smes: what is the real addressable market?

What is the “Real” Addressable Market?

Neal Polachek

Board Advisor – vSplash/BuzzBoard

November 19, 2013

- Former CEO – The Kelsey Group and President – BIAKelsey

- 20+ years as industry analyst

- Board advisor for, and consultant to, large and small companies

Who am I and Why am I Here?

Why do we Care about SMEs

It is where Local and Social Intersect

Some Key Trends/Facts

• SMEs: 95 – 98% of Business establishments in most countries

• SMEs: employ upwards of 67% of private sector jobs in developed markets

• SMEs: drive as much as 50% of GDP in developed countries

• SMEs: drive a smaller % of GDP in developing countries but this % is increasing

160 - 200 Million Identified SMEs

North America; 0

Western Europe; 0

Eastern Europe; 0

Latin America; 0

Asia; 1

ROW; 0

Sources: Various Government Sources

SMEs Swim With the Sharks

And the Sharks Want Their Food

1999 – First Wave Kelsey Local Commerce Monitor - Illustrative

Yellow Pages; 70%

Newspapers; 15%

Direct mail; 10%Leaflets; 5%

Easy to Evaluate, Easy to Buy, Easy to Sell

Little fragmentation

& high margins all

around

By 2013 – It Looks More like This - Illustrative

15%

10%

5%

10%

10%15%

10%

5%

10%

3%4% 3%

WebsiteSocialLanding PagesBlogsMobileVideoLeafletsIYPPrint YPNewspapersRadioTv

Difficult to Evaluate, to Buy, to Sell

High fragmentation

& low or no margins all

around

SME Commerce Meets SME Cloud

SME Share of Cloud

Computing by 2015 = 65% or

$30B USD*

SME Share of Cloud

Computing by 2015 = 65% or

$30B USD*

SME Share of Global GDP of $70T = 40% or

$28T USD

SME Share of Global GDP of $70T = 40% or

$28T USD

*Source: McKinsey 2011

Market

Market

Connect

Connect

Transact

Transact

Commerce Solutions for SMEs

Market

• Traditional and Digital– YP– Search– Newspaper

• eCRM– eMail, rep mgt.

• Web presence– Mobile, responsive

• Social – Blogs, social updates

Acquire and

engage customer

s

Connect

• Connectivity– Broadband– Wireless

• Devices– Desktop– Tablet– Mobile

Connect with

customers

Transact

• POS – Square– Xyz– Etc

• Accounting – Billing – AP/AR– Taxes

Transact, track, bill

and collect

Market Size – 2013 and 2018

140

207

18

206

269

30

MarketConnectTransact

$365B $505B

Just Over 1% of SME GDP (assumes SME Share of GDP is 40%)

Advertising and Devices Today

Advertising; 0.27

eCRM; 0.02Web Presence; 0.01

Social; 0.08

Wireless Device; 0.34

Computing Device; 0.1

Wired Connectivity; 0.13

Accounting; 0.02Transaction; 0.03

$365B

Conversations and Content - Tomorrow

Advertising; 0.15

eCRM; 0.02Web Presence; 0.02

Social; 0.22

Wireless Device; 0.32

Computing Device; 0.12

Wired Connectivity; 0.1Accounting; 0.02Transaction; 0.04

$505B

Penetration Rates will Change

3126

33

9

59 57

39

2126

3036

68

40

87 85

4043

49

2013 2018

Market Connect Transact

And the Money will Flow . . .

100

6 5

30

123

3847

7 10

78

9 9

109

161

5850

1218

2013 2018Market Connect Transact

Thank Younbpolachek@gmail.com

neal@mybuzzBoard.com twitter @nealbp