Small Business Labs

Mainstream Mashups and Small Business

The New York Times has an article on Microsoft's Popfly product, which is designed to be a consumer friendly online mashup creator.  Key quote:

"... (Microsoft) introduced an intriguing software Web service called Popfly that is intended to make it possible for nonprogrammers to plug together Web components and data sources quickly to create useful new Web services. For example, news feeds could be added to digital images, or data lists to maps."

The article is quite similar to another NY Times article on this topic published last fall - and I posted on it last fall.  I guess they like Popfly and the concept of nonprogrammers being able to create web applications.  I like it too.

Mashup technology and related programming tools has made it much easier and cheaper to create web based applications.  Mashup tools like Popfly are coming to mainstream web users both inside and outside of business.  Just as end user blog tools like Typepad made it easy and inexpensive for anyone to do online publishing, these new mashup tools will do the same for a variety of analytical applications. 

And just like blogging tools like Typepad have led to a wide range of new small media companies, end-user mashup tools will create a wide range of new small business opportunities based on the development of new online business applications. 

bMighty on Data Mining and Analytical Software

bMighty is a CMP Publications property targetting IT users at small and mid-sized companies.  They have an article on real-time data mining called "The Event Driven Orgainzation".  It is written by a Cisco executive, so it doesn't fall into the unbiased source category, but it is pretty interesting.  Key quote:

"The speed at which information is gathered and disseminated has changed, but the speed at which the underlying business processes deal with this real-time information has not yet changed sufficiently."

The article goes on to talk about using data mining and analytical software to better make use of the growing flood of information.

We're starting to see a growing small business digital divide as more small businesses embrace and use technology.  These firms often use technology to gain competitive advantage over relative to less tech sophisticated small businesses. 

Data mining- especially of customer information - is one of the key areas tech savy small businesses are gaining a competitive edge.

Google and Large Datasets

One of Google's blogs has a very interesting post called "Google is All About Large Amounts of Data".  The blog post talks about how Google is using their access to large datasets to improve search and speech recognition software. Key quote:

"As we get more data from more interaction with users and from uploaded videos, our systems will improve because the data trains the algorithms over time."

Basically what they are saying is the more data the better the results.  Better results means more usage, which leads to more data.  This is a classic example of economic concept of increasing returns to scale, and is a key reason Google continues to gain share in advertising, search and other areas. 

Scale used to require physical assets in the form of manufacturing plants and equipment.  In the online world scale is about the ability to collect, analyze and mine data.  This is as true for small businesses as Google.

NY Times on Mainstream Mash-Ups

The New York Times has an article discussing 3 tools for creating mash-ups.  Mash-ups are web applications or tools that combine several data sources or use several programs to create a new tool or application.  A good example is WalkScore, which combines Google Maps with location data on shops and services to determine how "walkable" a neighborhood and specific street address is. 

The NY Times article focuses on new tools from Yahoo (Yahoo Pipes) , IBM (QEDWiki) and Microsoft (Popfly) that are designed to make the creation of mash-up applications easier and even accessible to non-programmers.  Looking at the tool web sites, only Microsoft's Popfly seems to be really targeted at mainstream users.  The other two seem to be targeted at folks with someone programming skill. 

Related to this, the Fast Forward blog recently posted on Serena Software releasing an enterprise software mash-up suite targeting business users.  Key quote from the blog post:

"...there is an increasing backlog of IT projects in most enterprises. The vast majority of IT budgets are chewed up by infrastructure to get the current applications going. René spoke about the neglected long tail of simple applications left in the queue to the increasing frustration of the business side."

This fits very well with our research which consistently shows that one of the major attractions of Web 2.0 applications is end users can create and deploy them without having IT involved.  End user mash-up tools will expand the range of applications business end users can build and deploy.

Mash-up technology has made it much easier and cheaper to create web based applications.  While these specific tools may or may be successful, mash-up tools are coming to mainstream web users both inside and outside of business.  Just as end user blog tools like Typepad made it easy and inexpensive for anyone to do online publishing, the new mash-up tools will do the same for a variety of analytical applications. 

Airline Pricing, Farecast and Dueling Computers

Airline pricing has always been a mystery and a frustration for consumers.  The dizzying array of fares has been driven by over 30 years of work by the airline industry on complex computer models designed to maximize flight revenue and profitability.  The airlines call this revenue management, and the techniques have been so successful that they've been copied by many other industries. 

In response, companies are starting to offer computer-based services to buyers.  Farecast is online travel website that finds cheap airfares and also predicts whether the prices will go up or down over the coming weeks.  From their website:

"Do you ever wonder if you could save money on airfare by buying today or waiting a day or two for a price drop? We predict where fares are going and show where they've been—now for more than 75 home airports."

Basically, Farecast is providing consumers with computer models to duel the airline computer models over airfares.  This type of analytical tool arms race is happening in wide range of industries, as both buyers and sellers strive for the best deal. 

For those interested in these techniques, the Revenue Management Forum blog posts regularly on this topic.

