I’m traveling in Russia this week. The relationship between this trip and the Roadside MBA can be summarized in this picture.
First, note that it is snowing and [expletive deleted] freezing, just like a few days in Kansas I remember well as we drove around talking to local small business people. But more importantly, you can see the incredible reach of the big American multi-national. In addition to many retail options from the U.S. (and I was glad to see we are successfully exporting clogged arteries, as there are plenty of Cinnabons, McDonalds, and Sbarros to go with the Dunkin Donuts), I was at a dinner last night with Russian managers of HP, PriceWaterhouseCoopers, and others. The challenges of competing with the big boys in the U.S. are magnified by the fact that many of these companies get even more economies of scale and resources from their worldwide operations.
One response for some small businesses is to use the same strategy – expand your business overseas. But that’s not really an option for most of the entrepreneurs we’ve spoken to. So the more likely response to the big boys’ increased size and global scale is to go small, local, and personal. If you can’t open an outlet of your donut shop (or children’s furniture store or accounting firm) in Moscow, Russia, make sure you have something to offer the residents of Moscow, Idaho that Dunkin Donuts (or Wal-Mart or PWC) can’t offer.
As an example, we recently spoke to a guy who owns a small sporting goods store in the Midwest. He could not possibly compete with the local Dick’s Sporting Goods on price or variety. But he knew when the local high school teams were buying their equipment and he ran his ads and his sales at just the right time while the local Dick’s ran theirs a few weeks late. Local knowledge can still beat global reach.
In Moscow (Russia, that is), that apparently means knowing the right street corner to place your living flower ads. Sure this guy has to look a little silly, but he’s one step ahead of FTD.
Enjoy the Spring weather that I’m missing. And, for now, Das Vidanya.