A good example of social data is Intuit Trends, an early alpha product available on Intuit Labs.  Trends uses aggregated company financial data collected from the online version of the accounting package Quickbooks. 

The application lets small business owners, managers and their advisers explore industry financial trends, share observations, and compare their performance with their peers and/or competitors.

Social data applications only work if data specific to individuals or companies is kept private and secure.  Intuit Trends and other social data applications accomplish this by only providing access to aggregate or summary data, thus protecting the privacy of the data sources.

While the buzzword is new, the concept is not.  Industrial companies have long provided product service and performance data based on information collected from their customers.  But this has been expensive and hard to do.

The Internet in general - and cloud computing in particular - has changed this.  With data rapidly moving from individual PCs and servers to the cloud, social data applications are much cheaper and easier to develop and deliver.

We've recently been briefed on over a dozen social data applications currently under development.  These applications target a range of industrial and consumer markets.

Social data will be a hot field in the coming years and we expect substantial growth in the number, range and power of these applications. 

Disclosure:  Emergent Research has done work for Intuit in the past year.

The first comes from Tim Berry's blog via MyVenturepad.  Tim writes about the Huffington Post using A/B testing to pick article headlines.  Online A/B testing is a process where different people are randomly shown different versions of a web page, or in this case different article headlines.  After testing with a number of people, the version with the most success (in this case clicks) is then shown to everyone else. 

A/B testing has been in use for a long time in the direct mail industry and is commonly used by larger online firms.  It is interesting to see the use has spread to things like article headlines.

The other post comes from the American Express Open Forum blog and is written by Anita Campbell.  The article, Are You Ready For the Trend towards Marketing Automation, discusses the growing number of systems a small business can use to automate marketing processes.

The use of analytical tools is becoming key to business success, regardless of the size of the firm.  Small businesses need to be aware of this trend and understand how analytics can improve their performance.  These two articles are a good place to start.

iMedia Connection's article 5 Marketing Megatrends You Can't Ignore looks at megatrends that marketers should care about.  The author defines megatrends as:

"What's a megatrend, you ask? It's something big. I'm talking really big. Think of a giant unstoppable tsunami of change transforming society as we know it. Think global warming scale -- then apply it to mass human behavior. Think glaciers carving the grand canyon of consumer sentiment."

So megatrends are really big trends, as opposed to everyday trends like a fashion trend. 

The author lists 5 new megatrends he believes will transform society in the coming years:

• Mass collaboration is powering the new economy
• Constant connectivity in an on-demand world
• Globalization
• Pervasive distrust of big corporations
• A global sense of urgency to mix the problems of the modern world

What's interesting about these "new" megatrends is all have been talked about, at least in the trends community, for many years - even decades.  This does not mean the list is bad or late.  Trends take a long time to reach the point where they matter. 

One of the key indicators that a megatrend is starting to have broad impact is discussion and activity across multiple disiplines.  All of these trends have reached that point - and all of these trends matter or are starting to matter to small businesses. 

The article goes on to talk about readers being less interested in business news. 

This simply isn't true.  If you add in business coverage coming from new media companies like TechCrunch and others, you find that overall business related media coverage and readership has increased over the last decade.

What is true is there much less reader interest in print.  But like many articles coming from traditional media, they mistake traditional media's business model and distribution problems with a lack of demand. 

But one place this shift has definitely led to a decline is the quality of the reporting and writing.  The paragraph below from the NY Times article is a great example of prose you rarely see in new media:

Business coverage has been, at its heart, aspirational, a brand promise that suggests that if you clip the right articles, internalize the right rhetoric, then you too will end up as one of the shiny, happy people striding boldly across the pages of magazines with names like Fortune, Money, Fast Company and Wired. But nobody is going to read, let alone aspire to, magazines called Middled, Outsourced, Left Behind and Clobbered.

The chart below is from Mary Meeker's presentation at the Web 2.0 conference a few weeks ago.  It clearly illustrates Facebook's rapid rise to key web player status.

Marketing Charts has another angle on the growth of Facebook.  Their chart (below and sourced from Nielsen) shows the top 10 U.S. Web brands by unique visitors and time spent in September.  Facebook is 4th in terms of audience size and 1st in terms of time spent per person.

What is striking about Facebook is not the size of their audience or how much time people spend on the site.  It is their growth rate on both metrics that is impressive.  They are quickly becoming the place people hang out on the web. 

Despite these numbers, the vast majority of small businesses do not need a Facebook presence at this time.  It is not yet a site most customers turn to for business purposes.

But it is time to pay attention to Facebook and start to understand how you can use it for your business - because the day is coming when a Facebook presence will be required.

