Digital Business Services

There are over 28 million businesses in the US that have under 500 employees (“SMB”) accounting for over 50% of the working population, and generating 65% of new jobs.

As consumers with smart phones constantly at their fingertips, SMB owners have become more comfortable than ever before using technology in their daily lives to search for, order from, discuss and review their business online. However, as business owners, they have only just begun to move away from expensive manual processes, inefficient middlemen, and traditional, on-premise software tools. Increasingly, SMBs are looking towards cloud-based tech to meet their needs.

Advancement and proliferation of technology have already had a profound effect on SMBs, and by end of 2015, the SMB share of the cloud software and services market is expected to reach $28 billion, representing almost half of the total opportunity. However, the SMB market remains tough to crack, the key issue being that SMBs are perceived as overwhelmed, unsophisticated, hard to reach at scale, and squeezed for cash.

Although the SMB market is diverse, composed as it is of multiple micro-markets with differing needs, all segments require access to capital, management tools, human resources, professional services, working space, and exposure to potential clients to grow and sustain their businesses.

Within these spaces, we look for:

  • Companies that democratize access to tools and best practices previously available only to the enterprise via software that automates previously manual servicing costs.
  • Technologies that solve critical pains via “Uber-like” one-click experiences that fit into existing daily habits or that re-invent inefficient workflows for specific vertical segments.
  • Companies that eliminate dependence on middlemen via re-application of low-touch, highly personalized, digital-enabled B2C sales and monetization models.
  • Companies that aggregate demand and supply in specific verticals via low cost distribution models and transparent servicing models enabling trust and market growth. 

LionBird I investments in FundBox, Bento, Staffly and Bizzabo exhibit the opportunity we see unfolding in this space.