Google's Love For Small Businesses

bariswheel writes "The Fearless Frog is at it again: In his latest post, Cringely aims to slap some sense into Microsoft, Apple, and IBM altogether. From the article: 'What counts is that for Microsoft the platform is the PC while for Google the platform is the Internet and nobody can hope to control the Internet -- not Microsoft OR Google. Google is making a ton of money from people [small/medium sized businesses] who never were even in business before. This is not only a fundamental change in how advertising is done; it is a fundamental change in how BUSINESS is done.'"

Comments

Big verses Small

[humankind]

I work for a small company. I used to work for several big companies. I don't make as much money now as I used to, but I have ten times more freedom and ten times more happiness and ten times less stress. I do more work than I did at the big companies, but it seems less like "work." Even though, technically I don't make as much money as I did working at some larger companies, somehow it feels like I do have more money. Maybe this is because the quality of my life has improved to the point where I am not engaging in consumeristic, distractive or self-destructive behavior as much as in the past, and this leaves me more resources as well as more peace of mind?

When I worked at big companies, there always was an illogical hierarchy that insured good ideas would get buried behind the ambitions of politically-motivated managers. People used internal memos to talk in lieu of face-to-face conversations. We had way too many meetings that didn't get a goddam thing done. And half the staff's specialization involved blaming others for things that went wrong. Normally accountability and responsibility go hand-in-hand, but not in big companies. And things constantly broke down and got lost in the cracks. When I was young, this was huge hit to my idealism and I had to make a decision: Did I want to live my life this way and end up being programmed to accept mediocrity as the status quo? Or did I want to find an environment where the people were truly appreciated and weren't constantly living in fear that some corporate boss would cut their job without even introducing himself?

I would never go back.

Small and medium sized enterprises

[Flying pig]

The obsession is with what elsewhere in the world would be called medium sized companies and startups. And there is a simple reason why it is a good thing. SMEs are the feedstock. Many fail, some succeed, but they have the speed of action to exploit new opportunities. Apple began as an SME. Google was until recently an SME. eBay was an SME. Now tell me any large scale enterprise that shows real organic growth? Most of them can only try to absorb other companies and save money to pay the huge acquisition fees. They employ a lot of people - and frequently wish they did not and try to get rid of them by outsourcing, They run strange tax avoidance schemes that cause their profits to be relocated far from where their employees and customers are based. They incur nonproductive costs (lawyers, borrowing, lobbying) that don't impact nearly so much on small companies.

Show me a large company and I will show you an organisation with huge inbuilt inefficiencies and vast inertia. In the long term it is going to die or split up. That's part of the business cycle. To drive the business cycle, you need new dynamic startups and a regime in which, when they become medium sized, they can still grow. You need strength in depth, like the German Mittelstand. Some will be winners and turn into large companies. But if you only have large companies, in the long run there is nowhere but down. Small companies cannot monopolise their markets, so they have to do something well to survive.

I am surprised myself, but I find myself agreeing with Cringely - over the long term. Until recently it has taken a very big enterprise to build cheap computers, phones, or volume software. The problem is that these things are now commoditised to such a degree that they do not command a premium. It's like the transition from a world in which iron was a scarce commodity and the man who could afford a steel sword could be a military leader, to a world in which iron was a cheap building material and the emphasis moved to poeple who could think of new things to do with it. That this transition is happening over a couple of decades rather than a couple of millenia is a sign of some sort of progress.

Re:Obsession with small business

[CokeBear]

The problem is that small businesses that are really really good at what they do start to grow, and a handful of them turn into those giant unfeeling corporations that we loathe. From personal experience, I think the slide into corporate oblivion starts when the first MBAs join the company. An MBA is literally training on how not to be a human being. Business schools rob students of their humanity, and teach them only to worship short term profits. There is nothing wrong with focusing on making a profit, thats the engine that drives our economy, but these MBA grads that are being manufactured don't appear to be able to think long term, either at the long term sustainability of a company, or the long term sustainability of humanity.