"According to one government estimate, 93% of the growth in the U.S. labor force from 2006 to 2016 will be among workers ages 55 and older."

The report introduction has two charts that nicely summarize Pew's findings.  The chart below shows that over half of workers over the age of 65 work because they want to.

The second chart (below) shows the impact of the recession on retirement age plans.  Many boomers are now expecting to delay their retirement because of the economic downturn.

The recession has come at a bad time for the nation's 76 million baby boomers.  The early boomers are just past the age of 60 and don't have a lot of time for the financial markets to recover before they reach traditional retirement age.  Even younger boomers have seen their retirement assets and home values decline enough to be concerned about retirement funding. 

The good news is (well, at least sort of good news) many baby boomers want to work past the traditional retirement age.  The other goods news is boomers will be healthiest older generation ever with many boomers able to work productivity well past retirement age. 

Prior to the recession we were forecasting that over half of baby boomers would work past the traditional retirement age.  Because of the recession, we now believe this number will be higher.

The article points out that while the economy is the biggest issue facing small businesses, uncertainty about three public policy issues is resulting in many small businesses reducing staff, delaying expansion and cutting costs.

The three key policy issues listed as causing the uncertainty are:

1. Health care reform and the risk of much higher health care costs
2. The end of the Bush tax cuts and the risk of increased taxes in general
3. Potential costs associated with climate change legislation (cap and trade)

We're also hearing about these concerns in our interviews and discussions with small business owners.  Part of this is the publicity health care reform is getting.  Also contributing is most small business owners have a natural aversion to taxes and government intervention in the economy. 

Government's role in the U.S. is expanding and small business owners are much more focused on government policy than at any time in the recent past.  Policy makers need to be aware of this increased scrutiny and understand the impact of their debates and plans.

As the article is kind enough to point out, there are 78 million baby boomers and the oldest of this cohort are about to turn 65.  According to the article:

"Keeping all those bodies in good working order represents not just a challenge but an unparalleled business opportunity."

It is interesting to note that many of the technologies listed fall into a category called "human augmentation" by futurists.  These are technologies or drugs that improve or enhance humans.  This category includes everything from memory enhancing drugs to artificial limbs to genetic engineering. 

Not too long ago human augmentation was something that only happened in science fiction.  It is quickly becoming a reality.  

With health care spending close to 20% of U.S. GDP and growing, the opportunities in health care are enormous.  Longer life spans and the large cohort of aging boomers means even if we somehow get control of health care costs, demand for health care will continue to increase for at least several decades.

Demand for human augmentation will also grow to substantial levels and add to the size of the health care industry. 

The BusinessWeek article, The Rise of the Homepreneur, includes coverage of this trend.  Key quote:

"But just as important, there has been a change of consciousness in the business world to recognize home-based enterprises as legitimate."

Most trends - and especially attitude shifts - take a long time to enter the mainstream.  The growing acceptance of home businesses started many years ago.  The underlying, inter-related drivers of this trend include:

1.  The rise of telecommuting and mobile computing:  Telecommuting exposed many people to working from home.  This led to a broader understanding that real work can be done from a home office.

2.  The blending of work life with home life:  Similar to telecommuting, the blending of work and home life is now common for many and again shows that you don't have to be in a traditional office to get work done.   

3.  The interest in work/life balance:  Work/life balance has become an important issue for many.  Many see home businesses as a way to help achieve better balance.  Because of this, there is more acceptance of people who choose to work from home.

4.  The realization that home businesses can be cost efficient:  Many homepreneurs stress the cost efficiencies they gain by being home-based.  This allows them to be very price competitive, which is attractive to their customers. 

While tipping points are hard to discern or predict, we believe customer acceptance of home businesses has reached a tipping point.   With millions of home businesses in the U.S., we've reached the point where many Americans have worked with or know a homepreneur. 

For more on home businesses and homepreneurs, see our research report Homepreneurs - A Vital Economic Force.   

Some of the key findings include:

• Home businesses employ over 13 million people.
• Nearly 6.6 million home businesses generate at least 50% of the owner's household income
• 35% of home businesses generate $125,000+ in revenue; 8% more than $500,000.

The Small Business Success Index project is an excellent resource for understanding small businesses.  The project is a collaboration between Networks Solutions (an Emergent Research client), The University of Maryland's Robert H. Smith School of Business and the marketing research firm Rockbridge Associates. 

The Success Index is a longitudinal study designed to track small business competitiveness and success over time.  They've done two survey waves so far, one early this year and one over the summer.  They are going to continue with this cycle going forward. 

In addition to being the only source I'm aware of for survey data on small business competitiveness and performance, they also collect a mix of other data on small businesses. 

