April 2, 2001 Can You Trust Corporate America to Help Run Your Small…

April 2, 2001


Can You Trust Corporate America to Help Run
Your Small Business?
Yes!...and no. We look at big companies--who gets it, who doesn't,
and why it's so hard...
Did you ever try to get a new phone line installed at your business? Not 20 lines, just one. Or have you had the pleasure
of trying to reach a living, breathing customer service rep at your friendly computer giant?

You could die first.

For entrepreneurs, these are Rodney Dangerfield moments. You yearn for a little old-fashioned respect and
understanding from Corporate America, and what do you get? Aggravated, mostly. "Large businesses trying to target the
small-business market haven't quite gotten it," says Romanus Wolter, director of the San Francisco Small Business
Development Center.

It's not like they haven't had time to figure it out. John Cicco, a Murrysville (Pa.)-based consultant who tracks small-biz
trends, has seen the big guys bumble and fumble their way through this market since the mid-'80s, when he began
surveying small companies on their experiences with big ones. How does he describe the commitment to small
businesses in Corporate America? "Decisions are made on the damnedest of whims," says Cicco. "Somebody was
impressed by somebody who said we've got to do something about small business, and they say, `Hell! We'll do
something about small business.' Then the next person comes in and says, `Why are we spending all this money on
small business?' And the program gets killed."

THE ATTITUDE'S a bit mind-boggling, really, given the sheer size of the small-biz market and the attention big
companies are lavishing on it these days. This year, small businesses will spend in the neighborhood of $5.5 trillion on
goods and services, says the Small Business Administration's Office of Advocacy, and $240 billion on new technology
alone, says the Cahners-InStat Group. That's caught the attention of some blue chip companies: Gateway Inc.'s (GTW )
founder Ted Waitt is extolling the power of small business in a new TV commercial, and Oracle Corp. (ORCL ) has just
launched an online services and funding marketplace for small companies. Mighty Microsoft Corp. (MSFT ) spent $150
million developing its small business effort last year.

O.K., it's flattering. But should you bet your company on the idea that the big guys will get it right this time? The answer is
a definite maybe. There are signs that some big companies are getting the message, and BusinessWeek Small Biz has
identified a handful that consistently get high marks from entrepreneurs (table). The winners generally see small
companies for what they are--part of a very diverse group that rejects one-size-fits-all solutions and demands good
customer service. The laggards remain hamstrung by sheer size and bureaucracy, if not a complete lack of
understanding of what entrepreneurs need. Some examples from the Faux Pas Hall of Fame:

-- The Condescending Parent. Most companies have learned to avoid phrases like "small fry" that seem calculated to
insult, but two summers ago, a print ad from MindSpring Enterprises Inc. set a new low. It featured a baby's head and the
headline, "Some Web site customers need their hands held." Just below, the copy read, "Heck, we'll even burp them and
wipe their bottoms." Inviting, huh? In truth, entrepreneurs as a group are better educated than their peers in big
companies. A spokesman for EarthLink Inc. (ELNK ), which now owns MindSpring, says the company "probably would
not have gone with that ad" today.
-- The Giant Roadblock. Even when big companies try to be helpful, their bureaucracy can be maddening. David E.Y.
Sarna, CEO of 22-person ObjectSoft Corp. in Hackensack, N.J., wanted IBM (IBM ) to install and maintain his computer
kiosks. It took him three weeks just to hook up with the right division. Then, IBM work rules made it too expensive, forcing
him to change the kiosks' design. Eventually, he was satisfied with Big Blue's service. IBM's explanation: Its work rules
simply follow federal guidelines.

-- The Endless Maze. Toronto-based Loofah Communications, a 29-person marketing company, wanted to add four
phone lines to the six it had on a system that can handle up to 24 lines. But Bell Canada Inc. (BCICF ) insisted the
company needed to install a new $10,000 phone system, trash the old phone sets, and buy new ones for $200 a pop.
"The swine!" says Loofah's Matthew Wensley. When he said he wasn't about to install a $10,000 phone system,
Wensley was told he would have to wait several weeks for any service. A request for lines that bypassed the old system
wasn't answered. So he found a local company that did the wiring in five days. The cost: just $350. A Bell spokeswoman
says it's "unfortunate" that Loofah wasn't pleased, and that Bell is beefing up attention to small business this year.

Why do big companies stumble? Often, the execs heading up corporate small-business programs aren't plugged into the
culture or problems of entrepreneurs, says Cahners' Kneko Burney. "They come up in the ranks and only know how to
sell to big companies," she says. And when a rising star at a big company lands at the top of a small-business effort--
someone like Cisco Systems Inc.'s (CSCO ) Eugene Lee, who ran small-business marketing from September, 1997, to
December, 1999--they soon move on to more glamorous pastures. Lee now heads up Cisco's Internet communications
software group.

EVEN WHEN BIG companies do come up with products or services you really need, such as high-speed Internet
access, they tend to forget that small-business owners usually want plenty of support after the sale, says John Warrillow,
a Toronto-based marketing consultant. Big clients get taken out for golf or lunch, while the rest deal with resellers. Small
companies, says Warrillow, "fall into this no-man's-land, which means they get crappy service."

How do you locate the winners? We can't guarantee that any particular company will treat you like gold, but we did find
some common traits in our search for the best.

-- Straightforward product offerings. A corporate product or service should make it easier for business owners to achieve
goals, says Wolter, not tie them up in fine print. He singles out PC vendors that offer a big rebate but lock buyers into
long-term contracts with an Internet service provider, even though they probably already have an ISP. Dell Computer
Corp. (DELL ) has done this, but its site lets you configure a computer to your exact specs and get pricing before you've
committed to anything--with or without an ISP.

-- A dedicated small-business unit. At the very least, it signals a level of commitment and a line of reporting that the CEO
is likely to notice. Last year, Microsoft, 3Com (COMS ), and Hewlett-Packard (HWP ) set up divisions to focus just on
small business. Staples (SPLS ), Intuit (INTU ), and Dell have actually hired former entrepreneurs to head their divisions.

-- A willingness to customize. Vendors need to acknowledge that there is no "typical" small company. "A small-business
owner doesn't think of themselves as a small business," says IBM Vice-President Judy Smolski. "They don't even think of
themselves as a PC buyer. They may think of themselves as an architect in Los Angeles."

-- First-rate customer service. Ideally, that means you get to talk to a human being rather than deal with an automated
system and that someone shows up fast when you need help. It can happen: A fax line at long-distance reseller
BecauseWeLikeYou.com, in New York, went down on a Friday. Owner Yosef Rabinowitz, knowing he would be out
Monday, asked that it be repaired Tuesday. Sunday afternoon a Verizon (VZ ) technician called to say he just happened
to be in the area and wanted to know if it was "O.K." if he fixed the line right away. After pinching himself, Rabinowitz
said "yes" and his problem was resolved in 20 minutes. The next week he received a letter of apology from Verizon and
a $5 calling card.

Hey, at least the big players are trying. And they know you're skeptical, because that's what marketing gurus like John
Cicco are telling them. "Small businesses are not sitting there believing the large corporations are really going to help
them," he growls. Still, if it does happen, nobody's likely to complain.

By Kimberly Weisul