Gerhard Rasocha - Unplugged

Bestselling author Seth Godin wrote a little masterpiece on “small is the new big” a while ago. I fully support his view. After years of “big killing small” (supermarkets vs. grocery stores, appearal chains vs. small shops), we are about to enter a golden age for small business.

Big used to matter. Big meant economies of scale. There was a good reason for this. Value was added in ways that big organizations were good at. Value was added with efficient manufacturing, widespread distribution and very large R&D staffs. Value came from hundreds of operators standing by and from nine-figure TV ad budgets. Value came from a huge sales force.

And then small happened. Enron (big) got audited by Andersen (big) and failed (big.) The World Trade Center was a target. TV advertising is collapsing so fast you can hear it. American Airlines (big) is getting creamed by Jet Blue (think small). BoingBoing (four people) has a readership growing a hundred times faster than the New Yorker (hundreds of people).

Yes, the game has changed. Today you get free business cards, put software development up for auction and outsource the boring, low-impact stuff like manufacturing and shipping and billing and packing to others. The cost of running a business has come down dramatically in recent years. All in favor of small business. Big are dinosaurs, small are leopards. Big is bueraucratic and inflexible. Small is lean, can easily adapt to change. Small is personal. Small is enjoying what its doing, big has to do it for the sake of others (pension funds, banks, you name it). Just look at the pharma industry. Most companies fail in research and development of new drugs (how are you supposed to manage thousands of researchers, anyhow ?). So big turns to small to licenses new drugs. To continue with Seth’s own words:

Small means the founder makes a far greater percentage of the customer interactions. Small means the founder is close to the decisions that matter and can make them, quickly.

Small is the new big because small gives you the flexibility to change the business model when your competition changes theirs.

Small means you can tell the truth on your blog.

Small means that you can answer email from your customers.

Small means that you will outsource the boring, low-impact stuff like manufacturing and shipping and billing and packing to others, while you keep the power because you invent the remarkable and tell stories to people who want to hear them.

A small venture fund doesn’t have to fund big bad ideas in order to get capital doing work. They can make small investments in tiny companies with good (big) ideas.

Want more ? Get his book
Small Is the New Big: and 183 Other Riffs, Rants, and Remarkable Business Ideas for more inspiration. Don’t wait. Get small. Think big.

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