What is the “Real” Addressable Market?
Neal Polachek
Board Advisor – vSplash/BuzzBoard
November 19, 2013
- Former CEO – The Kelsey Group and President – BIAKelsey
- 20+ years as industry analyst
- Board advisor for, and consultant to, large and small companies
Who am I and Why am I Here?
Why do we Care about SMEs
It is where Local and Social Intersect
Some Key Trends/Facts
• SMEs: 95 – 98% of Business establishments in most countries
• SMEs: employ upwards of 67% of private sector jobs in developed markets
• SMEs: drive as much as 50% of GDP in developed countries
• SMEs: drive a smaller % of GDP in developing countries but this % is increasing
160 - 200 Million Identified SMEs
North America; 0
Western Europe; 0
Eastern Europe; 0
Latin America; 0
Asia; 1
ROW; 0
Sources: Various Government Sources
SMEs Swim With the Sharks
And the Sharks Want Their Food
1999 – First Wave Kelsey Local Commerce Monitor - Illustrative
Yellow Pages; 70%
Newspapers; 15%
Direct mail; 10%Leaflets; 5%
Easy to Evaluate, Easy to Buy, Easy to Sell
Little fragmentation
& high margins all
around
By 2013 – It Looks More like This - Illustrative
15%
10%
5%
10%
10%15%
10%
5%
10%
3%4% 3%
WebsiteSocialLanding PagesBlogsMobileVideoLeafletsIYPPrint YPNewspapersRadioTv
Difficult to Evaluate, to Buy, to Sell
High fragmentation
& low or no margins all
around
SME Commerce Meets SME Cloud
SME Share of Cloud
Computing by 2015 = 65% or
$30B USD*
SME Share of Cloud
Computing by 2015 = 65% or
$30B USD*
SME Share of Global GDP of $70T = 40% or
$28T USD
SME Share of Global GDP of $70T = 40% or
$28T USD
*Source: McKinsey 2011
Market
Market
Connect
Connect
Transact
Transact
Commerce Solutions for SMEs
Market
• Traditional and Digital– YP– Search– Newspaper
• eCRM– eMail, rep mgt.
• Web presence– Mobile, responsive
• Social – Blogs, social updates
Acquire and
engage customer
s
Connect
• Connectivity– Broadband– Wireless
• Devices– Desktop– Tablet– Mobile
Connect with
customers
Transact
• POS – Square– Xyz– Etc
• Accounting – Billing – AP/AR– Taxes
Transact, track, bill
and collect
Market Size – 2013 and 2018
140
207
18
206
269
30
MarketConnectTransact
$365B $505B
Just Over 1% of SME GDP (assumes SME Share of GDP is 40%)
Advertising and Devices Today
Advertising; 0.27
eCRM; 0.02Web Presence; 0.01
Social; 0.08
Wireless Device; 0.34
Computing Device; 0.1
Wired Connectivity; 0.13
Accounting; 0.02Transaction; 0.03
$365B
Conversations and Content - Tomorrow
Advertising; 0.15
eCRM; 0.02Web Presence; 0.02
Social; 0.22
Wireless Device; 0.32
Computing Device; 0.12
Wired Connectivity; 0.1Accounting; 0.02Transaction; 0.04
$505B
Penetration Rates will Change
3126
33
9
59 57
39
2126
3036
68
40
87 85
4043
49
2013 2018
Market Connect Transact
And the Money will Flow . . .
100
6 5
30
123
3847
7 10
78
9 9
109
161
5850
1218
2013 2018Market Connect Transact
