Why we care about Small Businesses at Vaya
Our focus on small businesses statistically and emotionally
Why small businesses? The question inevitably comes with a quizzical expression probing whether there is some web3 or blockchain angle in there somewhere. After two years of building Vaya and explaining what we do at interviews, investor meetings, family dinners and the occasional cocktail party, I can now see that look coming: why focus on small businesses of all things?
In my weaker moments, I respond with statistics. There are plenty of those to justify why I am — and maybe we should all be — so passionate about small businesses. Let me share a few in the context of the US where we work and India where most of our team are based. I’ll limit myself to three:
Most business are small businesses. In the US, there are a little over 33m small businesses which is 99.9% of all businesses[1]. It’s pretty similar in India where there are 63m small businesses[2] compared to ~1.5m registered companies[3].
Small businesses provide jobs. Nearly 62m or about 45% of all employees in the US work in small businesses. In India, roughly 110m[4] out of a total labor force of about 477m[5] are employed by small businesses (23%).
Small businesses drive economies. In the US, 44% of GDP is generated by small businesses [6]. In India, small businesses have contributed to about 30% of GDP over the past decade[7].
In my better moments though, I invite the person to share who comes to their mind when they think of a small business. Given the sheer number of such businesses, it usually doesn’t take long for them to think of someone they know personally: a parent who runs a print shop, the florist near their office, their neighborhood bartender. In India, the person might think of the family that runs the small grocery shop on their street corner.
When I ask myself the question of who, the faces of many small business owners and employees I have met over the years flip through my mind. But the one that sticks is my own face as a middle school kid delivering the local paper.
Everyday, a truck from the Daily Mining Gazette (circulation: 5000!) would drop off a bundle of the day’s paper at my house, and I’d walk through the neighborhood with my yellow paper bag and drop them off to subscribers’ doorsteps. Somedays I’d try to sell to new customers, and other days, I’d linger to collect the subscription fees that were mine earnings (minus the wholesale cost of the paper).
It was hard work, often in tough winter weather, and frustrating too because people didn’t always pay on time. Still, I felt a lot of pride in getting the job done. I felt a sense of empowerment too in being able to buy myself a mountain bike or movie tickets instead of having to nag my parents.
I think that’s the thing that I love about small businesses. Each one has these elements of hard work, risks and challenges on the one hand and on the other there is pride, self reliance, autonomy and other rewards. Beyond all of that though, each has story about the people themselves and collectively, the communities they live in.
In the next few posts, we’ll dig a bit more into what we really mean by small business, what challenges they face, why access to credit is such a big deal, and how our work at Vaya serves small businesses. By the way, if you’re interested in our work and are interested to find a way to get involved, please get in touch with us on LinkedIn.
My thanks to Achuth Kandikunnta and Yashi Pandey for research and general support for this post. Originally published on LinkedIn on Feb 2, 2023.
Notes
[1]: Small Business Profile 2022 US SBA Office of Advocacy
[2]: MSME India annual report FY 2022, page 25, Data from 2016 NSS.
[3]: Monthly information bulletin on corporate sector June 2022, page 11
[4]: MSME India annual report FY 2022, page 28, Data from 2016 NSS.
[5]: World Bank, World Development Indicators database. Estimates are based on data obtained from International Labour Organization and United Nations Population Division. Data point from 2021.
[6]: Small Businesses Generate 44 Percent Of U.S. Economic Activity 2019