Paul Wallbank – Brilliant Communications

Author: Paul Wallbank

  • Does small business need government support?

    Does small business need government support?

    The New South Wales State Government’s decision to axe their long standing small business programs raises the question of whether small businesses need government support at all.

    Last week’s announcement the NSW Government are abandoning their business education programs and replacing them with a previously announced network of local business advisors shows where small business lies in the state’s list of priorities.

    Taken at face value, the changes appear to be moving back to the face-to-face business advice model of a decade or so ago that was common before the winding back of small business programs and local enterprise centres by then Federal Liberal and state Labor governments under John Howard and Bob Carr.

    On closer examination, it’s a cut to business support and an effective withdrawal of NSW government assistance to small business. The remaining services will be outsourced to the same local business centres that have been starved of funds for over a decade.

    A concern with the individual advisors will be how many businesses they can reach, according to the NSW Trade & Investment annual report 2010-11 the axed events had an audience numbering over 5,000. It’s difficult to see how the advisor network will match that and makes one wonder how the more important events couldn’t have been streamed or podcast across the Internet.

    Putting aside the pros and cons of this restructure, the bigger question is should small business expect any government support at all?

    The record of Australian government support for industry is not good. We only have to look at repeated visits to the trough by what remains of the Australian car making industry, the bipartisan debacle of assistance to the renewal energy sector or the support given by the Keating Labor government to Kodak to see how well schemes have worked out.

    Most of Australia’s economic success stories have happened despite, not because of, government’s pouring money into industries. For example, the first five years of the current mining boom was completely missed by the political classes along with the Canberra press gallery and the media economic commentators.

    This is where small business steps in – rather than relying on access to the ministerial suite to protect their industries, the little guys and the startups compete on price, service and innovation. Aspects that organisations in protected industries or those dependent on taxpayer largess struggle with.

    Indeed many small business owners and entrepreneurs struck out on their own because they felt stifled by bureaucracy. So offering them programs wrapped up in paperwork is counter intuitive.

    Where the government can help is with keeping busy business owners up to date with new developments in business, markets and technology which was exactly what the events programs like Small Business September and Micro Business Week did.

    It’s difficult to see how the individual business advisors employed by local Business Enterprise Centres will keep up with their clients up with changes regardless of how skilled or well intentioned they are.

    All of the changes are justified by the report from the Small Business Commissioner’s listening tour. Apparently she was told businesses didn’t want events like Small Business Septtember

    I certainly didn’t hear any complaints at the breakfast fourm I attended at the Northern Beaches, most of the concerns seemed to be from cafe owners arguing about council outdoor seating permits. If the commish wants to get involved with that nest of vipers, I wish her the best of luck.

    Overall, small business can’t expect much from government; particularly in the modern corporatist society where Big Government does Big Deal with Big Unions and Big Business while Big Media selectively reports what suits it.

    Probably the best thing for small business is stay nimble and avoid being stepped on the Big Dinosaurs as they dance obliviously to the major changes that are happening in the world around us.

    Big dinosaurs look after their own, don’t expect them to give you anything except a big shower of dung.

    Disclaimer: I’ve been hired by Trade & Investment to host various events on the now axed programs and worked for 19 months at what was then the Department of State and Regional Development. I wish all of those former colleagues who now find their positions abolished the best of luck in finding another role.

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  • Reinventing activism

    Reinventing activism

    In the late 1960’s the Biafran War appeared on the front pages of the world’s media partly due to a well co-ordinated advertising campaign using the relatively new broadcast marketing techniques.

    During the mid 1980s the Ethopian famine was bought to prominence by Live Aid and Bob Geldof using music videos and live television made possible by huge leaps in broadcasting technology.

    Nearly thirty years later we see an African tragedy – this time the Lord’s Resistance Army in Central Africa – again bought to the West’s attention through new media and advances in video technology.

    Each time there’s been an outpouring of outrage and determination by those of us in the West to ‘fix’ Africa’s problems. We demand our leaders do something so we march, we donate and these days we retweet or like an online video.

    In many ways  we’re like Alden Pyle, the idealistic and well meaning anti-hero of Graham Greene’s The Quiet American who believed a ‘third force’ can fix the problems of Vietnam in the 1950s.

    At the time Graham Green wrote The Quiet American in the late 1950s, the Eisenhower Administration had several hundred US military advisers in Vietnam, sent by President Truman at the beginning of the decade.

    Today, at the time of the Stop Kony campaign in 2012, the Obama Administration has ‘about’ a hundred advisors in Central Africa.

    Sometimes we don’t reinvent anything; we just use modern tools to repeat our grandparents’ mistakes.

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  • Channel blues

    Channel blues

    “We do the pre-sales work then they come along and steal the customers. It’s wrong, just wrong” growled the sales manager of an IT integrator while talking about one of the leading cloud computing services.

