MAKEWAY - The First Steps: An Introduction to the Future of Small Business

7/29/2019 MAKEWAY - The First Steps: An Introduction to the Future of Small Business

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The First Steps

An introduction to the

future of small business


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M A K E WA Y

EDITOR

Caleb Kramer

PUBLISHERMitch Kapler

PRODUCER

Kyle Studstill

ART DIRECTOR

Monica Nelson

DESIGNER

Lizania Cruz

PHOTOGRAPHERS

Brian W. Ferry

David Brandon Geeting

COPYWRITER

Spencer LaVallee

All images(whereapplicable, ofcourse)andtext MAKEWAY2013.

Thiswork is distributedunder theCreativeCommons Attribution-Noncommercial-ShareAlikelicense. Ifyou wish to use or reproduceanofthis contentin acommercial contextexplicitpermissionis required.Pleasecontactus directly.

Thiswork islicensedunder aCreativeCommons Attribution-Noncommercial-ShareAlike3.0 UnitedStatesLicense.


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HI, WELCOME TO MAKEWAY

Todays economy is portrayed as one lled with smallbusiness turnover andnancial turmoil. Were told thatthe very people who make America one of dreams arethe ones struggling to survive. Yet, living and working in

New York Citys Lower East Side, were witnesses to anexuberant class of entrepreneurslling our community

with diverse cuisine, fashion, art and business. Despitethe frightened media perception, creative business menand women are har nessing technology to deliver a mean-ingful brand and a superior product, with fewer resources.

As our conversationsand observationsbecameincreasingly more absorbed by t his commerce takeover,

we decided to take time ofrom our nine-to-ves in digi-tal marketing to dig in. We hit the streets - across the coun-try, meeting up with small business owners, technologystartups and various experts, and we dove into prescientacademic research. Overthe past year, our appreciation forsmall businesses has only grown as weve documented thepassions that drive tomorrows economy.

MAK EWAY is an editorial journey. Its our story; its thestory of todays creative entrepreneur; its the inspiration

behind the next great story to shake America.This is just the beginning; we look forward to writingthe next chapter with you.

Enjoy!Caleb, Kyle and Mitch

PROLOGUE AN UNSEEN SOURCE

McNally Jackson and survival of the ittest.

p. 6

CHAPTER ONE DATA IS THE NEW OIL!

The Rise of Square, and gelato.

p. 14

CHAPTER TWOIN IT TOGETHER

Crowdfunding and the rally call.

p. 24

CHAPTER THREECO-CREATE

More than a shaker, the aftermath of

kickstarter.

p. 38

CHAPTER FOURON BEING POWERFUL

Authenticity, relationships, and the new

craftsman.

p. 56

EPILOGUETHE WAY FORWARD

Make your way.

p. 64

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MCNALLY JACKSON:

The Quick Facts

Found at:

52 Prince St.,next to the modern-looking mac& cheese bar.

Its been here since:December 2004.

Best time to go:Try stopping in for the smallbusiness book club, 2nd Tues-day of each month.

Check out the:Featured local authorswho sell from the in-store self-printing machine.

Snack on:The treat that is paired with yourfavorite authors quote on themenu.

Mulb

erry

St

Mulb

erry

St

MottSt

LafayetteSt.

LafayetteSt.

PrinceSt.

PrinceSt.

PrinceSt.

HoustonSt.

CrosbySt.

Broadway

Broad

way

CrosbySt.

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Just a few years later and Square is be-ing used by millions of sellers acrossNorth America. Garage sales, fashionboutiques, restaurantsyou name it,anywhere business is being done, Squareis there. Even Starbucks is involved, withover seven thousand of its stores nowaccepting Square Wallet.

What drives Squares success is itssimplicity. It re-imagines the mostfundamental building block of com-merce: the exchange. Square makes thisordinary and everyday process seamlessand even enjoyable for people on bothsides of the counter, setting a bar thathas been hard for its many competitorsto live up to.

Today, Square is tracking at least $15billion in transactions a year . If you dothe math, thats an average of $41 milliona day and almost $2 million an hour. Itmakes our two scoops of gelato look likea blip on the radar. And it is a blip, butit is not forgotten. Because Square is a

product of the Internet age, our purchaseis captured and analyzed alongside everyother purchase being made with Square.Somewhere behind closed doors, Squareis watching the pulse of grassrootscommerce happening in real-time.

