Startups look at the world without any baggage or legacy while most institutions lumber under historical constraints ranging from “that’s the way we’ve always done it” to Christensen’s Disruptive Innovation. In our #Reinventing series, Hunter Walk will apply the question “how would it look if it started today” to existing products, companies and ideas.
My love of local small businesses developed while working at an independently owned bookstore in the New York City suburbs. The store eventually succumbed to tough economics – although Amazon & the ecommerce displacement were a few years away, big box retailers could price bestsellers lower than our wholesale cost. And although customers praised our service, they ultimately spent their dollars at Barnes & Noble for 40% off hardcovers.
Many things have changed since my teenage years discussing Sweet Valley High books with tween girls. For one, I’ve abandoned SVH for The Hunger Games. But running a local business is still an incredibly difficult endeavor. During the 2008-09 recessions I consciously concentrated my spending at a few local restaurants, hoping to help them stay viable. Local small/medium business (SMB) is still cash flow dependent – a bad quarter and you start laying off employees or cutting hours. Two or more bad quarters and you might be out of business completely. So as consumers you really vote with your feet and your wallet – everything else is just talk.
How can businesses improve their odds given these challenges? Safety in numbers is always a natural response and many communities have chambers of commerce (CoC) to help align the interests of business. The first CoC was founded in 1599 France. Now 400+ years later, it’s hard to find a US town without their own chamber. Browsing a bunch of their websites, the typical chamber focuses on meeting with local politicians, encouraging visitation, helping businesses navigate their bank financing and physical space needs. While worthwhile, these activities still resemble the 1599 model. Some CoCs have sought new tools, such as Palo Alto pushing a version of local shopping aggregation via ShopLocally with very limited success.
Head scratch – CoCs should be a vibrant part of the new economy but seem tied to their historical functions. If you were creating these coalitions from scratch today, with the single goal of a vibrant local economy, what could they do? How would the Chamber of Commerce be #Reinvented?
Think like a CTO, act like a SysAdmin
Every small business is in the technology industry – from managing their internal systems to public-facing web presence. CoCs could function as a local version of the Geek Squad, hiring 1-2 technical support folks to service local businesses.
Beyond intermittent needs, the CoC would help fund and manage a commercial district-wide WiFi network. In exchange for logging on – and allowing themselves to be anonymously tracked for market research purposes – shoppers could have great continuous connectivity in shopping hubs. CoCs would have informed opinions on what coming technology trends would mean for local businesses and issue thought papers with actionable tips (see BigData down the page).
Purchasing Co-op — and Someone to Put the Screws to Groupon
The collective purchasing power of a town’s businesses is significant but today rarely harnessed. Orders likely don’t even need to be bundled, just annual volumes negotiated with suppliers. Whether physical goods, speciality items or services such as security guards or cleaning crews, the CoC could be negotiating on behalf of the town. Issue RFPs, evaluate responses, and award contracts.
And on that note, every town needs its Ari Gold- a slick agent-type to negotiate with daily deals sites. Imagine the Palo Alto CoC using their leverage pits Groupon vs Living Social to see who can give them best terms, promotion and other benefits. You want merchants in our town to use you en masse? We want 75% rev share.
Run Demo Days
There’s an explosion of tech companies calling on small business, so many that “merchant fatigue” is becoming a real issue. The local bakery has to actually service customers not just listen to Y Combinator companies pitch them the latest greatest local mobile social gamification daily deal service. The CoC should serve as a central evaluation and coordination hub to run actual and virtual demo days with service providers. Saving on coordination and acquisition costs would be hugely valuable to providers — a whole town could “go Square” instead of Square needing to approach individual merchants. Interested businesses would sit through four 15 minutes pitches from employee benefit providers instead of needing to coordinate and schedule multiple visits. In fact, participating vendors would pick up the costs of sponsoring these events – even just a small amount of money to put some skin in the game and buy our local businesses some sandwiches for lunch.
Centralized Hiring Pool
CoC would collect resumes from qualified workers and run a town-wide job board. Think of something similar to the Common App for college – why should a teenager need to fill out separate applications for the yogurt shop, the diner and the Indian take out place? CoC could even go a step further and actually interview candidates, providing a first level of screening and making results available via written summary or video.
Think Big (BigData that is)
So much data available – imagine if local businesses were able to share customer lists for remarketing purposes. Or go a level further with a town-specific loyalty program spanning all local businesses (eg spend $100 get $5 in virtual currency redeemable locally). Forget the issues around competition – the next city over and the entire Internet is a bigger threat than the other hardware store in town. Local business competes with national retailers by getting smarter with their data. Pricing and inventory management. Marketing, customer acquisition and retention. All of this can be improved via some centralized business intelligence.
