Three of Venture for America’s fellows -- Mike Wilner, Taylor Sundali, and Matt Fulton -- noticed that over 50 percent of small businesses don’t have a website, and of those that do, over 90 percent aren’t optimized for mobile visitors. So, they started a company, Compass, to address this.
I believe that Compass is going to become a multi-million dollar business in the coming years.
I know what you're thinking: “A 'website company' is a good opportunity? Isn’t it 2015?” Or maybe you’re asking, “How the heck do so many businesses not have websites? Isn’t that the first thing you’d do nowadays?”
Especially now that there are so many do-it-yourself services like Squarespace, Wix and Weebly.
Understanding the answers to these questions requires some context. I’m going to start close to home, with my 67-year-old mom. She’s an artist, and she recently wanted to build a website to display her paintings and sell prints. So she called me, her (theoretically) tech-savvy, 40-year-old entrepreneur son and asked for my help.
What did I do? I didn’t build her a website. I didn’t want to sit there and figure out Squarespace and produce something she wouldn’t like anyway.
I didn’t recommend her to an agency. I knew she didn’t want to spend much money, and website creators generally cost at least $5,000.
Instead, I thought to myself, “Hmm, what human beings do I know that build websites that won’t rip my mom off?”
The truth is that most independent businesspeople are in their 30s or older, and most of those people don’t have the time to figure out how to build a website on their own. The proportion of people who start trying to build a website on Wix and actually finish is only 2 percent. That means that 98 percent of people give it a whirl and quit. That’s a lot of unbuilt websites and a lot of businesses that still need them.
I could have told my mom to use a freelance platform like Elance, Upwork or 99designs. But these platforms require you to submit specs, vet submissions, decide on pricing, provide content, etc. It’s a whole project-management exercise. I would have been punting my mom into a maw of complexity.
How does Compass surmount these difficulties? It builds customized websites for $800 to $1,800 and has a network of highly curated freelancers (many of whom are Venture for America Fellows). It also has a well-designed process to get the info needed from the business owner, in order to deliver a quality product quickly and reliably.
What's more, its freelancers are paid $40-plus an hour and don’t have to do all of the meta-work that makes this kind of thing painful for creatives (sell, negotiate, educate, gather content and info, etc.). Freelancers generally want as friction-free an engagement as possible. And Compass smoothes out the friction.
The market is enormous: $12 billion a year is spent by small businesses on web services each year. And there's more: It’s not just websites, but search engine optimization, email marketing, social media, analytics and everything else a small business would want to do online.
So, many companies today are saying, “Here are the tools; we’ve made it easier than ever (for you to do)!” And if you're a small business, it’s easy to understand that approach. Those companies can go big and keep costs down by minimizing the services component.
Yet, just providing better tools is not going to solve this particular problem. The vast majority of small business owners want nothing to do with figuring out a website. They are neck-deep in their business trying to keep it going. If that business is catering, they’re in a kitchen, or shopping for supplies or sending thank-you notes, etc. If the business is in landscape, the owners are hiring people, mowing lawns, maintaining equipment, etc.
In short, business owners are time-starved and trying to move things off their plate. So, the key isn’t better tools; it’s accessibility, ease, convenience, process and, above all, service.
I myself ran an education company that became the leader in its category. Theoretically, our customers could have gone out and taxonomized the primary materials or found a freelance tutor; our instructors could have hung out their own shingles and tried to attract students.
Instead, we made things accessible and easy by curating the best instructors, packaging the materials in a digestible form and format and delivering a high-quality service. The company subsequently grew to tens of millions in revenue, and continues to grow to this day. (Yes, even though educational content online is now theoretically "free" online and ubiquitous. It turns out that the completion rate for those open online courses is only about 4 percent.)
At our company, we never raised any money; investors probably wouldn’t have liked the business model anyway. Too many people involved.
So, there’s a lesson here for entrepreneurs looking for opportunities: Technology is transforming industries and enabling unprecedented levels of both reach and access. It’s getting better all of the time. But each new toolset or means of communication requires another investment on the part of businesses and individuals that may not be in a position to make that investment.
And clearly when people approach a transaction or task they don’t necessarily want to equip themselves or become experts. There’s a reason that headhunters still thrive, despite LinkedIn; and real estate brokers still make money, despite Zillow.
If you go deep into a problem, most all of the time you'll find more problems that need to be solved from the ground up. Yet technology can create needs, even as it addresses them. Sometimes solving the base problems requires a lot of work -- and that is where opportunity lies.