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Our month-long special report on micro-entrepreneurship is drawing to a close, so we sat down for a Q&A with the sponsor of the series SageOne. SageOne was interested in sponsoring this section, because their product is aimed specifically at companies with nine or fewer employees. Everyone who builds a product for small businesses likes to cite what a huge market it is and how much of the US economy it dominates.

Sure. But the size and fragmentation of the market makes it a brutal one to sell to. That’s one of the reason that so many of them still don’t use business software despite many tech companies’ best efforts.

I talked to Sage’s manager of project management, Mike Savory, about the process of building the product and what he believes the biggest forces in the rise of the micro-entrepreneur have been.

What made you think the world needed this product?

We are very data driven, and we were watching customers use our products. They were using such a small percentage of it, or they weren’t using it correctly, and they were genuinely wanting to use it correctly. They had to be hassled by an accountant or be really self-motivated. They needed help to do it correctly. Moving to a cloud product is like hitting a reset button. It allowed us to rethink: What are those core features that customers really need? Let’s take another approach to usability.

When we asked why businesses were still using pen and paper and spreadsheets, it was because there were too many features of the software for their businesses.

Even if you write usable software, isn’t there still that fear of you have to learn a new system?

We found that younger generations are more willing to adopt the cloud, but the change in their general expectations of software are quite a bit higher as well. They don’t have patience for poorly designed products or products that are cobbled together. They are looking for the best solution. Our new challenge when they come to our site to look at our product is the need to quickly explain what our value proposition is in very simple terms. A big part of our discovery is that a lot of these folks need basic tools of efficiently communicating and sharing files and sharing schedules. A lot of these people are working out of their houses and collaboration is a really big deal for them. No enterprise tools make it easy.

I don’t think anyone would deny that micro-busineses are a big market, but it’s a near-impossible one to market to, because it’s a lot of effort, and the sales sizes are still small. Do you have a solution for that?

The first thing you have to do is build a product worth talking about. If people are excited and telling their friends about it, that’s better than any marketing channel or message. We’ve had to do more one-to-one type interactions than we’ve been used to in the past. We were more of a mass marketing company before, and that had worked well for us. The challenge is having these personal interactions to tell people about the product and figuring it out in a scalable way.

The other issue was terminology. How do you make yourself be findable in this world where everyone is speaking different languages? In the traditional software world, “ERP” was a term everyone used. In the small business world, if you don’t have a financial background, you don’t have a basis for knowing that language. That was totally eye-opening for us. A lot of our basic terms like “reconciliation,” we figured, were a fairly basic thing. Small business owners don’t use that term, or they just don’t reconcile in the same way than in the past, because it works in real time.

That’s what leads to the frustration. No one talks their language.

The series you guys have sponsored for us is on the rise of the micro-entreprenur. What do you think has been the biggest cause of this swell of self-employment? 

We saw so many stories of people starting companies after 2008, because they were let go from their jobs, and an idea had been percolating for a long time. They were finally given the opportunity to make that come to life.

In terms of tech, there have been so many things. Infrastructure and software is cheap or free. You have open cloud services that are so much more accessible than they were before. Web-enabled microVCs have come together in a way they haven’t before.

Services like Elance and oDesk make it much easier to find jobs and put jobs out there. It seems there’s just a plethora of tools out there that makes people feel more empowered than they could be before.

For very little money, you can produce professional invoices and do all these things that look and feel like a big business. That gives micro entrepreneurs the confidence they need.

What’s the biggest challenge for today’s micro-entrepreneur? 

I saw this real struggle with focus when it came to these corporate refugees who were laid off or came from a big business. They are used to a world where each department managed each facet of the company, and suddenly they are responsible for every one of those things.

They have to manage the books and make sure their name is out there, and then there is social media to be on.  Most of those things take them away from the job at hand, and the reason they get into this in the first place. I don’t know how much software can fix that, but we at least can provide a tool these guys can use as little as possible, so they can get back to work.

Little things can eat up big chunks of your time. Sage One takes things off your plate. Get to the real work. Learn more. (Sponsored message)

[Image courtesy j.reed]