Prediction Tool List

I posted earlier about a new book called "Super Crunchers".  The author is collecting links to web based prediction tools and posting them here.  He currently links to about 30 tools.  Lots of fun prediction tools including:

• MLB playoff predictions
• How tall your child will be
• How long you will live
• Whether or not you should buy an airline ticket now or later
• The risk of business bankruptcy (2 tools)

The list should grow rapidly - there are lots of these tools on the web and more are being added regularly.  More examples of the increasing role analytical tools are playing. 

I saw this on the Marginal Revolution blog.

Super Crunchers, Analytics and Small Business

Alex Pang at IFTF's Future Now blog has a post on a new book called "Super Crunchers"  by Yale econometrician and law professor Ian Ayers.  From the book's Amazon description:

"the recent creation of huge data sets allows knowledgeable individuals to make previously impossible predictions. He calls the data set analysts super crunchers and discusses the changes they're making to industries like medical diagnostics, air travel pricing, screenwriting and online dating services."

Yesterday's Wall Street Journal had several articles on the use of search engine optimization and other techniques by small businesses for raising online awareness.  Yet another example of data and analytics becoming important for small business.

Scott Boras - Analytical Small Businessman

For those who aren't baseball fans, Scott Boras is an uber baseball agent who gets such great deals for his players that clubs sometimes choose not to draft players who are represented by him.  Great quote on this from a Boston Globe (registration required) article called "Why Scott Boras is the Best (and Worst) Thing to Happen to Baseball":

"Boras is as controversial as he is influential. While one of baseball's great urban legends is that there are teams that will never negotiate with his clients – baseball executives would have negotiated with Hitler if Goering could have hit a three-two curveball – there is no question that teams consider very carefully drafting a young player whom Boras represents."

One of reasons Boras is so successful is his analytical approach to his negotiations.  The Orange County Register has an article on the new office complex Boras has built in Newport Beach.  His new offices are "part offices, part museum, part restaurant, part clubhouse and part technology hub for Boras’ staff, which includes 40 data analysts."  Key quote on his computer and data system:

"Behind all the decor is the heart of the business: the computer center. While Boras came up with most of the building’s design features himself, the one he’s most proud of may be that multimillion-dollar computer system. It occupies an entire room of the lower floor complete with its own cooling system. Access is key-coded. It’s the room that’s most likely a source of many Advil moments for team owners negotiating with Boras.

The computer system contains baseball statistics from the current season back to 1870. That’s not a typo. Early stats were entered by hand. It took a long time, Boras said."

Boras and Oakland A's GM Billy Beane are often credited for popularizing the use of analytical analysis - called Sabermetrics - in baseball.  Boras is still considered to be well ahead of his competition (both other agents and baseball clubs) in his use of analytics, and has leveraged this position to build a hugely successful small business. 

While Boras's business is unusual, small business use of advanced analytics is becoming more common.  We recently met with a small business that uses sophisticated routing software - linked to data estimating potential client profitability -  to decide whether or not to bid on business.  This type of analysis was the domain of large corporations as recently as a few years ago. 

Driven by cheap computing power and the growth of the Internet, analytics are becoming increasingly important to small businesses - and often a major source of competitive advantage.

Thanks to Glenn Peterson for pointing me to the Orange County Register article.

Information Overload, Filterting Tools and Small Business

Information overload is obviously an issue most of us face.  In our research we consistently hear from small business owners and entrepreneurs that they have too much data and information.  They also say they spend too much time collecting and organizing data and information. 

The bad news is data and information creation is growing at exponential rates, and new technologies like RFID, sensors and intelligent devices are going to generate massive new streams of business data.

The good news is filtering tools and analytical software are becoming increasingly useful at helping us wade through these streams of data and information.  Tech Crunch has a post about Particls, a company focused on tools for filtering RSS feeds and information.  Key quote from Particls' website:

"The web is just too big. No one has time to keep track of all the sites and topics that interest them. We all have real work to do and lives to live!

So what if you could subscribe to the sites and topics you like best and be notified when there is new information. Particls even works out how important the new information is to you and displays a proportional alert. "

While Particls' underlying filtering technology seems pretty standard, the user interface and how the product is designed to be used are both quite clever - and nicely illustrate the trend towards more useful filtering technologies. 

Virtual Ad Agencies Target Small Business

Advertising Age has an article about Pick-n-Click, a virtual ad agency that provides an automated ad-creation website that allows a car dealer to "build dynamic print, radio, TV, direct-mail, point-of-purchase, online and/or strategy-driven creative campaign on your own".  The article says using Pick-n-Click reduces the costs of ads and improves their effectiveness.  While only for car dealers today, Pick-n-Click will expand to other industries in the future.

The article also mentions Spot Runner, another virtual ad agency targeting small business.  Spot Runner offers an automated solution for TV advertising that includes ad creation, production, media planning and media buying.  Spot Runner supports a wide range of industries, and the total costs are quite low compared to traditional TV advertising. 

The creation and placement of advertising has traditionally been the province of highly paid creative specialists (along with low paid junior staff).  Virtual ad agencies use analytical tools and software to automate this process.  This greatly lowers the costs, and allows small businesses to experiment and use traditional media as part of their marketing mix.