    The business model of systems integrators is to be a company’s, or home’s, trusted advisor on IT and make money from charging for their services and the profit in selling software and equipment.

    In the last few years that model has become tough – the collapsing price of hardware has made the profits on selling systems leaner while the increased life of systems has meant the big lucrative upgrades have become scarcer.

    At the same time services have become less lucrative as more participants have entered the market, many using offshored cheap labour to provide remote support. It hasn’t helped that computers have become vastly more reliable, particularly since Microsoft have largely solved Windows’ gaping security holes.

    The icing on the cake has been the end of boxed software and corporate licenses. These were extremely profitable for the systems integrator – a big sale of Microsoft Office or Oracle licenses to a government department could see an IT salesperson pay for a holiday home or cover the kids’ school and college fees.

    Cloud computing has largely been the driver of all of these factors’ decline and now it is really hurting those integrators and their salesfolk who were used to a very profitable existence.

    While that’s good news for computer consumers – and even better news for hapless shareholder and taxpayers who’ve been largely dudded by big IT sales pitches to gullible directors and ministers – it does beg the question of how customers now get advice and support.

    Largely cloud based services rely upon customer self service and many of the providers would struggle to include user support in their list of core competencies.

    There’s a business model there for systems integrators, but it’s difficult to see how many those used to fat profits in the past can, or will, adapt to the new environment.

    An interesting side effect of this change is how it affects companies like Microsoft where their channel partners – largely those big and small systems integrators – are one of the most important distribution networks for their products and probably their best defense against competitors like Google and Apple. That strength is being steadily eroded.

    It’s tempting to think that change affects just “old” industries like retail, publishing or car manufacturing; in reality it affects all sectors and sometimes the most modern might be hurt more than the established players.

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  • When the little guy wins

    When the little guy wins

    Australian entrepreneur Ric Richardson has finally won his patent dispute with Microsoft over the use of software protection software.

    In a post on his personal blog, Ric declared “it’s over!” and said;

    “It’s kind of like having your career anchored on a test you did when you were a kid and someone questioning your score decades after the fact… all you can do is stick to your position and hope the truth rings true.”

    After winning a three hundred million dollar award against Microsoft, then an appeal striking down the size of the damages it’s been a hell of journey for Ric and Uniloc.

    The silly thing is for Microsoft they largely abandoned this method of validating software after 2003, so they could have settled this a lot earlier. Or just paid the license fees in the first case.

    You also can’t avoid the irony of Microsoft being successfully sued over a product design to protect intellectual property.

    It’s always good to see the entrepreneur and inventor get up in a world that often seems tilted in favour of the corporations.

    Now we can look forward to seeing a lot more innovations out of Ric’s caravan, that flat tyre detector looks really useful.

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  • Reputation’s long tail

    Reputation’s long tail

    When you decide customer support is an unnecessary cost, you make a statement that defines your position in the market place. Dell are reaping the consequences of this now.

    Micheal Dell, CEO and founder of Dell Computers, hopes to grab some of the tablet computer market from Apple with the release of Microsoft Windows 8.

    It’s a big goal – Apple have owned the tablet computer market since launching the iPad.

    Dell, along with most of the other PC manufacturers, squandered the decade’s head start they had in tablet computers with poorly designed and overpriced tablet PCs which were based around a clunky version of Microsoft Windows using styluses.

    Part of the problem was Windows itself; the operating system was designed for desktop users and to make it work on tablet computers it required a clunky workaround. Being designed for smart phones and tables mean Windows 8 may overcome previous limitations.

    But Dell have a problem; they are perceived as a low price, low quality supplier and have a competitor in Apple that has locked in the supply chain for the product.

    So Dell will struggle to beat Apple on price while customers believe the Dell system is inferior.

    Even more difficult for Dell is their support reputation, a quick look at the comments to the Bloomberg story illustrates the problem.

    Of the the sixteen reader comments, admittedly not a scientific sample, three business owners claim they will never buy Dell again after customer support issues.

    This is the critical mistake Dell’s management made in the 2000s – in order to cut costs so they could be profitable at lower price points they trashed their support.

    Eventually this culminated in the Dell Hell debacle where Jeff Jarvis’ experience summed up the frustrations of thousands of Dell’s disillusioned customers.

    Apple on the other hand chose not to go down the rabbit hole of cheap and nasty systems. Today they can offer free, and skilled, support in their genius bars as their fat margins allow them to provide constructive and helpful assistance to their customers.

    Now Dell has the reputation for at best indifferent after sales service which means they are locked into competing on price and ever declining margins.

    It’s not a good place to be for Dell but that’s what you get for treating your customers like an unnecessary nuisance while fixating on headline prices.

    We often talk about the Internet’s long tail; our online reputations could be the longest tail of all.

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