The individual is now a business
The CoC of today would be less tied to physical bricks and mortar establishments. Technology and economic necessity means the individual is now a business. Whether you like it or not, the eBay seller, the airbnb renter, the taskrabbit rabbit — they are all “businesses” in your local economy. Don’t ignore them or sue them. Embrace and bring them into the conversation.
These are just some of the ways local economies would benefit from coordination. Net result, the Chamber of Commerce could play a significantly increased role in accelerating local entrepreneurs and local economies. Most of the ideas here revolve around allowing participating businesses to combine or outsource every task which doesn’t translate to immediate benefits or competitive advantage. And at the same time, spreading best practices and technology tools such as CRM which were previously only available to the largest companies. Storefronts now compete in a global economy and their survival odds are dependent on new infrastructure and new support. Or we risk losing the vibrancy, and jobs, provided by our local commercial spaces.
Hunter Walk enjoys writing about the impact of technology and product design at hunterwalk.com. You can also follow him on Twitter via @hunterwalk or add him to your Google+ circle
Freakin’ awesome article. My frustration with local CoC’s knows no ends, yet the importance of supporting local economies and empowering SMBs is near and dear to my heart. Thank you for giving me much food for thought.
Thanks. Local economies still a big part of a community’s vibrancy.
Hunter, Really great insight. Over the last 28 years I have actually interacted with 100s of Local Chambers. I can say that many of your reinventions are actually a part of many local chambers. In fact over the years quite a number have become very aggressive in promoting effective buying co-ops with varying levels of success. Many have developed “shop-local” programs also to varying levels of success.
Clearly each Chamber is more or less a locally owned for profit or non-profit. There is no fully recognized structure and some, but not all are a part of a national system. Clearly each Chamber is really more or left to it’s own devices to create programs. So for many of these great ideas to take hold on a wider level, the Chambers would be run more like a Franchise than the current iteration.
But these are not the real issues. Firmly based in empirical reality one finds that the best ideas you or I can come up with can not really execute in the real world of the small merchant. A good example is the local “Loyalty Card”. These ideas sound quite good. In fact at one time every major Mall in the country was trying out this idea. The empirical realities are there are numerous failure points. We, the technical early adopters sometimes, perhaps rightly so, believe that just about all things can be solved with sexy technology. However it is this thinking that has haunted 1000s of tech companies hoping to bring these merchants to a new world. The failures come one approches this from the top down, looking to solve problems that may not actually exist.
One example is the Point Of Sale system. Companies like Intuit at one time thought that all these merchants needed was more data, more charts and a POS system. Why is it that a small cafe or small shop does not generally use a computer at the check out area? In 2012, is it that they are just so very backward? Even at small business in the Valley, not to mention in Cleveland, Ohio? I will bet that 98% of the time, you will find a $59.99 Casio cash register and a 1980s era Credit Card terminal sitting at the check out area. Why? Well this is far more complex to portray here. There of course is a pragmatic aspect to this from the merchant’s point of view. Most of the barriers to adopt the things that we in Tech think is the latest and greatest thing turns out to be a misunderstanding of the actual business process that really prevail in these businesses. These are not the business processes one learns about in a Harvard MBA program.
Thus I have found to really understand small retail merchants you have to see the real segments of each industry and then focus in each sector. A Chamber of Commerce can perhaps help to some degree but the nature of each business SIC Code really have a spectrum of potential needs that would challenge any general purpose organization like a Chamber. Perhaps the best a Chamber can really do is to be a promoter of the benefits a particular region has with the unique mix of businesses the region has to offer.
Great comment. Yeah at the very least helping local businesses understand and apply technology seems like a win.
My almost worthless piece of advice to any Chamber of Commerce. Change Your Name! The US Chamber Of Commerce was rumored to have received foreign money in it’s funding of GOP candidates in the last election. As a SuperPAC they don’t have to divulge their sources.
Unfortunately, the current national Chamber could care less about small businesses in terms of what they support. They don’t understand the new business model and they have clearly aligned themselves against responsible businesses that actually care about the environment and human beings. That is all to say that the only hope for a “chamber of commerce” existing like this one is to start a new one. Let the old one eventually die off an irrelevant death. It is not serving the world, the US, or where the world of business is going.
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Enjoyed the article, but after pondering it, I wanted to how many chamber of commerces include both big box retails and small/medium businesses or are just operated by big box retailers. It seems like chamber of commerces current fill a need and the proposing organization might need to be a new separate entity so it would be unencumbered by history.
fully reasonable – i rather CoCs start w this list and then rule stuff out than not consider playing a broader role
This is a brilliant piece Hunter. We just had the exact same discussion here at Postmates yesterday. We’re looking into working with a few chambers for access to retail stores and local merchants. At least we thought that it could be a key part to our sales strategy – it may be a bit more difficult than that.
