The technology industry has spent the better part of the past decade obsessing over the consumer. The growth of an ad-driven business model drove entrepreneurs and investors to build businesses that aggregated networks of consumers, providing new ways to communicate.
But recently, the tide has started to turn. A groundswell of new technology companies are building services that rethink the way local businesses buy, sell, and even pay employees. More and more, these companies are networking businesses, allowing small businesses from across the country to share and pool assets in a way that was never before possible.
Take the two year-old project from Constant Contact co-founder Eric Groves and Venkat Krishnamurthy, the mind behind dental giant Invisalign. Called Alignable, the Boston-based firm allows small businesses owners to share information, ask questions, and seek answers from other merchants nearby (as well as those in similar industries across the country). Think Nextdoor — but with worried store owners instead of overbearing parents.
In the last two years, the company has expanded its network from a small pilot in a Boston suburb to nearly 3,500 communities across North America. Groves, the Constant Contact alum who now serves as chief executive, says the project aims to provide local business owners with a more efficient and comfortable way to share information amongst themselves in order to compete with threats from big box retailers, ecommerce companies and others.
“There’s a pretty significant phobia among local business owners to reach out and bother another local business owner and just show up and introduce themselves,” says Groves. “They join the chambers of commerce and other groups to try to build those connections. At the easiest state of interaction, it’s just the ability to unlock access to local information.”
Groves says business owners often use the site as a business development tool. A host of a local soccer tournament might use the tool to connect with other vendors that could sell goods at the event. But the key activity — both for local businesses and Groves’ own business — is the ability to ask questions: “Who did you use for this service?” or “How did you get around that regulation?”
The company began to play with its business model earlier this summer. In July, the team started to partner with technology firms who sell to small businesses, convincing the companies to share the site with their own users. In return, Alignable tags those users as “experts” with that technologies, and other users can ask them about their experience using the product.
Some partners pay a revenue share; but today, the company is mostly focused on expanding the company’s user base and helping demonstrate the value for vendors, says Groves. Eventually, the company plans to expand the promotions product as well as possibly build a freemium offering that could allow a business to connect with a wider group of business owners — say, in another city or county.
Competitively, Alignable is unique — albeit, not alone. Denver-based Closely has built an app called Perch that allows business owners to monitor competitors’ social media, discounting, and other digital activity. The company is more or less betting on the same business model, helping vendors reach small businesses through paid recommendations.
But the concept of networking small businesses has started to permeate other small business technologies as well. For instance, a handful of startups offering universal loyalty programs use the collective reach of small businesses customers to effectively aggregate the frequency that is needed to make loyalty programs effective for consumers. These services also share data between its businesses, allowing a small business to access insights into consumer behavior at a scale that was previously kept for massive brands such as Starbucks.
Eventually, these networks could substantially impact the economies of scale that have dictated certain industries for years. As more business adopt cloud-services, it becomes easier and easier for technology companies to build software that helps coordinate these offline economies, allowing for business — both near and far — to work together and share resources in ways that were previously impossible.
Steven Jacobs is Street Fight’s deputy editor.
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