Publishing and micro-business
On the ‘About’ page I say that “Monographer’s Blog is designed to contribute to debates on publishing, creative industry, and micro-business, and to act as a resource for publisher education”.
To date, I’ve said very little about the ‘micro-business’ bit. There is a reason for this – and it certainly isn’t that I think micro-business is uninteresting or unimportant. Rather, it is because of the lack of a shared language or public conversation.
Even the selection and definition of that noun ‘micro-business’ is problematic. The standard term amongst policy-makers is small or medium-sized enterprise (SME). Yet this category covers a huge range of enterprises. Though there’ no standard definition of SME, the point applies whichever definition you apply.
Take, for example the European Commission’s taxonomy. The EC’s criteria (w.e.f. 2005) for a medium-sized business are 51-250 employees and a turnover of €10m-50m. For, for example, a freelance proofreader (say, workforce of 1, turnover of €25k) to be thought of as an ‘SME’ alongside businesses of this scale just make no sense.
To its credit, the EC taxonomy attempts to distinguish not only between small and medium-sized enterprises, but also between small and micro enterprises. A micro enterprise, according to the taxonomy, has no more than 10 employees and a turnover of no more than €2m. Yet to our freelancers even some of the companies that, under this definition, come within the category of micro business would seem huge and very different species from themselves.
Policy-makers and advice-givers who think with these very broad categories risk simply speaking over the heads of the businesses at the micro-est end of micro. Much of the advice available for ‘SMEs’ – how to attract venture capital, for example – is simply irrelevant at this level. The type of advice that would be useful – what types of open-source software are useful, for example – often isn’t there (“What, you mean there are businesses who won’t or can’t pay £50 for a software licence?”).
The sort of tension this sets up is captured in a recent (12 Sept 2011) blog post about a local enterprise partnership ‘summit’ in Yorkshire:
The importance of SMEs was mentioned several times, but they were talking about 10+employee, high growth startups willing to put together funding bids and set up KTPs (knowledge transfer partnerships) with universities. The kind of startup that allies itself with the economic development infrastructure and pursues every penny of public funding that it can. There was little to no indication that anyone had given any thought to the potential of the regions enormous number of micro-enterprises and the fact that these are the hot bed from which the higher growth businesses will over time emerge. We are back to what Drucker called ‘wanting the top of the mountain without the mountain’.
The implicit assumption was the regional economy would remain one based on traditional models of ‘employment’, a white and blue collar region rather than a region where large numbers of self organising free agents contributed significantly. What kind of employer skills board is going to define the skills and attitudes needed to escape employment by others but actually shape your own portfolio of work?
I wasn’t at the event, so I have no way of knowing how accurate this account is – but I do recognise the phenomenon it describes. The very word ‘summit’ heralds a gulf between sectors.
Unfortunately, it’s easy to overlook the information, advice, or guidance that does exist for specifically for micro-businesses, for there is a lack of clarity over search terms. Micro business/micro-business/microbusiness – which is it? All have currency. As do micro enterprise/micro-enterprise/microenterprise (where ‘enterprise’ might or might not function as a synonym for ‘business’).
This should matter to the publishing industry. The public perception of publishing might be dominated by the multinational media corporations – the kind of companies that get photographs of glitzy book launches onto the pages of The Bookseller – but relatively low barriers to entry mean that, at the other end of the spectrum, the publishing industry is a cottage industry. The ecology of publishing depends on both ends of the spectrum.
To date, the only blog I’ve come across that really ‘gets’ micro-business is Vistaprint’s Micro Business perspectives. Take, for example, its post on the distinctiveness – specifically, the distinctiveness of ambition – of micro-businesses:
The majority of small businesses in the U.S. are people trying to make a living at what they do. Most aren’t interested in becoming the next Microsoft or Google. For every wildly successful enterprise that started in a garage, there are hundreds of hair salons, plumbers, carpenters and landscapers that start up every day, hoping to simply support themselves or their families. While the term “entrepreneur” sounds catchy and interesting, it shouldn’t necessarily be equated with “small business.”
There is an empathy here. Yet, even so, the research being cited misunderstands what the micro-businesses are saying about ambition. It seems to equate ‘ambition’ with ambition to grow in terms of the kind of metrics that the European Commission uses in its taxonomy – headcount, revenue, and asset value.
The risk here is of not recognising other kinds of ambition: the ambition to improve margins, for example (in order either to make greater profit from the same revenue or the same revenue from fewer hours of labour), or the ambition to reduce risk or improve sustainability. In publishing there have been plenty of maximisers, from Gutenberg to Jeff Bezos. There are plenty of satisficers too.