I would actually be interested in a deeper discussion. So if you can find the time, drop me a mail at bastian@postmates.com.
glad you enjoyed! i have a first kid on the way, so need a few mths before grabbing that coffee
i’m hunterwalk at gmail dot com.
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The CoC here in Oakland, CA is an expensive, bureaucratic membership organization comprised mostly of banks, real estate agents, and other extremely traditional businesses. Their objectives are not really aligned w/ us small biz folks. However, several of us are getting together to do just what you’ve described – create a business organization that helps each of us get familiar with technology, share customer information, marketing ideas, and more.
Thanks for your post – there are a lot of good ideas in here that I’m looking forward to discussing with my group.
very cool – will you follow up w me on how it goes? hunterwalk at gmail dot com
About a year ago I learned from one member that others on the local CoC were afraid to hire me for the new chamber executive director because they thought my affiliation with Guerrilla Marketing (I’m a certified Guerrilla Marketing Coach) made me sound too radical.
They were afraid of change themselves, of the possibilities of looking at issues and solutions from another angle, of doing anything differently than had been done in the past.
Today, their membership numbers continue to drop, the same few retail and professional firms benefit most from what meager activities and marketing is done. And as a local service oriented business I have yet to have more than 1 single member encourage or ask me to join. Most likely because at the interview meeting with them, one of the things I said I was looking forward to helping them do is define what benefits they could provide for each type of local businesses within their area. When I queried, no one knew — or was willing to speak up — what benefits they offer, or MIGHT offer — to members and prospects other than the handful of downtown retail stores and local banks.
I was told how few local businesses there were. They blinded by their own fear of change and lack of initiative. True, downtown business was dwindling…yet I had in my files a list of over 100 service and non-conventional businesses located within the CoC’s range. Some had been in business 5 years or more, and never approached by the local chamber. Some were new businesses the CoC had no idea how to target and draw into their ranks. So, the powers that be within that CoC treated those 100 prospects as if they didn’t exist. And they wonder why their CoC continues to struggle.
Sad.
thanks for the additional info – so much opportunity!
As a former chamber exec(13 yrs.) I really appreciate this article. At least the Marseilles Chamber of Commerce was able to finance and fit out frigates to fight the pirates on the Med — in that sense a better model than today’s chamber. Problem is getting around all the internal competition of the phone company, the cable company, local community college and countless IT entrepreneurs. They would see so much of this as competition. “Well, as I see it, the Chamber is here to promote all business and not to compete with ANY of it,” too many leaders said.. We never could get Chamber Dollars off the ground and Buy Local fizzled repeatedly. I won’t say how long ago that was.
Contrary to the perception that chambers have money, especially development money, the truth is that most are struggling to pay insufficient staff. Boards come and boards go, each with its own agenda or no agenda at all. But God protect the Business after Hours and the Golf Outing. THESE are chamber. I managed to lead a successful effort to create a minor league ball team. Our leadership program was a success, but it is hard for chambers to be a business for business, easier to be a 19th hole for business and community — where schmoozing the politicians takes place. It sounds as good as pols “promoting” JOBS. Industrial safety sold well. We led a successful land use program which government managed to stifle. And as long as we had strong and powerful, large employers we were pretty well supported (even they failed at education reform), but then came the vaunted global economy and the much ballyhooed services industry. The later is not real industry like the companies that used to make steel and dump trucks — too little value added opportunity from whence cometh the discretionary money to help out at the chamber. The former? Well, it’s tough to get a German company to support a local chamber like the local base used to.
I used to quote Tecumseh all the time. “A single twig breaks easily,” he said, “but the bundle is strong.” It worked for the ball time.
David Milliken
http://www.thetortoisefactor.com
great stuff – when i wrote this i hoped to hear from folks who’ve actually served on CoCs about what would – and wouldn’t work. Appreciate the comment.
Hunter,
I LOVE YOU MAN !
This is a Smokin Hot indictment of the failure of the CoC (and most others like them) to adapt to the real and constantly changing world.
I SPEAK to these organizations regularly and they KNOW they’re becoming irrelevant exactly when they’re most needed, and yet they can’t seem to grasp the HUGE opportunity to adapt to what’s happening !
We need to talk, SOON ! get in touch with me Hunter, Seriously !
