A small group of us in Ubud are busy building a new startup aimed at helping small business achieve the gift of time. All our surveys and our experience tell us that owners of the small business are clear that having free time is far more valuable to them than additional money. Time to have with their families, time to take a holiday, time at work just to have 10 minutes to stop, relax and dream. They dream of freedom.
Like everyone else, we want to settle on a market demographic to define our target customer. What type of small business should we help? We decided against categories of business industry, we decided against locality, we decided against gender; we settled on the revenue side of the business. Then we started to argue about who should be included in that target and who not. On one side it was a business earning at least $500,000 per year. On the other, it was starting much lower, at $100,000 per year.
It has been difficult for us to find demographics on Bali businesses for comparisons, but we looked at the American model because we are looking at a global business.
In the US there are some 30 million small businesses employing less than 100 people. Of those, 22 million are nonemployers or sole traders. 21 million of these earn less than $100,000 per year. The average income for non-employers is about $44,000 whereas the average for those with staff is around $3.6 million.
On the face of it, very few nonemployer businesses earn sufficient to escape the poverty trap – if you want to get some time for yourself, then you need to grow your business sufficiently to be able to employ others to help do the job.
The Traditional Joe
Which brings us to our first tale, about a sole trader who is an excellent alternative healer, called Joe. Joe came to see me about how I could help him solve his problem. He realized he was stuck in a hard place, busily managing 6 consultations a day 6 days a week. But he was still having problems supporting his family and paying utilities. Other luxuries were scarce.
Joe kept the details of his appointments including clinical notes in a big notebook that had a few years of very valuable information in it if he could find some means of converting the raw data.
I suggested to Joe that he needed to look at how he could convert a standard emergency treatment into a preventative lifestyle support system for his clients. There is no better time to convince a grateful healed patient than immediately after her treatment. Take some time to sell her something, anything, even a back scratcher – but preferably a subscription to a new way of life.
He needed to be able to capture client’s emails and nurture them in a marketing sense. I discovered he didn’t know how to use an Excel worksheet, so built him a simple but effective database for his laptop where he could record patient details, symptoms, and treatments. After showing him how to use it, I sent him on his way to start his new approach to his business. A call a few weeks later found that he hadn’t quite got around to applying it yet. He really appreciated my offer to help him get started for no additional fee and said he would get back to me. Of course, it never happened. Joe still has his trusty notebook and his grueling consultancy schedule.
The Global Healer
In contrast to Joe is Jerry, who has taken an entirely different approach to his alternative healing practice. After completing 5 years of study, Jerry determined that he would be earning a minimum of $100,000 in his first year. When I met him he was presenting his business model in Hubud.
Jerry used a PowerPoint presentation to help describe his growth from that bold start to where he now employs six other practitioners. He works one week in Australia at his practice and then comes to Bali to live for the rest of the month. Every morning here he holds a Skype session with his practice crew, reviewing any problem cases and ensuring all is well in his world. Jerry has turned into an owner rather than a manager and has chosen to take the gift of time.
But Jerry is not yet finished his freedom trip. While he was presenting to us he used that opportunity to hold a webinar with his course of worldwide practitioners who were learning (for a fee) to do what he is doing. He ran the webinar with his webcam on his laptop and a decent microphone. Part of what he is doing is developing an electronic magazine on his area of healing, available for iPad from iTunes. He uses a freelancer somewhere in Europe to source the content for him, based on his editorial direction for each issue. In time he can let go his daily hands-on consultancy practice overview and get to his four hour work week.
Joe and Jerry are both chiropractors, both providing brilliant treatments. The similarities end there. They are both in business but one hasn’t come to terms with that reality yet.
A Collective of Healers
Our third tale comes from Dr. Clayton Christensen, the Professor of Business at Harvard University. In one of his videos about the disruption of the medical business model, he introduces his friend James. Poor James has an ailment that has perplexed every medical specialist he has been to see. He’s now taking 100 pills a day but still suffering medically and financially. Then someone suggests he goes to visit a medical practice in Texas. There he is shown into a room and there is not just one practitioner in there but five, all specialists in different modalities.
They have James describe his symptoms and history and current medications then hold a joint discussion about his case in front of him.
After some time they come to an agreement. The spokesperson for the group explains to James what they have discovered collectively that nobody in his past individually could do. And what’s more, he’s told the treatment involves just one generic pill.
What’s the Future for Joe?
Maybe one day Joe can join a collective of alternative practitioners, including perhaps physical, nutritional and emotional modalities. Then maybe he won’t have to be concerned with marketing and systems and finances.
In any normal medical practice, there is always an assistant. Perhaps the regulatory need to track drugs and subsidies has led this to be standard practice.
So What’s Our Best Startup Demographic?
Who would you choose to set your business at? Would it be Joe, who can’t do the basics, is unlikely to ever buy anything else from you, and won’t refer you to anybody else to help you grow your business?
Or would it be Jerry who will be much more demanding in service delivery but will reward you with upsells and introductions to his colleagues and friends?
Defining customers by their income level is flawed too; Jerry would have been a keen subscriber to our service while he was still growing to $100,000. Our real demographic is those people who are eager to improve, regardless of their income level. The others will likely break our hearts.