Opportunity. That is the word we heard most often during GGV Capital’s third annual SMBTech Summit, where the greatest minds in SMBTech discussed what’s ahead for their businesses. GGV defines SMBTech companies as those that build technology and tools for small and medium-sized businesses, which account for more than 60% of employment in the U.S. and an even higher percentage in many countries.
As SMBs emerge from an incredibly difficult last two years, business owners are more determined than ever to succeed in a new type of digital-first economy, presenting great opportunity for the SMBTech companies that can help them grow and thrive. In the last decade, SMBTech companies have added over $1 trillion in value to the public markets, and dozens of private high-growth SMBTech companies are growing larger every day. The GGV SMBTech Index tracks 25 public SMBTech companies that together are now worth more than $800 billion in market value, including restaurant-tech company Toast that went public last month and has attained a $25 billion market cap.
At the SMBTech Summit, we heard from the founders and leaders of some of the fastest-growing SMBTech companies including Brightwheel, Hello Alice, Electric, GlossGenius, OpenPhone, and Homebase, as well as public SMBTech leaders such as DoorDash and RingCentral. They shared tips, tactics, and lessons learned while building their companies into the tech leaders they are today. But perhaps most importantly, they provided valuable insights into the minds of the small business owners they work with every day. Below are some excerpts overhead at the event that we hope will inspire SMBTech entrepreneurs to keep finding innovative new ways to support the SMBs that are the lifeblood of every community.
“We are driven by our mission to empower small business owners to be successful, and the mission itself has a direct impact on how the product and the company evolves. We think of our technology as not just impacting business owners at work, but also how they show up in their families and communities. By taking some of the stress and hardship away from running a small business, it becomes much easier and much more fun.” —Danielle Cohen-Shohet, CEO and founder of GlossGenius
“Brightwheel doesn’t exist just to help small business owners, but everyone in their orbit. Because for a daycare provider, their business is not just their ‘baby.’ They're taking care of people’s actual babies, and there is no work more impactful than providing great care for children in the first five years of their lives. For families, childcare is often their biggest expense and the relationship with their care provider is one of the most important in their lives. So whatever we do as a company, at the end it is to support children, families, and their communities.” —Dave Vasen, CEO and Founder of Brightwheel
“When we started out, we had the goal of being the very best small business phone system, but then our customers began growing and getting bigger. It quickly became clear we would need to go up market and make our product better and better for any customer who was leaving the world of SMB behind. We want to be there for a business owner when they incorporate and then grow up with them.” — Mahyar Raissi, CEO and Co-founder of OpenPhone
“I often meet with our president, who is a great mentor and coach, and he is alway asking me, 'Are you looking around the corner?' And I say, 'Why? Is there something scary around the corner?' But what that really means is to always be thinking about the future, and not just the future of our company, but of our customers. Many of the SMBs I first signed up, and have worked closely with over the past 11 years, are today large enterprises with over 1,000 employees. And to witness their evolution is my North Star and how I calculate success. For every SMB customer we have, our goal is to help them grow into large organizations with hundreds or thousands of employees, if that is their vision.” —Faiza Hughell, Chief Customer Officer at RingCentral
“Small businesses are buying and using more software and SaaS applications than ever, and they're not afraid to spend money. Many SMBs are spending more money on software today than they were on office space a year or two ago, and that purchasing power continues to expand. Plus, young business owners are digital natives who grew up with the internet, so they are comfortable buying software off the internet. Back in 2016, our average customer was using 8-10 SaaS applications; now that number is closer to 35, with a lot of companies using 50-100. We’re in the midst of a perfect storm of SMB SaaS adoption at scale.” —Ryan Denehy, Founder and CEO of Electric
“We did a study of small business owners in conjunction with GGV, and we saw very clearly that that 90% of small business owners recently have or are planning to spend more on software, everything from accounting, hiring, payroll, receivables, e-commerce, business services, marketing, and just about anything else that enables a small business to be smarter and do more.” —Elizabeth Gore, President and Co-founder of Hello Alice
“For hiring and workforce management, the software industry has spent billions of dollars to help large corporations enable those things, but for SMBs, talent is an even bigger issue, and yet few companies have focused on that area for SMBs. With an ongoing labor shortage set to continue, tools that allow small businesses to hire, manage and build relationships with their employees represent a huge opportunity.”—Gokul Rajaram, Executive at DoorDash
“Small businesses want to grow again post-pandemic, but they are all facing a labor shortage and turnover like they’ve never seen before. The small businesses that are winning are those that are going above and beyond to provide a great work experience, and for the 100,000 businesses that use Homebase, a lot of times that is things like offering a flexible schedule, weekly paychecks, instant paycheck deposit, and, of course, higher pay. But we have seen in the 1.5 million hourly workers supported through the Homebase platform, that many often choose slightly lower pay to work at SMBs with a really great work culture—those that feel like family.” —John Waldmann, CEO and Founder of Homebase