There are approximately 30.2 million small companies open for business in the U.S. today, employing around 58 million American workers, according to the Small Business Administration (SBA). That’s roughly half the adult workforce in the U.S. (47 percent), and the majority of those workers are employed at firms of fewer than 100 employees.
Individually, these firms are small — collectively, it is not an exaggeration to say they are the backbone of the American economy. That is why, this week, those firms are being celebrated as part of national Small Business (SMB) Week, which formally began on Sunday (May 5) and will draw to a close on Saturday (May 11).
This year, Visa celebrated the event the same way it did last year: with a hackathon, co-sponsored by the SBA, focused on solving a problem pressing small businesses. Starting last Friday (May 3), 27 teams made up of 105 developers from all over the country descended upon the Inclusive Innovation Incubator in Washington, D.C. to take on this year’s challenge. By Sunday morning, presentations were concluded, and winners were crowned.
It was a busy time during a busy week, Visa SVP and Global Head of Small Business and Medium Enterprises Business David Simon told PYMNTS — and a highly educational experience all the way around. This is Visa’s second Small Business Week Hackathon, he noted, done in partnership with the SBA. Unlike 2018’s efforts, where the questions presented to the developers to solve were a bit more open in nature, 2019 was more directly focused on a single issue: natural disasters.
Specifically, he said, the teams were asked to design projects that did one of three things: help businesses prepare for natural disasters, aid businesses in repairing after one and assist businesses in growing after the repair phase is over.
Finding This Year’s Focus
Natural disasters have all kinds of human costs — and though the costs to small businesses aren’t often the most visible, they are keenly felt. According to the SBA, in the aftermath of a natural disaster, 96 percent of small businesses see revenue losses, with 35 percent experiencing losses of greater than $25,000.
Simon noted that this was a situation that hit home for him personally during last year’s Small Business Week, when he happened to be seated at a table with Three Brothers Bakery Owners Janice and Robert Jucker, who were receiving an award for rebuilding their business in the aftermath of Hurricane Harvey.
“What Janice really hit when we talked was how companies like Visa can help small businesses recover from natural disasters,” he said, adding that he thought about it that night and the weeks afterward, and “really took that as a challenge to see if there are unique things Visa could do.”
As part of that effort, Visa launched its Back to Business tool to help consumers find and support small businesses affected by federally declared natural disasters, like hurricanes and forest fires, that are open and accepting payments. The hackathon, as designed this year, was an attempt to “take that effort to the next phase” by giving the teams access to Visa’s APIs and government data, and turning them loose on the problems of disaster preparedness, recovery and reconstruction.
“I was pleasantly [surprised] with the seriousness, and with the very focused application, [by] the firms across the spectrum,” Simon said, noting that he was particularly impressed with the inventive applications for incorporating Alexa into solutions, and the number of firms that keyed into the need to improve and enhance small business insurance.
As for the firms that received awards — Snapshot, an app-based solution looking to prepare small businesses for disasters by making it easier for them to catalog their inventory ahead of time, took home first place and a $25,000 prize. Second place was also taken by a disaster preparedness application: Disaster Recovery Score. As its name implies, the app provides small businesses with a disaster readiness score to determine their ability to recover from a natural disaster, and lays out the steps it needs to take to improve that score.
More than the winning-and-losing competition aspect of the hackathon, though, the most important thing it really offers is an educational opportunity — both for the participants and for Visa, which gets a front row seat to the developer thought process, and a perspective on how to leverage technology that the participants wouldn’t otherwise have.
That’s important during Small Business Week, Simon said, but it’s also important beyond it.
The Bigger SMB World
Though May 5 to May 11 is the officially designated time each year to think about small businesses, Simon noted that, for Visa, this is a year-round effort. One can see that in the Visa Everywhere Initiative or the She’s Next Initiative to support female entrepreneurs — Visa is always thinking about the SMB economy. Specifically, he noted, Visa is thinking about how it can help SMBs make and receive payments, and distribute funds, in a variety of ways.
The question the company always has to ask, according to Simon, is about if it should do more.
“We want to capture new [payment] flows — and there is a lot of work to do there, because even cards are a small piece of the current market, and we look to continue to expand our operations on a global scale,” he said.
Visa’s goals, when it comes to small business services, are not modest. The company wants to make the lives of small business owners better worldwide, make it easier for minorities to start businesses, make the world a fairer place for women entrepreneurs, make it easier to get up and running again when natural disasters strike, and offer a set of core products and services that make it easier for small businesses to grow up into big businesses. Given how important small businesses are in the U.S. and world economy, Simon noted, big goals are appropriate to the space.
“It’s a broad mandate,” he said, “but it keeps us going, and we really believe we can make it better for SMBs here and worldwide.”