Business, Politics

US: Still the country of the brave, country of the future

By J Brooks Spector 22 November 2011

A careful look around shows that business people keep searching out new ways to do their work – melding together a careful attention to the value of providing good service with the liberating power of IT and the internet. It has always been predicted, and now, more and more it seems to be coming true. BY J BROOKS SPECTOR.

For many commentators it remains easy to contemplate the impending, apocalyptic collapse of America: its way of life, its economy and its overstretched, compromise-destroying, confrontational politics – the commentariat’s equivalent of shooting fish in a barrel. Finding the seeds of destruction of the country in the nature of its global military commitments (as well as the cost of these) is virtually a cottage industry in the media – and especially in the babble (and babel) of the unending churn of talk news programmes on radio and cable television news programs. Each of these is appealing to a particular political persuasion from the soft left of MSNBC to the hard right of Fox News, or real hate-spreading agents like Sean Hannity and Rush Limbaugh.

But there ARE other forces at work here in the US as well… especially in business and at the most local of political circumstances. The other day, this writer wandered through a community fair in a small city in central Florida – an event where, somewhat surprisingly, the stalls were not selling gimcrackery imported from East Asia or offering the boring, mass-produced, mass-marketed bland goods available in every shopping mall in the country.

Actual artists were offering a year’s output of their creative efforts: paintings, sculpture and jewelry – in styles that ranged from the edgy, high concept, conceptual art familiar to the readers of “Art in America” magazine to illustrations with a level of fine attention to detail of birds and local wildlife that the famous painter John James Audubon might have felt comfortable claiming as the work of one of his more talented students.

A whole street in the modest downtown of the small city of Melbourne, Florida, bracketed by the local science museum and the civic art gallery (now closely associated with a nearby university) is roped off and turned over to this easy-going civic festival, an event entirely organised by volunteers, with the willing cooperation of the city’s administrators, its police and fire brigade. Alexis de Tocqueville, one of this writer’s favourite political philosophers, would have been delighted with an effort like this, and doubtless would have pointed to it as proof of his assertion that the peculiar genius of America was to be found in the power of its citizens’ free association to get things done. This is so different from the Europe of the 1830s that de Tocqueville was familiar with, where populations waited for the local aristocracy to determine what was right, proper and necessary, where they tugged their forelock and waited for orders from their betters.

In addition, a careful look around shows that business people keep searching out new ways to do their work – melding together a careful attention to the value of providing good service with the liberating power of IT and the internet. It has always been predicted, and now, more and more it seems to be coming true. The other day, one of this writer’s relatives suddenly needed to fix the broken garage door opener for his house. Rather than try to find a dealer or repair mechanic via the yellow pages of the telephone book, we went to the internet to narrow down possible people we could call. Sounds increasingly normal – but it was the rest of the process that became more interesting.

Having identified a likely repairman, when we called him, Todd told us he could be there the next day between 10 to 11am. He actually arrived at 10:15am, evaluated the broken equipment, searched the web from his smartphone for local distributors and parts suppliers, couldn’t find one for this particular brand (Had they gone out of business? No, they were a Canadian firm that had changed product lines), then reserved a new machine for installation the following day from his electronic inventory. On the dot of 10am the following day, Todd was back, finished the task within an hour, issued the warranty certificate to us from his smartphone and then processed our credit card payment all while he was packing up his tools.

In his previous career, it turned out, Todd had been one of those nameless, faceless cogs in the belly of the beast of a giant financial services company up north. But he had always wanted to run his own business, to be his own boss, to find a niche where he could create his own enterprise, hire more people and bring the standard of service upward and grow his business as large as he felt comfortable making it become. He ran the business end of things by himself with the aid of all the financial acumen he had previously been using to process applicants for housing and business loans. After a few years in his increasingly satisfying new enterprise, he was ready to hire crews of younger men to do the heavier physical work of installing new doors. Todd was actually doing what the theorists of small business always preach – SMSEs create jobs and opportunities where they hadn’t been before.

