How to up your eCommerce game with the Human Scale Business Network
We recently sat down with Dave Bayless and Laura Black, co-founders of the Human Scale Business Network. They spoke about how their network is helping connect small-scale entrepreneurs selling products online, where these entrepreneurs can discuss their experiences and challenges to navigating the various stages of launching and running small eCommerce businesses.
Find out more about the Human Scale Business Network at network.humanscalebusiness.org.
KIVA: What is the Human Scale Business Network and who is it for?
LAURA: It’s a new online community for founders of small companies that make original products sold to consumers online. The network is really built around mobile apps so access is easy and a natural fit with the busy lives of these people.
We coined the term 'Human Scale Business' because we were encountering people who didn't necessarily want to grow their businesses as fast as possible, which is usually the way entrepreneurial success is evaluated.
There's an interest in broadening this notion of what is a successful entrepreneur to include people who value profits, but not just profits.
The other nuance in Human Scale Business is that the products that these micro-enterprises sell, sometimes they are just 1 or 2 people in quite a healthy and viable business, are often created out of their own experiences in problem-solving or out of their own passions. There is usually a very rich human story behind the creation and design of the product and who it's for.
DAVE: The real purpose of this network is to stimulate conversation: for that you need to go where people are. Having a website with rich features is nice, and the network has that, but what it's really built around is to allow people to access the other members on the network and the associated content through a phone app.
It doesn't have to be just another task for them, but is instead more likely to become a part of their day. It's much easier, as a consequence, to ask a question that's important right now, rather than putting it off for a day or a week. Users can immediately put up a little poll or see what other people are doing in a particular situation. It's a technological subtlety, but we think it's an important part of making this a living, breathing, useful network.
KIVA: How can entrepreneurs benefit from using the Human Scale Business Network?
LAURA: Running your own business, especially focused on eCommerce, can feel lonely as it's by nature rather isolating. We believe that there are tremendous benefits at a number of different levels:
it's validating to connect with people who understand what you're doing and what you’re up against in managing your supply chain, your digital marketing, and your distribution and fulfillment.
Additionally, a lot of business education is focused on people who are going to be employees of very large companies. So another aspect of allowing people to connect is to share business education that's appropriate for these human scale manufacturers or sellers of original products through eCommerce, which is often a quite different set of applications of business principles and concepts.
KIVA: What do you think is the biggest challenge facing entrepreneurs selling their products online?
DAVE: The biggest challenge is a combination of factors. We've gotten very comfortable with the notion that technology has changed our lives profoundly over the last 20 years. We take it for granted that somebody can create a very specialized, niche product and use eCommerce to reach a global market. It makes the pursuit of a niche product-based business even possible, especially outside the largest metropolitan areas.
The barriers to entry for these kinds of businesses have fallen dramatically: 1 or 2 person operations can really be successful. But the inherent complexity of these businesses hasn't fallen at all; if anything it's gone up.
You've got to deal with product development; you have to create world-class products to be competitive; you end up dealing with complex manufacturing and supply chain issues; you've got the broad challenge of marketing; you've got digital platforms and eCommerce technologies on top of that; and then you've got to provide customer support. And all this has to be done in a way to keep your fixed costs down, otherwise you won't be able to compete in a narrow, niche market.
All this simultaneously is where the real challenge comes, and a lot of the reward too. Just because it's easy to get into these businesses doesn't mean we should think they are simple or easy to manage businesses. To the contrary, they are really complex.
KIVA: What are the three most important things an entrepreneur can do to effectively address this multitude of challenges?
First, make sure you have a differentiated product. If you don't, you'll get run over by competitors who can produce the same or similar products at greater economies of scale and undercut you.
With a differentiated product there is a market, it may seem ridiculously specific, that values your product specifically. Second, eCommerce allows you to reach out to your specific target market, but you need to work hard to understand the consumers in that market. This includes where they hang out, physically or online.
Lastly, when you are doing digital marketing, learn to communicate what you are doing and why you are doing it in a personal and authentic way. Customers in the specific target markets who value these differentiated products want to know the stories behind them.
And while the entrepreneur may ask themselves "who would want to know that about my workspace or why I designed the product that way?", that's exactly what these customers want: they are looking for connection.
KIVA: How do you think Kiva entrepreneurs, people who are either in the process of getting or have already gotten Kiva loans, can best use the Human Scale Business Network?
DAVE: I see Kiva funding as an early step on what is going to be a long path. Especially if you are making a product and are going to be successful, your needs for financing are going to be continuous; it's a part of the life of that kind of business.
Learning about the next category of challenges that you'll face, it's really useful to be able to plug into a network of people who are walking alongside you, and maybe walking a couple steps ahead of you. It can save a lot of time (and pain!) to learn vicariously.
We'd encourage Kiva borrowers of this type, to join the network and share their experiences and learn from others. It's not just a problem-solving platform. It's also good to know that you are not alone and there are people that truly understand the challenges you face in the context of building a sustainable, rewarding business.
LAURA: I see the Human Scale Business Network and Kiva as part of an ecology to support these small-scale businesses selling online.
KIVA: If you could say one thing to these small-scale entrepreneurs selling their products online, what would that be?
DAVE: It may sound a little bit strange, but I'd advise people to work hard to anticipate the challenges of success. Early on when you are starting a business, the natural, and necessary, focus is on sales and marketing. You don't have much by way of resources and your time is stretched thin, and you are primarily compelled to figure out how to sell. But hot on the heels of that initial success comes some real challenges.
And too often people think of these, somewhat dismissively, as "high-class problems". But these are real problems of growth: managing a supply-chain beyond making the first batch, managing your marketing and distribution channels, dealing with administrative overload (pretty soon the little accounting tasks can become overwhelming).
So these high-class problems can soon conspire to kill your business. Of course you have to deal with the most pressing problem, but thinking ahead a little bit, trying to peer into the fog of the future, can give you time to anticipate and to create options. When you have choices you are much more likely to sustain success, and not find yourself painted into a corner.
LAURA: Maybe it underscores everything we're doing and saying here: we have tremendous respect for these small enterprises. They are complex; some people think that small business is easier somehow, but we know that it's not.
We have a lot of passion for helping people preserve their sense of choice, to grow at the rate they want to. To reinforce something in what Dave said: sometimes to preserve the sense of choice requires managing this complexity and thinking a little farther ahead in order to to give yourself room for the options to satisfy the desires that led you to create the business in the first place.