There has never been a better time to start a small business. That’s the refrain we heard from leaders of top technology companies catering to small and medium-sized businesses (SMBs) during the GGV Capital SMBTech Summit 2020. Such optimism may seem misplaced considering we’re in the midst of a global pandemic that has disproportionately impacted small businesses, many of which are struggling to survive amid restrictive measures that have severely limited their operations. But small business owners are nothing if not resilient; they see opportunities where others see obstacles.
At the second annual SMBTech Summit, entrepreneurs from tech companies that serve SMBs gathered to share best practices, from go-to-market plans, to customer success, hiring and talent, and leadership strategies. They shared observations about their small business customers and discussed ways to support them through these challenging times, offering ideas on the types of products, services, and support SMBs need in an evermore tech-centric future.
At the Summit, we also delved into some of the findings of GGV’s SMB Sentiment Survey, conducted in conjunction with small business accelerator Hello Alice, discussing ways business owners—especially women, Black, Latinx, veteran, and other New Majority entrepreneurs—can turn their optimism into profitable companies in 2021 and beyond. Because despite facing unprecedented headwinds in 2020, small business owners aren’t giving up. Our survey found that 83% of business owners believe their businesses will perform better in 2021 than 2020, while 93% plan to hire and 75% intend to increase spending on technology next year. Small businesses are the engine of the global economy. In the US, more than 60% of workers are employed by small businesses, which generate 40% of GDP. That’s why tech companies building the products and services that will help small businesses prosper will in turn prosper themselves, creating billions in market value.
Below are some key thoughts, strategies, and experiences our speakers shared at the SMBTech Summit. We hope their insights may help entrepreneurs building SMB tech companies make decisions that will help their customers emerge stronger in a post-pandemic world.
Now is the time to help SMBs go digital
“For small businesses, being online was a choice before, you could get by even though it wasn’t optimal. Now, online is needed to survive as a business. No matter what type of store or how big or small you are, you have to operate as a tech company.” — Allison Barr Allen, Co-Founder & COO of Fast
“The most disruptive technology is bottoms up; anything that makes life simpler, faster, cheaper, and easier for small companies is truly disruptive. It levels the playing field for small companies competing with big companies.” — Brent Bellm, CEO of BigCommerce
“COVID compressed three years into three months in terms of tech adoption. Many SMBs had to make a sudden and dramatic shift to online. Before, a small business could get away with analog tools, but that changed overnight with the need for contactless payments and customers wanting to transact on mobile devices.” — Jackie Reses, former Capital Lead at Square Financial Services
“Local pizza shops are the lifeblood of their communities and Slice is a technology platform that helps them compete with Dominos and Papa Johns. Small businesses should have access to the same robust technology as the big guys.” — Jacqueline Meyer, Chief People Officer at Slice
For SMB tech providers, recurring revenue is king
“The thing that catches lots of companies off guard when selling technology to SBMs is that it’s really a numbers game about repeatability. And you cannot get to $5 million in revenue with founder-led sales, it just won’t work. You have to dig in and hire a go-to-market team right away; we hired our first account executives just six months after founding the company.” — Ryan Denehy, Founder and CEO of Electric
“The SMB market is fundamentally different than large enterprises. From the customer perspective, the SMB buying process is completely different in that one person makes the purchase decision quickly and wants to get up and running fast. SMBS might look at peer reviews and ask other businesses and then it’s a quick choice after that. Find out all you can about your potential customers’ decision-making process before creating your sales plan.” — Yamini Rangan, Chief Customer Officer at HubSpot
“The ideal customer changes over time. Someone that is a great customer in 2017 is not the same four years later. As our product has matured and we’ve collected much more data on how our customers use it, our target customer has evolved. Have the discipline to pinpoint what your bullseye customer looks like and then draw concentric lines out, and if a potential customer is too far out from bullseye, either don’t sign them or don’t renew them.” — Ryan Denehy, Founder and CEO of Electric
Acquiring (and keeping) SMB customers
“How does a tech company take care of customers who aren't necessarily the most tech savvy? That’s why it’s never too soon to lay out the basic flow of the customer journey. Which factors and decisions lead to a customer growing their spend two to three years down the line?” — Glenn Weinstein, Chief Customer Officer at Twilio
“Our customers are thousands of small daycares and preschools and millions of parents use the platform to pay and communicate with providers, so our main focus is always to ask ‘how can we help customers find more value in our technology so they can in turn help parents?’ We have simple, repeatable processes customers can use to find more value in the platform.” — Lauren Humphrey, Vice President of Customer Success at Brightwheel
“One of the most fundamental shifts with cloud delivery is that customer retention is more important than acquisition; recurring revenue is more important than revenue. Always look at revenue retention, which is net ARR minus downgrades and churn. Try to make the customer experience really great from start to finish. Look at customer activation, then engagement, then ongoing usage, and then decide where you can offer value expansion.” — Yamini Rangan, Chief Customer Officer at HubSpot
“We use a voice of the customer platform that combines net promoter scores, product feature requests, and customer reports all in one central repository and each month it is delivered to everyone in the company. This way, customer success provides a pulse check to the whole company on where our customers are at, and that creates a common language for our company that’s entirely centered on customers.” — Jason Williams, Chief Customer Officer at Guideline
“Our small business customers rely on us to run their IT systems and, during the pandemic, everything shifted overnight. We helped our customers set up over 200 VPNs in the first week of remote work, then had to support them offboarding many employees during layoffs, and other very difficult challenges. We asked them what they needed and then worked around the clock to have their backs. We had to pivot because our customers were pivoting.” — Jamie Coakley, Vice President of People at Electric
Be flexible in a remote-work world
“More and more talent is looking to be engaged in a workplace that has a clear mission. Having a North Star everyone can believe in has been critical during the remote work environment of the pandemic. Everyone on your team should be working toward the same mission so that on tough days you can remind yourself what you’re working for and that’s a great motivator to keep going.” — Jacqueline Meyer, Chief People Officer at Slice
“During these times, make sure to check in with your employees with empathy, ask them: ‘Are you really ok? What’s going on in your personal life? How is it sharing a studio with your significant other who is on calls all day? How are you managing homeschooling your kids?’ We trained our managers on empathy and told them to encourage employees to do what they need - have breakfast with your kids, take a nap during the day if you really need it, or ask for a day off or a deadline extension.” — Jamie Coakley, Vice President of People at Electric
“One of the muscles I’ve tried to strengthen in myself and my management team is the muscle of forgiveness and grace. Employees are remote, they are stressed, and they are perhaps behaving in ways that aren’t normal to them. Our managers are handling these situations by calling out any negative behavior, but then instantly asking for and giving forgiveness. During tough times, don’t let the grudges build.” — Brent Bellm, CEO of Big Commerce
Catch replays of each panel here: