Where’s the help for small businesses?

Well, I took a few days off, but the country’s economic implosion didn’t. In my post-holiday look at the news, I’ve found that some other people are upset about the same thing that’s been infuriating me: Though the U.S. depends heavily on the jobs and commerce generated by small businesses, small-business entrepreneurs and owners get next-to-no help from anyone with money – not governments, not venture capitalists, not business-development organizations – not even in this age of bailouts. 

As Simona Covel of the Wall Street Journal wrote Friday:

 ”For many small businesses across the country, these are scary times. The dramatic pullback in consumer spending is only the latest blow threatening to push some strapped small businesses out of existence. Customers are paying their bills late, cutting off cash flow, the lifeblood of a small business. Even healthy companies are being choked by the lack of credit lines and bank loans. Others are still reeling from several years of high raw-materials prices.

“In a recent survey from the National Federation of Independent Business, more than a quarter of small business owners said the current economic downturn is threatening their ability to survive. Nearly half of respondents said slow or lost sales are their most immediate problem.

“In the months ahead, ‘we are going to see small businesses that were marginal go out of business,’ says William Dunkelberg, NFIB’s chief economist. ‘We’ve never seen sales trends as weak.’

“Small businesses are a driver of the U.S. economy. In the past decade, small businesses — those with fewer than 500 employees — have created 60% to 80% of the nation’s net new jobs each year, according to the Small Business Administration. More than half of Americans are employed by a small business, and these companies are responsible for more than half of the nation’s nonfarm private gross domestic product.”

I have to ask: Does it make sense to anybody that even in better economic times, community and state business resources go almost exclusively to luring and nurturing big technology ventures? And that since times have gotten really bad, all the help is going to the giant corporations that messed things up in the first pace?  

Where are the investments in the diversified array of smaller companies that every economy needs? Haven’t we learned anything from all the factory towns that have collapsed because the one big employer pulled out or went bankrupt? Why are our government development efforts and venture foundations and angel investors putting all their eggs in the tech-manufacturing basket? Even the greenest portfolio manager would recognize that as a dumb move.

Maybe it’s time we small-business owners demanded smarter and fairer investment strategies from our cities, states and nation.

As Covel’s story notes, ”Many are frustrated that Washington is bailing out some of the largest companies and banks. ‘Our members are angry that the federal government is giving taxpayer money to big companies that have been horribly irresponsible while small businesses are not getting the money they need to keep their doors open,’ Margot Dorfman, chief executive of the U.S. Women’s Chamber of Commerce, told the House Small Business Committee earlier this year. The government should set aside money specifically to assist small businesses, she said.”

The small-business community needs to speak up now – and not just owners, but anyone who works for or buys from a small business. We all need to remind our mayors and council members and state representatives and governors as well as our national leaders that small businesses are a big part of our nation’s economic survival and future.

Imagine how many small businesses and jobs that $150 billion AIG bailout would have supported. Now pick up the phone and call your elected leaders.

The truth about greed

I’ve been reading someone else’s blog. It’s good for me to come out on the porch once in a while for air.

The particular blog I was scanning last night is called How to Change the World. It belongs to a West Coast venture capitalist named Guy Kawasaki. You may have heard of him – he’s not only involved in outfits such as Garage Technology Ventures, but also writes a column for Entrepreneur Magazine and has come out with a number of books including “The Art of the Start.” 

He’s clearly a very smart and unspeakably successful man, from his Stanford and UCLA education to his scalpel of a wit. Just read (and weep over) his two posts from January 2006, the Top Ten Lies of Venture Capitalists and the Top Ten Lies of Entrepreneurs, to discover the truth about the game of getting funded. Like me, you may immediately be visited by an urge to lie down on – or better, under – your bed and come out long enough to put in just the few late-nightly hours as a janitor that’ll keep you in Cheetos and Netflicks for the rest of your numbed, thwarted life.

But even as I noted his creativity as a writer, I was gobsmacked by the realization that venture capitalism  – at least as practiced by the firms I’ve heard of - is actually anti-innovation.

You heard me. They all claim to be investing in and encouraging innovation, but they’re not, they can’t be  - because all they care about is making a bazillion dollars. What that means is, they really aren’t looking for the most interesting ideas, the ones that could have the farthest-reaching good effects on life, society or the planet, but only on the most lucrative ones.

And what makes something lucrative these days is imitation. Yes, imitation – the cost-effective, mass duplication of someone else’s original, creative and successful idea.

That’s why all the venture capitalists are looking for another Google. Just as all the publishers are looking for the next ”Harry Potter” series or ”Chicken Soup” franchise. And just as all the Hollywood producers are looking – and have looked every single year since moving pictures were invented -  for the next cookie-cutter version of the suburban-family sitcom.

When by some fluke, someone invents something truly new or different that seizes everyone’s imagination and becomes - often unexpectedly – a commercial phenomenon,  all the buck-hounds want to do is copy it and cash in. So no one really searches out and carefully fosters new and unique writing talent the way Max Perkins did long ago at Scribners. No one in Hollywood tries any really daring content – only the little independents have the guts and inspiration to walk on the edge where the material rewards are dubious, but the impact on minds can be huge.

It doesn’t matter what industry you’re talking about: The true “next thing” will actually come, as it almost always does, from a person or couple of people with nothing but imagination and nerve, who somehow manage to create their idea and win attention for it. And as soon as it catches on, the money-worlders will be rushing around trying to find something just like it to exploit, instead of trying to help other creative people invent another true “next thing.”

That’s not changing the world. That’s arresting its development. 

I’m not saying that those who do attract venture capital are without creativity themselves. But their ideas have to fit such a narrow definition of desirability – software tech, biotech, $50 million in four years - that only a very few of them ever win support. 

Think of all the other kinds of ideas that will be ignored or lost because the guys with all the billions have tunnel-vision. 

Please. I would, but it makes me ill.