We're looking forward to studying the new Small Business Success Index data as it becomes available.  Having someone else do the hard work of data collection - and then letting us play with it - is great fun for us. 

Some surveys say 50% or more of all small businesses are using social media.  Some say less than 10%.

The reason is different survey methods are being used and different small business groups are being surveyed.  

Marketing Charts, for example, reports on an online survey by Internet2Go that shows high small business social media use.  The survey authors are very clear about who they surveyed.  From Marketing Charts:

"The survey, which targeted the most frequent content publishers among MerchantCircle’s small businesses members, found that 45% of this leading-edge group have a presence or profiles on Facebook and Twitter and use social media to promote their businesses online."

So this survey provides useful information on leading-edge users and is an interesting look at where the overall small business segment may be heading.  This is great stuff, but not meant to reflect where the broader small business segment is today. 

A recent Citibank survey showed much lower social media use.  They surveyed a broad cross section of small businesses.  It is a good snapshot of where the overall small business segment is today, but provides little information on where social media use is going.

Another example is the BIA/Kelsey survey released this week.  I don't know how this survey was done, but their results - 9% of small business respondents currently use Twitter to promote their businesses - likely indicates a survey of a leading-edge group.  But before I would use this information, I would need to better understand how the survey was done. 

All of these surveys are good, useful and add to our understanding of social media use by small businesses.  But if you just read the survey press releases or short articles on these surveys, it is easy to be confused and think they all apply to the entire small businesses segment.  Unlike the Marketing Charts example, important details about how and who was surveyed are often left out of press releases and articles. 

So as you read survey results, take an extra minute to check out how the survey was done and who they surveyed.  This will cut down on confusion and provide a better sense of how to use the data.

But one area that continues to grow is the high end green baby products segment. 

My favorite example is the Uppababy product line.  The picture on the right is the Uppababy Vista stroller, which retails for $699 and is so cool it almost makes me wish my kids were still babies.  From the article:

""We use organic products whenever possible," said (Uppababy) spokeswoman Sarah Hines, who adds that the fabric used in the firm's bassinet is lined with "organic soybean fiber and cotton" and that the Vista's sun shade provides baby with SPF-50 protection from solar rays."

The movement towards green and sustainable products continues to grow.  And while the recession has dented growth for many green products, the baby products market shows demand for green is still in place. 

1. 75% of UK small businesses believe the economy will see an upturn in 2010

2. 35% predict an improvement by January 2010

3. 45% say their business operates for the better as a result of the downturn

4. 41% believe small businesses will innovate and diversify to create new industries as the UK emerges from the downturn

A bit orthogonal to our topic, we often get questions about social media press releases.  The press release for this study is an excellent example.  It has the key data, quotes, videos and contact information in one place and organized to make it very easy to write about the study. 

The term quickly caught on and these concepts have entered the mainstream.  Since it has been 5 years, many are asking "what's next?" 

According to O'Reilly, it is Web Squared.  The basic idea behind Web Squared is that web activity will grow exponentially as sensors and other information capture technologies (RFID, 3-D barcodes, cameras, voice recognition systems, GPS systems,etc.) add a flood of data and expand the range of possible applications.

This is similar to the concepts of The Internet of Things - a term coined in the late 90s by Kevin Ashton while at MIT's Auto ID Center - and Pervasive/Ubiquitous Computing, terms and concepts which have been around since at least the 80s. 

New technologies tend to take a long time to move from the idea stage to the mainstream.  And often, technology forecasters believe they will arrive much sooner than they do.  The flying car and paperless office are good examples and missed technology forecasts are much more common than accurate ones.  Because of this, I tend to be more than a bit skeptical of technology forecasts - even ours:).

But in this case I'm very much paying attention.  The O'Reilly Group has a deep understanding of web technologies and have proved themselves to be excellent technology trend spotters. 

So expect to hear and see a lot more on Web Squared over the next year. 

We cover many of the Web Squared technologies in the Intuit Future of Small Business report The Connected World of Entrepreneurs, which was released in 2007.  We're working with Intuit on an update of this report and expect to release a new forecast in the first half of 2010. 

The report is from Inside Facebook and projects that virtual good sales will reach $1.6 billion in 2010.

An examples of virtual goods are the avatar accessories that help game players move more quickly or fight better in virtual worlds.

Another example is the range of virtual goods available to participants in the virtual world 2nd Life.  You can buy everything from islands and buildings to virtual clothes.  There are even virtual banks. 

Virtual worlds were all the rage a couple of years ago when you couldn't avoid hearing about how 2nd Life was the next big thing.  And although the hype is gone, virtual world participation continues to grow at a steady pace. 