As he was working, we talked, and this writer asked how Todd got most of his business calls. In the old days, of course, it would have been from personal referrals – one satisfied customer told a neighbor or a relative and a business reputation slowly grew. Instead, Todd said that much of his new business was now coming to him from Angie’s List.

Angie’s List? Oh yes, that constant commercial on the cable television channels between the endless reruns of “Law and Order” or “Star Trek”. Angie’s List marries the personal referral with the distance-killing power of the internet by providing an easy way for people to recommend – and find – dog groomers, plumbers, solar heating panel installers, car mechanics, brain surgeons and everything in-between.

Pay a small monthly fee to join and a member could write a personal recommendation of a particular company or provider after successful work – and anyone else could check out the references of someone before hiring them to do any work. We’re increasingly familiar with websites where one goes to complain about someone or to warn others away from cheats or incompetents, but Angie’s List and a number of similar sites have figured out how to harness the broad based knowledge of the crowd to recommend and winnow out the good ones – and to have satisfied customers sign their real name and email address for the sake of confirmation of their ratings.

In essence, this creates the web-based equivalent of the family and the neighborhood’s common knowledge – something similar for what anthropologist Ben Anderson once coined the term “imagined communities” to describe how new nations construct a political and historic narrative to help evolve a fractured society into a country with common ideas about itself. Only in the case of Angie’s List, it is about who one can call to fix something or get something done honestly and fairly when people are increasingly less likely to have that kind of generations-deep contact in common and shared understanding. They move too often, they work too long each day, and they don’t participate in community organisations as often as they might have before, where such knowledge would be passed around and from one generation to the next. And Angie – there is a real Angie – has figured out how to make money out of this need.

And just coincidentally, as we were finishing up our business with Todd, one of those cable TV channels trumpeted the information that Angie’s List had just made its debut on the Nasdaq stock exchange – and the price per share had risen 25% over the course of its first day of being traded.

Angie’s List success came on the same day yet another reviews site, San Francisco-based Yelp Inc., filed for its own initial public offering of stock. Angie’s List was founded by Angie Hicks in 1995 at the beginning of the Internet Age. And Hicks, besides heading the company, also stars in her TV own commercials. Angie’s List had priced its offering of 8.8 million shares at $13 each, only to see its price shoot right up, triggering speculation that just possibly, maybe, hopefully, internet-based stocks might be getting ready to make a run for growth on the markets again. In fact, this newest IPO follows in the wake of the public launch of the LinkedIn Corp. and Groupon Inc., and has just preceded the highly anticipated public debut of online game company Zynga Inc.

Unlike Yelp which is free for users (and must rely upon advertising in its business model), Angie’s List charges consumers a monthly fee, betting people will pay for the assurance that the reviews are trustworthy. The company bans anonymous reviews and doesn’t let the businesses themselves pay for their own highly recommended ratings (which explained why Todd was eager to have us comment on his services), and Angie’s List now says it has more than one million paid memberships.

The cost to access Angie’s List for a would-be user depends on what types of ratings they want to see and for how long. A combined wellness and services bundle costs $5.20 a month. But it goes down to $2.67 per month if you sign up for four years for $128. (And so the question, naturally enough, is: where is the eager, clever marketer ready to do something similar – a positive site to go to for trustworthy information, and not just a place to complain about the usual run of terrible service – in South Africa?)

This Indianapolis, Indiana-based company says it lost $27.2 million for 2010 and $43.2 million for the first nine months of 2011, but this is largely because it is spending on marketing to attract new users – like those now-ubiquitous television commercials keeping us from our next fix of “Star Trek”. It clearly has some venture-friendly backers who feel it is ready to go on to the next level.

In spite of all the gloom and doom so easily available, just under the surface of the American landscape, perhaps there is more of Joseph Schumpeter’s internet-based creative destruction taking place than we are sometimes led to believe. And, no, this author didn’t get in on the ground floor of this IPO – but you can bet he wishes he had. DM



Read more:

  • Angie’s List Gains 25% in IPO on CNN;
  • Angie’s List IPO: so maybe a paid-membership business model can work on TIME Money.

Photo: REUTERS

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