies to Request for Proposals.
  • “If things do not work without a written contract, they don’t work with a contract either.”
  • I hardly listen to business experts, especially if they try to give well-meant, but unsolicited advice. Apply common sense!
  • Unspectacular time-tested personal business relationships beat 15 minutes of fame any time.
  • My work has to speak for itself, and ‘marketing’ has to be a by-product. I cannot compete with companies who employ people full-time for business development.
  • The best thing to protect your inner integrity is to know and to declare what you do not want and what you would never do. Removing the absolute negatives leaves a large area of positive background, and counter the mantra of specific ‘goals’ this approach lets you discover unexpected upsides. This is Nassim Taleb’s Via Negativa – and any career or business advice that speaks to me revolves around that.
  • There is no thing as the True Calling or the One and Only Passion – I like the notion of a Portfolio of Passions. I think you are getting to enjoy what you are learning to be good at – not the other way around.
  • All this is the result of years of experimenting in an ‘hyperspace of options’ – there is no shortcut. I have to live with the objection that I have just been lucky, but I can say that I made many conscious decisions whose ‘goal’ was to increase the number of options rather than to narrow them down (Taleb’s Optionality).

So I will finally quote Nassim Taleb, who nailed as usual – in his Facebook post about The New Artisan:

Anything you do to optimize your work, cut some corners, squeeze more “efficiency” out of it (and out of your life) will eventually make you hate it.

I have bookmarked this link for a while – because sometimes I need to remind myself of all the above.

Taleb states that an Artisan …

1) does things for existential reasons,
2) has some type of “art” in his/her profession, stays away from most aspects of industrialization, combines art and business in some manner (his decision-making is never fully economic),
3) has some soul in his/her work: would not sell something defective or even of compromised quality because what people think of his work matters more than how much he can make out of it,
4) has sacred taboos, things he would not do even if it markedly increased profitability.

… and I cannot agree more. I have lots of Sacred Taboos, and they have served me well.

6 thoughts on “The Future of Small Business?

  1. I am a fan of IoT. It’s an environment in which engineers and theoreticians are sharing stuff and working together to turn big data into big ideas which could well shape the future of our planet.

    • I hope that the massive security issues with ‘Things’ can be sorted out – currently I don’t see any other option than more regulation and more control over the device and its connections by vendors and internet providers … so that tinkering with ‘your’ device will be illegal.
      My thoughts on this after the last big DDoS attack by things: https://elkement.blog/2016/09/30/internet-of-things-yet-another-gloomy-post/
      I have seen really ‘interesting’ things in network traces of Things, and I have noticed that vendors are sometimes not interested if you inform them about potential security issues with their devices.

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