One area of virtual goods well worth watching is payments.  Because virtual good transactions are almost always online and the goods often cost little, virtual worlds are an interesting source of micro-payment innovation.   

According to the survey, 76% have not found social networking sites helpful in generating leads or expanding their business.  86% said they have not used online social networking sites to get business advice or information. 

These numbers are not surprising - the results are consistent with other surveys of this group.  The Network Solutions Small Business Success Index survey, for example, found earlier this year that about 12% of small businesses with less than 100 employees use social media. 

The social media use numbers are low because a lot of small businesses are not active online.  Only about half of all small businesses have a website, and many small businesses with websites are not doing much online beyond the website and email. 

Having said that, the use of social media by small businesses is growing very rapidly. 

The use of social media also increases the larger the small business is.  Both the Citibank and the Network Solutions survey results show this. 

And research conducted by Society for New Communications Research Senior Fellow and University of Massachusetts professor Nora Barnes shows that in 2007 39% of Inc. 500 companies (mostly larger small businesses) used social media.  Professor Barnes is releasing her 2009 study on the Inc. 500 later this fall and it will no doubt show much higher social media and online social network use by this group.

So for those who think the numbers are too low, I suggest looking at the glass as half-full.  After all, according to the Citibank survey almost half of all small businesses that are active online have found social networking sites useful. 

The new method extracts natural gas from shale, a plentiful rock rich in organic material but only recently tapped as a energy source.  The new drilling method fractures shale and uses horizontal drilling to collect the gas.  A recent study by a leading energy analysis firm, Cambridge Energy Research Associates, shows that shale gas has doubled the world's known gas reserves.  Great quote from their chairman:

"The projections suggest that the new method of producing gas “is the biggest energy innovation of the decade,” said Daniel Yergin, chairman of the Cambridge consulting group. “And the amazing thing is there was no grand opening ceremony for it. It just snuck up.”"

The emergence of shale gas has stunned the natural gas industry.  According to a Reuters article, as recently as 2006 the industry believed the U.S. would be a large importer of liquefied natural gas by 2010.  Instead, the U.S. has a natural gas glut and prices have fallen substantially over the last couple of years. 

The new drilling technology is good news for the environment.  Natural gas burns more cleanly and emits fewer greenhouse gases than coal or oil.  And since India and China have a lot of shale, the hope is these countries will be able to reduce their dependency on coal for electric power generation.

We believe energy innovation will thrive in the coming decade in large part due to the need to reduce greenhouse gas emissions.  This new energy economy will create lots of opportunities for small businesses.  And, as this example shows, innovation can lead to lower prices. 

We've started a project to track and forecast the impact of energy changes on small business and will be reporting on it regularly. 

After reading the book, I'm quite surprised at the controversy it's generated.  It is being actively debated on the Internet. Malcolm Gladwell ripped the book in a New Yorker article.  And according to the bMighty.com (one of my favorite small business tech sites) article Free vs Not Free, the very smart folks at 37signals consider it a sham.

I don't get it. 

Free has been used effectively as a business strategy and marketing tactic for pretty much as long as businesses have existed.  Given how widespread and successful free is and has been, I don't see how you challenge the concept. 

The only place I see room for criticism is if you think Anderson is suggesting that free is a complete business model.  Obviously, if free means no source of revenue then it is destined for failure.  But I don't think this is what Anderson is suggesting. 

I think the point of the book is free can be very effective as a marketing tactic, business strategy and/or part of business model. 

This blog, for example, is free.  And despite the fact that we will never monetize the vast majority of our readers in any meaningful way (we do get pizza and beer money from advertising), it is an important part of our business strategy and an effective marketing program. 

Freemium business models - giving goods or services away to a lot of people in hopes that a subset to pay for something - have also proved to be effective.  Software companies like Evernote, Intuit and others have had success with this approach.  Free samples fall into this category and have obviously been successful. 

And third party payer business models are common.  This is what advertising uses.  We get TV for free - the advertisers pay for us. 

The reality is free has been around a long time and is here to stay.   And as the digitization of our economy continues, there will be many more opportunities to use free as a strategy or tactic because of lower marginal production costs.  This, I think, is the point of Free. 

***Update*** When I wrote this post I had not seen Steve Balmer's comments on free.  He also said Free is not a business model, but as TechDirt points out Microsoft uses free as a business strategy on a regular basis.

The 30 minute interactive webinar will take place this Wednesday, October 14th at 1:00pm eastern time.  Click here to register for the webinar.

