The Credit Junction's Chief Technology Officer, Daniel Seltzer, shares his thoughts on how technology can help protect and grow your small business. Read his interview, below.
1. How is technology changing the small business landscape?
I think that the biggest thing is that small businesses used to be a lot more limited in their access to markets, services, and partners by their locality. A perfect example is that if you needed to find something, you looked in the Yellow Pages. Today, you can look for capital, raw resources, human resources, and customers anywhere in the world. There are now marketplaces where you have access to an incredibly large, global scale market for whatever it is that you do in your business.
You may be a small business, but your potential reach within the ecosystem you play in is now much larger. Being able to do that requires understanding the technology well enough to know the assets and liabilities associated with doing so.
2. Businesses today face risks from all types of online threats, what steps should small businesses be aware of to better protect themselves?
I think that the biggest problem is that there are plenty of bad actors out there. They are economically motivated to prey upon vulnerable small businesses. Generally, they are going to go after victims that have assets that they can get. Therefore, larger companies are wealthier targets, but they are also better protected.
The problem is that the bad guys have all of the good weapons, and it is a lot easier to attack than to defend. There is no single thing that a small business can do to defend itself. It must raise its security IQ, which is a hard thing to take on, as there is so much that you have to learn. There are a lot of people that will try and sell you things, like anti-virus software, which don’t even protect you that well. There are many resources out there, however, that any small business can use to learn more about vulnerabilities.
What most people don’t realize is that the easiest way in for bad guys is by guessing or stealing your password. That’s why MFA (multi-factor authentication) is so important. All the major online services and banks support it now -- it makes it much harder to get hacked. There’s some very useful stuff in this PC Mag article.
3. What technology tools are available for a small business to compete with larger businesses?
From my own experience, there is a sweet spot where technology becomes commoditized, valuable, affordable and stable. That’s where small business owners need to look for solutions. Too soon with a new technology, and you’re paying for it to mature. Too late and your competitors are using it to gain advantage already and you have to catch up. Finding that balance isn’t easy, but it can yield great results. For example, there are now email marketing tools like Constant Contact or MailChimp that are pretty sophisticated, yet extremely affordable. Another example is accounting, which can now be done far more efficiently online.
Today, you can also buy expertise. Great examples of this are Task Rabbit and Amazon’s Mechanical Turk, where you can pay for small tasks to be done by experts in a field. These are the kinds of resources that did not even exist in the past, made possible by the Internet and a rich ecosystem of companies that have sprung up around it.
With The Credit Junction, what we are doing is a great example of taking a critical service for business, which is access to capital for growth, and making it available online through technology. We couldn’t have done that 10 years ago, but now the pieces are in place to cost-effectively allow applications on-line, pull together the data we need, and serve small and medium-sized businesses in ways that traditional banks can’t.
4. You have seen technology and software tools help companies over several years, what pieces of advice would you give to small business CEOs of where they should make investments?
There are many tools available that are worthy investments of time and money. The key is just choosing the right ones. Unfortunately, people tend to get seduced by how compelling the promises of certain tools are. Save money, work faster, be super-efficient… A magic silver bullet. Unfortunately, this just doesn’t exist. There are real efficiencies and advantages in assets that you can get, but the biggest piece of advice for a small business owner is to become very skeptical. With regards to security, it helps to develop a bit of paranoia. With regards to investments in technology, it helps to develop some skepticism. It is important to develop a diligent approach to ascertaining the true value of a technology offering. You cannot take it at face value from the sales people who will tell you exactly what you want to hear.
Another hard lesson for a small business is that technology is not something that you buy and it just works. Technology is a part of a process; it is a way of doing business. When you invest in a piece of software or a service, you have to train and learn how to use it, and the service will change over time. You will have to train your people in it, you will have to understand the risks associated with it.
Finally, finding technology expertise that can consult to help your business often appears to be expensive, but will very quickly pay for itself. The trick is finding something good, of course. But, you need an advisor. If it is something that you have never done before, you are either paying for the learning curve, which can be very expensive, or you must find someone to be your guide. I think that finding a trusted resource which can help with the things that you don’t know much about is always a good idea.
I think that ultimately, for a business owner, you have to understand the critical importance of data. Ultimately, you have to know what data you have, where it lives, how secure it is, how to improve it, and how to export it.
5. What advice would you give to a small business owner looking to hire technologists?
It’s not always important that a technologist know your business -- but they need to be able to learn it. In general, if you understand what a business needs, and you can figure out how to address that with appropriate tools that are cost-effective, that is really valuable. Be wary of someone who starts with the solution instead of finding out about the problem first. A mature technologist doesn’t think about technology first. Maybe not even second. They think about humans, goals, culture, cost/benefit, and available solutions. Building something new is expensive and risky and really has to be justified carefully. Someone who rushes to build a solution on a customer’s dime is immature and irresponsible. They may have the best of intentions -- I certainly did when I was younger :-)
Ultimately, you need to have trust that this person is going to guide you in a way that’s aligned with your interests. So make sure you can be clear about your goals and the problems you face, and that they understand and ask in depth about them.
About Daniel Seltzer:
Daniel translates the business vision into a technology strategy and leads the product development team. He has served over 100 companies in finance, education, media, health and publishing, from small startups to Fortune 100s including Citibank, MasterCard, and Goldman Sachs. Prior to joining us, Daniel directed the Innovation and Entrepreneurship program at Mount Sinai in NYC. Daniel graduated from Wesleyan University.