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On September 14, 2017 Facebook and the Global Innovation Forum hosted an afternoon discussion and reception at Impact Hub DC for entrepreneurs, small business owners, thought leaders and policymakers about the role of global markets in the success in small businesses around the world. The event also served as the launch of the latest Future of Business Survey, a collaboration between Facebook, the OECD, and the World Bank which surveys small businesses about the importance of international trade and digital technology in their success.
– The Program –
What global trade means for trade the Future of Small Business?
His Excellency Ashok Kumar Mirpuri, Ambassador of Singapore to the United States
Katie Harbath, Head of Economic Growth Policy Strategy, Facebook
Diego Molano, Senior Advisor on Digital Transformation and former Minister of Information Technologies and Communications of Colombia
Rachel Bae, Senior Counsellor, Trade and Agriculture Directorate OECD
José Guilherme Reis, Practice Manager on Trade and Competitiveness
Moderated by: Jake Colvin, Executive Director, Global Innovation Forum
Fireside with SMBs that trade internationally due to the Internet
Sven Alwerud, Founder, Jelly Skateboards
John Lott, CFO/COO, SpearmintLOVE
Wendy Gavinski, Founder, Divas SnowGear
Chris Sonjeow, Co-Founder, Love Book
– What We Learned –
Takeaways from the conversation
Web-based tools are crucial for small businesses to reach global markets
“Going global was a matter of having the tools at our fingertips. I worked closely with Facebook, and every week there was a new set of tools. We started with the US, then UK, then Canada, then Australia. We don’t hold inventory. The customer makes the product and we send digital files to out manufacturers all over the world. We have about 9 manufacturers in strategic locations. We use our own technology to pick out which printers will be best for cost, timing, and shipping. Linking Facebook and other international tools, we’re able to learn more about the customer and other areas of the world than we would otherwise.” – Chris Sonjeow, Co-Founder of Love Book
“Our main form of advertising was print in snowmobile-related magazines. They were hitting the market, but only in front of mostly men. It was hard to get the woman snowmobiler. We went to the mobile and digital world of marketing, and that has really put us on the map because of the targeting capabilities to get to that end consumer.” – Wendy Gavinski, Founder of Divas SnowGear
“The vast majority of product discovery is happening on social media, no matter what platform that is: it could be Facebook or Instagram, it could be Pinterest or other public platforms, and those images float freely throughout the world. At the end of the day, friction is the enemy of the small business. Digital [marketing] reduces friction on the product discovery side; it’s easier for a consumer to find the exact product they need at the exact time they need it. For us, we spent 0 dollars and 0 cents on marketing. Without a doubt, the business wouldn’t exist without Instagram. You can reach a global audience without spending a dime if you’re good at taking pictures. It’s that simple. You can create a global presence in a very short time. We just launched a new brand from Spain that no one has ever heard of to our 500,000 Facebook followers and our 160,000 Instagram followers. That is happening all over the world.” – John Lott, CFO/COO of SpearmintLOVE
“Facebook is great. ‘Check out this new product!’ – post it on your wall, and boom, a thousand friends have seen it. My favorite is Instagram. For us, that was one of the big, game-changing tools for us. A friend kept posting, and posting, and I realized how much traffic there was. There was a huge shift in demographic; all the kids were on Instagram, using hashtags to find cool products. Discovery is through beautiful photos. No text. I also love Shopify. It’s amazing, with the apps the plugins that the developers make. It’s so easy for someone like myself, not a coder, to easily create a beautiful thing and plug in these really cool digital marketing tools. I can focus on growing my business, instead of working on the website.“ – Sven Alwerud, Founder of Jelly Skateboards
Technology and trade enable economic development
“The single most important problem in Columbia is poverty. In 2010, almost 48% of Columbians were living under the poverty line. Now, we are around 25%. We still have a lot of work to do, but we have advanced. Technology is a huge and powerful tool to reduce poverty.” – Diego Molano, Senior Advisor on Digital Transformation and former Minister of Information Technologies and Communications of Colombia
Governments and international organizations are developing practices and policies that help small businesses gain access to global markets
“In 2010, about 40% of Colombians made $450/mo for a 7-member family. Just 8% of them had internet. We went and looked at small companies. We have 1.6 million companies and 98% of the companies in Columbia are small ones, responsible for about 80% of jobs in Columbia. Just 7% of those companies were connected with Internet. We joined forces with some larger technology companies to develop applications so that these small companies can find value using the internet. We went from 7% to 76% of companies with internet access. We are using new policies now to help them export.” – Diego Molano, Senior Advisor on Digital Transformation and former Minister of Information Technologies and Communications of Colombia
