Tag Archives: Emergent Research

How to Explain Lies, Damn Lies, and Statistics

Don’t get me wrong: I like research. Survey information is grand. I just say don’t bet the store on it. Use it to educate your guesses, but only as long as you stay skeptical. Read it, consider it, but don’t believe it.

Mark Twain said:

There are lies, damn lies, and statistics

Blogger and business researcher Steve King, a sometimes-Twain-like research analyst (well, a smart person who lives in California, at least) gives a great example in his recent post Why Surveys Show Wide Differences in Small Business Social Media Use on Small Business Labs. Steve is a researcher, one of the founders of Emergent Research, which does a lot of work for Intuit.

Steve pulls up two surveys with starkly different results. The Wall Street Journal recently reported that 70% of small business owners think social media is important.  But a Citibank survey said only 36% of small businesses use social media and a mere 24% have found social media useful for finding leads or generating revenue.

What’s up with that? Methodology and sampling techniques, Steve explains. The survey that was big on social media was taken from people it found online using Twitter, Facebook, and other social media. The other one was a telephone survey.

So, as they say, “no duh.” Most of the business people who use social media think it’s important. Most of the ones caught on the phone don’t.

The point is that both surveys are valid in their specific context, both were done professionally, and both can help you understand what a defined group of people thought – or told survey takers they thought. But they contradict each other. So if you’re using research, use it well, explore the assumptions, look for the built-in slants, and take all of that into account.

Humans make decisions. Statistics don’t.

Small Business Labs on Trends for 2011

Sure, there are lots of trends pieces going around these days, but Steve King of Emergent Research is the best expert I know on researching trends and putting them into sensible pieces. His company does some really good trends research that is often published by Intuit. , so I’d like to share his Top 10 Small Business Trends for 2011, some of them with my comments.

First, four major economic trends:

1. The small business economy recovers from the great recession.

From your lips (or keyboard), Steve, to God’s ears. May you be right on this one.

2. Variable cost business models:  Small businesses will continue to focus on cost containment, bootstrapping and business flexibility in 2011.  More small businesses will shift from fixed cost to variable cost business models, adopting a pay-as-you-go approach to minimize cash requirements and increase business agility.

3. Small firms reinvest U.S. Manufacturing

That’s a surprise to me. I thought U.S. manufacturing becomes less competitive. But Steve points to the weak dollar, technology, growing world markets, and the web giving more worldwide access to smaller companies.

4. Alternative financing

He cites “merchant advances, micro lending, community lending, crowd funding, and factoring.” I bet alternatives like crowd funding take longer, though, because of securities law, fraud, and those worries.

Second, five social and social media trends:

5. Social media moves to the small business mainstream.

6. Social commerce: the amazing growth of Groupon and other social commerce sites in 2010 …

7. Small businesses friend Facebook. …. small businesses are embracing and adopting Facebook as a key part of their web presence, and in growing numbers using Facebook as their primary website.

Myself, I’d like to see more examples.  Is this proving to be good business?

8. New localism continues to flourish

9. Freelancers realize they’re small business owners

It’s about time.

Finally, one technology trend:

10.  Working in the Cloud: No trends list would be complete without mentioning mobile, cloud, local and social computing.

No surprise there.

So I give special attention to Steve’s trends posts because 1.) that’s what he does for a living, mainly; and 2.) he’s good at it.

If You Are Raising Money, You Need a Business Plan

There was a nice piece in Small Biz Labs yesterday, in which Steve King notes that you should have a business plan whether or not you expect investors to read it. He offers this summary in that post:

In my opinion, the best way to prepare for the pitch process is to develop a business plan. Preparing a plan organizes the entrepreneur’s thinking, requires going through all aspects of the business and helps to identify important issues facing the company.

Agreed.