SBA Administrator Karen G. Mills is featured in the webinar along with several small business owners and Stephen Key, an inventor and founder of inventRight.com.  I am also participating.   The discussion will focus on: 

The session has online video, real-time polls and polling, an interactive Q&A and a radio announcer moderating.  It is the most sophisticated webinar with the highest production values I've participated in.  It will be informative and fun for the audience. 

In addition to small business owners and managers, folks who produce or participate in webinars should definitely sit in.

A deal of this type would allow Google and Microsoft to add detailed Twitter information and tweets to their search algorithms.  This would mean Twitter could potentially become important to search engine results and would need to be included in search engine optimization (SEO) programs. The Hubspot Inbound Marketing blog has a good discussion on this topic.

On a broader level, the continued success of Twitter shows the growing importance of the real-time web.  This is a collection of technologies that allow users to get information as soon as it is published by its authors, rather than having to wait for periodic updates.  Facebook is another real-time web example. 

Real-time systems have changed multiple industries.  Examples include real-time stock quotes changing the financial industry and real-time inventory management systems changing supply chains. 

As real-time systems spread across the Internet, expect more changes. 

But the amount of innovation in the storage industry - and the impact it is had on computing - is simply breath taking.  In 1990 a gigabyte of storage cost around $600.  Today it costs less than 10 cents. 

Without this steep price decline, computing would be much different today.  YouTube, Flickr, Facebook, Google, the iPod and many other companies and products are around because of cheap and abundant data storage. 

And the storage innovation march continues.  Seagate recently started shipping a 3.5 inch, 2 terrabyte drive that uses the new 6Gbps data transfer standard.  According to CNET: "Theoretically, the new 6Gbps standard's throughput could be fast enough to transfer the entire contents of a CD (about 800MB) in just one second."  Wow!

It costs $299 and I'm sure volume discounts apply.

The next step in storage is solid state, which has been around for years.  iPods use solid state storage and so do the flash drives (also called thumb drives) commonly given out at conferences.  Because they are electronic, they have no moving parts.  This makes them faster, smaller and more stable.  They cost more than traditional disk drives - about $2 per gigabyte today - but their prices continue to fall and their performance continues to improve. 

Storage being added to a wide range of devices and products.  So not only is the industry innovative, it is driving innovation in an increasing range of industries. 

CNET has a geekier story on the new Seagate drive. 

The unemployment rate has always been the key economic indicator for most Americans. Echoing this, 72% of respondents in this survey indicated they felt the recession would be over when unemployment declined. 

We believe the recession ended in Q2 and think Q3 and Q4 2009 GDP growth rates will be surprisingly strong.  The results will be helped by weak prior year numbers, but the stimulus package also had a positive impact.  We expect positive growth in 2010 and fall into the camp that thinks we are looking at a square root recovery (a strong but short V shaped recovery followed by weaker growth). 

The key reason is we expect job growth to weak and the unemployment rate to stay high.  Corporations have been battered by the recession.  Even if the economic recovery is strong, companies will not rush to hire full-time staff.  Instead they will stay lean and flexible through the increased use of technology, contractors, partnerships and outsourcing.  

The lack of job growth will keep a lid on consumer spending and overall economic growth. 

We also believe it will result in more people pursuing self-employment. 

This is about $4 billion out of $16 billion in stimulus package money awarded so far by federal agencies.  As we point out in our report on the stimulus package, the majority of stimulus money is allocated to the states who then spend the money.  A relatively small share is spent directly by the feds.

The Department of Defense awarded the highest percentage of stimulus package money to small businesses - 58% of their stimulus package spend.  This is because DOD spent most of their stimulus money on construction related projects.  Small businesses employ roughly 85% of all U.S. construction workers, so money spent on construction tends to flow to the small business sector.

Federal agencies are expected to spend around $60 billion in total stimulus package money.  If they continue to allocate this money as before, around $12 billion worth of additional contracts will be awarded to small businesses in the coming months. 

This is 18% higher than 2000 (2.43) and 43% higher than 1990, when the average household had 2 TVs. 

This means the average number of TVs per household exceeds the average number of people per household.  According to the US Census, the average US household has about 2.56 residents. 

We not only own more TVs, we are also spending more time watching them.  Americans, on average, spend 153 hours per month watching TV.

These numbers refer to traditional TV.  Adding Internet viewing raises both the number of screens per household and the amount of time spent viewing TV content. 

So watching TV is not dying.  But viewer fragmentation and competition from the Internet is taking its toll on TV business models.  The UK recently became the first major economy where advertisers spend more on Internet advertising than on television advertising.  Smaller economies, like Denmark, have also seen Internet ad spend pass TV spend.

And the U.S. will likely see Internet ad spend exceeding TV spend this year or next year.