“The government [of Singapore] is developing an SME portal, where SMEs can look for help, for case studies, and where they can get information. We have SME centers dotted around the island, where SMEs can walk in and ask for help. A significant portion of the government budget looks to these issues. If you are an SME, you sometimes don’t know where to start; we have this software available to them.” – His Excellency Ashok Kumar Mirpuri, Ambassador of Singapore to the United States
“With the Going Global initiative you have the benefit of an international vantage point, bringing together expertise from across the house: experts in financial markets, tax, public governance, trade, education and training. We brought all of them together to work on this initiative. Part of this is the Digital Trade Market project. We look at traditional market openness issues such as trade facilitation to see if the consequences of digital trade affect market openness in new ways. The goal is to better understand all of the different measures out there that affect market openness so that we can inform policy makers with recommendations. This is intended to help business of all sizes, but particularly SMEs. Large companies already have the resources to figure out complicated market regulations. SMEs have more limited resources, and assistance in this area would help them navigate.” – Rachel Bae, Senior Counsellor, Trade and Agriculture Directorate, OECD
“I think that having participation with OECD and with Facebook on this [Future of Business] Survey is a great thing. At the World Bank, we try to identify the global public good, and the basis of this is data. We have a lot of information on cross-border trade and on policy in general, but we’re not sure how much of this is applicable to B2B. We know much more about B2C, but we know very little about B2B, and how to provide assistance to developing countries. We see trade as an issue that helps improve support; there are many dimensions of this. There’s a possibility for small countries, poor countries, to take advantage of trade in a way that they wouldn’t otherwise be able.” – José Guilherme Reis, Practice Manager on Trade and Competitiveness, World Bank
Product-based companies face a host of challenges with shipping, tariffs and customs when selling internationally
“I sell a heavy, large item, it’s a big box and it’s very expensive to ship internationally, so my tariffs are pretty high. On top of that, sometimes the product will be shipped to the nearest post office by the person’s home, where the customer pays an extra fee. That leaves a bad taste in their mouth and that frustration is often taken out in online reviews, which are really fun to deal with. It’s not our fault, but for us it’s challenging to deal with.” – Sven Alwerud, Founder of Jelly Skateboards
“We manufacture a hoodie in Asia; there are shipping costs and a 32% duty import fee. That can be very expensive, especially on an $80 hoodie. By the time a Canadian customer orders their $80 hoodie on our website, the shipping costs to Canada, the 18% tariff to get in to Canada, and anything else just builds on that – provincial taxes, brokerage fees. When all is said and done, the customer is told at the post office that that owe all these other fees. The cost of their $80 hoodie has almost been doubled. It doesn’t lend to an ideal customer experience.” – Wendy Gavinski, Founder of Divas SnowGear
“A product starts in Turkey, goes to Sweden, comes to the US, and then we ship all over the world. It’s not hard to imagine how much taxes, duties, and shipping are a portion of a $43 onesie. If you really broke down the cost of goods, you would see what an exorbitant amount of that cost of goods is transportation and tax – de minimus issues.” – John Lott, CFO/COO of SpearmintLOVE
The opportunity to be global is undeniable
“Our objective is to become the largest independent retailer of children’s clothing, globally. Start there. We want to become a platform where brands who want to be discovered know that they can meet moms who want to discover these awesome products. The effectiveness of social media and other digital tools enable that.” – John Lott, CFO/COO of SpearmintLOVE
“We participated last year in a joint program between the Wisconsin Economic Development Corporation and the Wisconsin Center for Manufacturing and Productivity. The purpose of the program was to get Wisconsin businesses exporting. 96% of consumers are located outside the United States, so, why wouldn’t businesses want to try exporting? They gave us all the tools needed: basically all the contact we could possible need, they did studies to identify which top ten countries should be targeted our efforts towards, generally support along the whole way. Upon graduation from the program, we were awarded with some grant monies to use towards international marketing efforts. We’re using it now to further invest in Canada.” – Wendy Gavinski, Founder of Divas SnowGear
“The government [of Singapore] is encouraging these companies to look at various opportunities. It fits into our global strategy to building a smart nation. Looking to the future. How do we get a smart nation? How do we get a population that is very tech-savvy, a young, thriving population? Technology becomes a part of that. We have developed a whole series of trade agreements that help these SMEs: TPP 11, off of the US model TPP, ASEAN economic community, and the Association of Southeast Asian Nations.” – His Excellency Ashok Kumar Mirpuri, Ambassador of Singapore to the United States
“To be a part of a product that helps to spread that idea that love is universal is super exciting for us; we wake up every morning knowing that someone will have a big smile on their face. We want to scale, be all over the world. There will always be an opportunity to give this kind of gift to somebody, and we could position ourselves in a place where we become the next flowers, candies, teddy bears, jewelry, just fall into that mix. Everyone falls in love.” – Chris Sonjeow, Co-Founder of Love Book