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$41 M

A DAY

$2M

AN HOUR

AVERAGE

TRANSACTIONS

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In 2011, the New York Times publishedan article comparing data to coal andiron ore of the Industrial Revolution.The McKinsey Global Institute declareddata to be the next frontier for innova-tion, competition and productivity. Itsthanks to startups like Square that smallbusinesses now have access to dataas well. Until recently, small businessowners had only pen and paper to track

transactions. Now they have access todigital tools that are comparable to thosebeing used at large corporations. Withanalytics tools now in their hands, busi-ness owners can sift through historicaltransaction data tond insights that willhelp optimize inventory, hours, stang,and promotions, all of which can ulti-mately result in better customer service.Anyone can now mine for oil.

DATA IS THE NEW OIL!


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How many cups did they sell that day,or what percentage of people boughtbiscotti? What was their busiest hour;

which is their busiest day? A keydierentiator in terms of running asuccessful business is understandinghow it is performing and gettingclear, simple data that aids decision-making... We put a high premiumon the data that we are giving to our

merchants, so that they can build theirbusiness and ... recognize and treatcustomers better.

JACK DORSEY, CEO SQUARE 5


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LevelUpest. 2011

They say they are:

The fastest (& cheap-est) way to acceptmobile payments and

engage with customerswith a high-tech loyaltyprogram.

What stands out:

By integrating thepayment system into theapp itself, customers whohave downloaded the appand linked their creditcard information havethe point-of-sale and theloyalty card both withintheir smartphone.

The damage:

2% per transaction

Found at:

www.thelevelup.com

PunchTabest. 2011

They say they are:

A service for publish-ers, retailers and ap-plications vendors to

develop an integratedrewards program withno development ormarketing cost.

What stands out:

The platform incentivizesonline activity fromcustomers, awarding themredeemable points forsharing promotions oversocial networks, signingup for email newsletters,

visiting webpages, andparticipating in online

sweepstakes.The damage:

Starts at $99 /mo

Found at:

www.punchtab.com

Bellyest. 2011

They say they are:

A universal loyaltyprogram that oersexceptional rewards at

the businesses you love,giving boring loyaltycampaigns a good kickin the pants!

What stands out:

In addition to thestandard points systemthat businesses customizethrough their individualiPad scanners in-store,the Belly email newsletterdelivers customerspersonalized Belly Bitesdiscounts and incentives

towards places theyhavent yet been to.

The damage:

Starts at $79/mo

Found at:

www.bellycard.com

FiveStarsest. 2010

They say they are:

A card that helps localbusinesses build digitalconnections with their

real-world customers,resulting in increasedengagement and ulti-mately more business.

What stands out:

FiveStars integrateswith existing point-of-sales systems, requiringcustomers only carry acard that is scanned bythe business sta. Oncea customer has scanned,they can be reached withdemographic- tailored

promotional messagesover text and socialchannels that they havelinked to their card.

The damage:

Varies

Found at:

www.vestars.com

Sweet Toothest. 2009

They say they are:

A turn-key points andrewards app for youreCommerce store.

What stands out:

Oers the backend fora fully-customizablepoints system to rewardcustomers for their onlineactivity.

The damage:

Starts at $49 a monthfor startups, $127 amonth for small busi-nesses, and also oerscustom packages

Found at:

www.sweettoothrewards.com

LoyaltyProgramsfor the SmallBusiness

A number of digitalloyalty programs nowoffer solutions thatlet small businessesleverage customer data,helping to lock in thatvital 20% of customers.

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Another way data is helping small busi-nesses become more eective is throughreinforcing customer loyalty programs.Classic marketing theory tells us that80% of a companys prots come from20% of the customers. It goes withoutsaying who to invest in. New digital ser-vices not only help identify this 20%, butgo a step further to craft highly detailed

proles of individual customers. Insteadof simply rewarding a customer with afree cup of coee every sixth purchase,you can now oer their favorite snackwith a handwritten note.

Square and similar services are mak-ing life a whole lot easier for small busi-ness owners. Through mobile interac-tions, it is now easier than ever to gather

timely and reliable information aboutcustomer behavior and preferences. Butthere is still an elephant in the room.Taking action can be risky, even with anabundance of information. Developingnew products and services consumeboth time and money, resources thatarent exactly easy to come by. Are thesedigital tools really helping us innovate

fast enough or are they just optimizingour existing strategies? Real transforma-tion exists outside of the box.

Documents

MAKEWAY - The First Steps: An Introduction to the Future of Small Business