I can’t help but reply again. A flood of memories comes back. It was a career I loved as a director. In many ways I saw some of the best of Chamber. Not to sound like some kind of big visionary, but I was always frustrated at the great potential if only . . . if only et cetera. One of your replies suggests starting a new organization. That is how chambers lost the leadership of economic development to public-private partnerships. For years chambers prided themselves on spawning all kinds of organizations — just like the global economy devotees of the US who thought the national economy was so damn strong we could just send it all away across the world. Oh, we Yankee inventors, superior to all, we could not fail, because we have American know how, blah, blah, blah, the GOP and US Chamber chants. Perhaps we forgot that “laisser faire” is French. Maybe we forgot that our mother, England, had an industrial revolution, too, and before us. Germany has always been a top notch, industrious nation along with Sweden. Inventiveness and genius was given to humans not just Yankees. It is time for all the jingoism to stop, including the idiocy regarding European socialism. I think it was one of those Europeans who found the God particle at that fancy new collider in Switzerland, Austria or wherever. The only good thing the US Chamber ever did for locals was set up and excellent professional Institute. Institute was a place of creativity and free-minded thinking. How it was ever created by the US Chamber always amazed me. Well, I won’t go on, but maybe someday the book I’ve written will find a publisher. And as far as public perception of chamber goes, I fear it may still be the best place to get your list of restaurants and a map — if you don’t go to the Internet first. By the way, Chamber lost much of its informational function to the Internet years ago.
Yours in chamber,
David Milliken
I had some very similar ideas, not so long ago Hunter. I started a website called “Small Business Global Presence” (http://smallbusinessglobalpresence.org/) to try and embrace much of what you just wrote about. I thought it could be a philanthropic project I could fully embrace, as someone who favors the “Small Business” and “Made in the USA” ideals.
I wanted to start the organization by focusing on the “BigData” you mentioned. My idea was to 1. Provide the infrastructure which would support the internet presence of the small businesses. 2. Set up WiFi in the commercial district for the member businesses, and track for market research. 3. Facilitate a client list, via list sharing, for all member businesses. 4. Solicitation and Workforce Reception Service – to screen solicitations, set up demonstrations, compare services/prices and accept applications on behalf of all member businesses. 5. and on, and on, and on.
I put a few feelers out. The conversations I had went poorly, because people have paid dearly for CoC membership for years, and got very little from them. How could they expect anything different from SBGP? Plus, I was only one guy, with an idea and no funding to see it through.
After spending many months trying to drum up some support for this type of idea, I finally took the website (and Facebook page) down. I still own the SBGP domain, but it is simply forwarded to another small business, I’m involved in (http://sapphiresolutionsltd.com/)
I would love to see this idea get off the ground. I would be willing to help in any way I can. If someone has some ideas, I’d be open to hearing them.
will do. and if you see interesting developments, please let me know
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I’m a little late to the ballgame here, but this article and thread has got me fired up! I am a small-town chamber exec. and what the article talks about is the direction we are heading. I wish I had some fellow colleagues to get excited about what the future of Chambers could be, but I just can’t seem to find many. My view of the “Chamber” stems from having belonged to 1/2 dozen or so in the previous 8 years, both as an executive director of a nonprofit and as a small business owner (which might explain why I view things differently). For example, we’re giving more things away free with membership to add value instead of asking for more money and worrying about our bottom line. We’re going out and showing people that the purpose of the Chamber is not in and of itself to exist, but to promote them, encourage them and provide them with resources to be successful. After all, I believe if they were all making tons of money than we might not need a Chamber after all.
We’re not adding events simply because we need to look busy, but rather spending time with our members in areas of their need. We’re giving honest advice, both good and bad. I admit, it’s not easy. Some people don’t get on board quite as easily and are more skeptical. They like how it was. It’s also hard with business owners that are more just working for themselves rather than those with a true entreprenuerial mindset. We also need more businesses stepping up and asking what the benefits of joining really are. I’m blown away when I meet with businesses that have belonged to our Chamber for years and I ask them simply, “What can we do to help your business?”. So many have never thought about it because it’s never been asked. And we’re not just responding by telling them to come to a Chamber coffee to network and it will all be better.
What I struggle with the most is finding other chambers that are being more progressive and challenging the norms. I’d love to build a network of others professionals, in and out of the Chamber profession, that have new ideas. I’m tired of hearing about the value of a printed Chamber directory that in Chamber professional’s words “still makes us good money” when they know they are selling ads to businesses claiming it’s a great value when no one in the public reads them anymore. If any of you know some, please forward my way. Or if you are small business owners share with me other ideas that we can explore. Great article!
wow, thanks for the awesome comment. I was writing this from a naive perspective, hoping to hear from folks who have been living this stuff everyday. Awesome to learn abt your work and looking forward to more updates!
Hey Jason,
Want to talk sometime about how to address this?
Get in touch.
Rick
Wow, as a SBO, I was so happy to find this article. My local chamber had a wonderful Executive Director named Paulette. She did everything to promote small business for the chamber and yet had a healthy balance of activities from community to local political coffees. Paulette did a lot of the small business owners and had passion to help them out, open to new ideas. She passed away in 2011 and the new staff, although very nice and hard working, seem to be missing what Paulette had: she was a former small business. I only wished she could have written the manual on how to run a CoC. Nowadays, the leads we once had from her have dried up.