There is an allure of independence, of freedom, associated with owning your own business. It can be quite tempting to stretch out on your own. But it isn’t all it’s cracked up to be. I know because I use to have one. And after it had survived over 50 years, it was ultimately done in by a Penguin!
According to the Small Business Administration Office of Advocacy, as of March 2023, there were over 33 million small businesses in the US. These figures show that for the year 2020, 1.07 million new small businesses were opened. That sounds encouraging doesn’t it? With so many people doing it, it must be easy? On the contrary. Those same figures show 1.02 million small businesses closed in the same year. And the numbers were not skewed because of the pandemic. The SBA shows these figures are in line with statistical averages. Between 1994-2020 67.7% of small businesses survived to their 2nd year, 48.9% survived to their 5th year, 33.7% survived to their 10th year and just 25.6% made it to 15 years. Pretty grim statistics.
That said, my business had survived past 35 years when I took over, the third generation of the family. So we were doing better than statistics, but the internet would change that. Like many other businesses, as the internet grew and peoples shopping habits started to shift online we greatly expanded our online presence. And online shopping was good to us with as much as 80% of our revenue being generated online. We were early adopters of the internet and we had an advantage. Most small businesses, especially one selling hobby items, could not afford to build a large online presence. In the early days there were not simple tools available to the average small business to get their catalog online. Our advantage was me.
I had taught myself several computer programming languages, web page (HTML), graphic and image editing, and database languages. This savings allowed us to sell online at scale that our competitors couldn’t because we didn’t have to pay a 3rd party web developer. I not only handled all the web site development, but also all of the search engine optimization. This is the process of making the pages more likely to come up higher on internet searches for the keywords of the business. Our site always came up in the top 10, first page, search results in almost every search engine. So prominent was our website that I actually had a competitor call me and ask me how I did it. She was a friend of my mom so I told her. From what I saw they never replicated my success with their site.
Back then there were dozens, even hundreds of search engines. Before the time when Google ruled everything. We had Google and Yahoo, Lycos, Alta Vista, Web Crawler, InfoSeek, AllTheWeb, and countless more. Lots of companies jumped into the online search market. But the operational realities soon overtook them. Many closed, some just started to pay for search data from Google. Now we basically have Bing, Yahoo and Google. And even Yahoo was powered by Google for a while before switching to Bing. And as we all know, Google is the power house in the search market. If you own a business that has an online presence, you are aware of how much influence Google has over traffic to your website.
As the internet grew, not just as an information superhighway, but as a mecca for online shopping, more and more companies hired web developers to edit their web sites to come up in top search results. The gold standard was being in the first 10 results. If someone searches for something and your website doesn’t come up on the first page of Google, chances are high that those shoppers will never see your site. Google quickly caught on that businesses were manipulating search results and started to work against this tide in an effort to have what, in their view, were the most relevant and highest quality links in their top search results. This created a cat and mouse game. Developers would edit web sites to get top results, Google would then change their algorithms to overcome this manipulation, and so on. That was until Google released their ‘nuclear’ option.
Fighting a battle with Google wasn’t the only challenge our small business faced. The economy took a hit after 9/11 as consumers pulled back on discretionary spending. Then there was the recession of 2008 following the mortgage meltdown and foreclosure crisis of 2007. Early gains made in online retail were eroding due to competition from growing big-box retailers and online ‘gargantuan’ Amazon who was offering free shipping. We persevered, carving out a niche online, and fighting the endless battle against Google algorithms.
Then on April 24th, 2012 our website disappeared from Google. Or so we thought. Suddenly instead of being in the top 10 results for dozens of keywords for our industry, we had fallen to page 20, sometimes further. I spent days doing research until I learned the reason. Google had released their nuclear option, the Penguin. Not an actual penguin, but a search algorithm called Penguin. Unlike previous algorithms that could be defeated by rewiring the code and content of pages on your web site, Penguin looked beyond your site.
They looked for reviews and ratings from third parties, what we would now call influencers. If you sold products they wanted each product to have unique, original customer star-ratings. They wanted links from media sites with articles about your company. Most importantly, they wanted feedback links from social media. There was no formula for how much weight Google applied to each requirement. No way to reverse-engineer their algorithm. And Google didn’t stop there. Over the next 2 years they continued to tweak Penguin, adding more requirements. There was just no fighting the Penguin. So successful was this algorithm that it is now part of their core search code. Successful for Google, but for small businesses like mine, it was the coup de grâce.
After surviving more than 50 years, my family business is now gone. I spent over a decade back in the work force after that. As a manager in a real estate firm and vice president of a construction firm. The computer skills I taught myself served me well, both in my civilian career, and after I re-enlisted following 9/11. I retired last year at the age of 57. Well, I say that I’m taking a break from work, but my wife wants me to just be retired. That may be another losing battle for me. When my wife and I are not traveling the country in our RV, we can be found playing with our new granddaughter in Washington state. Last September we took her to the Oregon Zoo and of course we had to visit the penguin encounter!