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By Eric Reed | Video by Sam Crimmins
Executives call it the consolidation curve. It’s the rate at which industries coalesce around a few, big companies, eliminating smaller businesses in favor of their consolidated peers.
The consolidation curve is Walmart clearing out local retail space. It’s shopping at five different grocery stores all owned by Stop & Shop and picking from a hundred shows owned by The Walt Disney Company. For entrepreneurs and their customers, the consolidation curve often means the death of small businesses in favor of corporations with more resources.
But some Boston-area businesses refuse to accept this as inevitable. By giving small businesses access to the same tools used by the big players, these innovators help the organizations around them grow, compete, and thrive no matter where they fall on the consolidation curve.
HR for everyone
“We provide benefits for people who don’t get benefits.”
In a few words, this is how Kristen Anderson describes her company. Anderson is the CEO and co-founder of Catch, a financial services firm designed for the smallest form of small business, the self-employed.
For contractors, freelancers, and gig workers the finances of self-employment are often a surprising challenge. Employees of a company work with the benefit of a payroll department to take care of matters such as tax withholding, retirement contributions, vacation days, and even health insurance. Complicated yet critical, any one of those issues can cripple an independent worker.
Catch attempts to level the playing field by offering what is, effectively, a payroll department for the self-employed. Individuals can manage their income through the company’s app, where it organizes expenses such as … well, tax withholding, retirement contributions, vacation days, and even health insurance.
“We tend to like to have mental buckets for money,” says Anderson. For example, “how do you take time off when you’re a freelancer? Technically you’re always off, and technically you’re never off. It’s both of those things at the same time. For some people having money set aside really reduces stress and lets them take time off without feeling like they should be working.”
For many people trying to make it on their own, this service can mean the difference between spending hours each week on finances or using that time to build their business.
In other words, it can mean the difference between success and failure.
A workshop on the desktop
While finances might trip up one entrepreneur, other small businesses struggle to afford the physical tools they need to succeed.
“An average Apple engineer will go through dozens, if not hundreds, of prototypes,” says Dávid Lakatos, chief product officer at Formlabs, a Somerville-based 3-D printer company. “They will scrutinize [those prototypes] every time to make sure that they don’t need to backtrack. If you don’t have one of our printers that’s not really possible for a smaller firm.”
Before a product goes into mass production designers will test it over and over again looking for any weaknesses that their models couldn’t detect. Sometimes an engineer will discover structural flaws. Other times they might find user interaction issues. In all cases, turning sketches into the physical product is a key step in any design process.
Large companies have the resources to pay the outsized costs involved with turning out a few sample products on machines designed for mass-production. Or, failing that, the Apples and Samsungs of the world can simply recreate production in their office, giving engineers the tools to build their products as they go.
Historically this has been prohibitively expensive for many small businesses, putting them at a significant disadvantage when it comes to cost and quality.
Lakatos and Formlabs believe that their 3-D printers can fix that. Far beyond the first generation devices that do little more than shape resin, essentially hot glue guns married to a CAD suite, modern 3-D printers work with polymers, powder, and even sometimes metal to create sophisticated designs. Formlabs builds 3-D printers for anyone who wants them, but it works particularly with the goal of making this kind of fabrication inexpensive and accessible across the board, giving every small and mid-sized business the same tools that the largest firms rely on.
“The name of the game is efficiency when it comes to engineering, manufacturing, and product design,” says Lakatos. “The more time and the more money you can save during the process, the more ROI [return on investment] and the more successful your company is going to be.”
And automation on every floor
As Formlabs offers small businesses fabrication similar to what large companies have, Vecna Robotics helps enhance the tools smaller businesses might already have on the warehouse floor.
“Twenty-five years ago, it was very expensive to get a robot … no small or mid-sized business could have done that,” says Denis Lussault, vice president of autonomy at Vecna Robotics. “Technology has evolved a lot even in the last 10 years. Back then equipment was very complex, very expensive.”
Vecna Robots is a Waltham-based company that specializes in business automation. It builds robotic warehouse tools, such as forklifts and trucks that operate independently. These automated vehicles can magnify the output of any company, allowing staff to shift from routine jobs such as stacking shelves into more complex tasks that build value. It can also let a small business compete on costs, running a warehouse with the same kind of efficiency that Amazon’s robotic army can achieve.
About a decade ago in the robot industry, bots were built from the ground up to meet businesses’ needs. These AGVs, “Automatic Guided Vehicles,” took a lot of money to develop, build, and operate, Lussault explains.
Instead, Vecna sells what is known as AMR, “Autonomous Mobile Robots.” These are robots installed directly into existing vehicles, turning pallet loaders and forklifts into self-driving vehicles that can move, load, and unload products within a warehouse entirely on their own. Instead of building a ground up vehicle and an infrastructure to support it, Vecna’s robotic brains use what is already there to help entrepreneurs use their existing resources better.
“[A small business] won’t buy 25 robots,” says Lussault. “They will buy one, two, or three, and it’s going to cover some part of their processes that they want to optimize and automate.” This both improves efficiency and the experience of employees who can start to take on higher-level responsibilities.
Ultimately, this is the real trick behind small business innovation: giving entrepreneurs the tools to maximize their own talents and the talents of their employees. It’s about letting freelancers focus on the skills that led them to work for themselves in the first place rather than spending hours on bookkeeping. It’s about giving engineers the same tools to innovate and explore no matter who they work for, and about letting every company have access to the same efficiency regardless of scale.
It’s about leveling the consolidation curve so that every business can compete on the strength of its own ideas, no matter how small.
Watch the Globe’s Helping Small Businesses Thrive virtual event, where these innovators discuss supporting those competing against business behemoths.
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