Google's Irish Export Growth Initiative

Circa 1988 there was a BBC program on UK/China small business trade upon which I commented, and made predictions, and wished they would do a follow-up at some time.  Well, in 2012 they indeed did a follow-up, and my predictions were proven fairly accurate.

Now comes Google in an effort to build small business international trade, and an interesting article on their efforts. The effort is based in Ireland, which makes me think it is largely a political effort, given Ireland's favorable tax regime, and criticism of google-ish tax avoidance endemic in big biz.  But to their efforts:

"All the statistics we have and the ones done by third parties suggests that if you have a business and embrace digital as a route to market - and you set up a website to connect with customers -that you'll grow your exports twice as fast. So my challenge should be that every business in Ireland has a website and if they do then exports should grow twice as fast," he told the Sunday Independent.

"Suggests?" This sounds like Amazon and their "we know ecommerce is not profitable, so we are introducing some new ideas sure to work."  President Obama in 2009 announced he was going to double USA exports by 2014.  Not even close.  Google wants websites up, of course.  There is no digital route to market.  There is zero to suggest a website to connect with customers will grow your exports twice as fast.  Correlation is not causation.

What does that even mean?  Twice as fast as what?  Over what time period?  From 1% growth to 2% growth over ten years?  If so, at what cost?  Both out of pocket and opportunity cost?

And this is classic survivorship bias.  The only evidence studied is a few standing businesses, not looking at the countless failed efforts at "digital as a route to market".

If and when google can announce marketing online is a less expensive way to gain customers than the traditional alternatives, then that will be new.  They cannot, or they would have.  The problem with online marketing is the cost of acquisition of a sale is almost always, like 99.9999% of the time, is greater than any possible profit.  When that changes, I'll be the first to announce it.

Google has set up a "global export team" which now advises its customers on how to export. There are three different types of clients, he says.The first group are businesses that have never exported. Google supplies these clients with search data that shows if there's demand for their products overseas. For example, an Aran jumper firm could see how many times the phrase 'Aran jumper' is searched by consumers from Osaka, Japan - indicating demand and a potential new market. Simple steps such as translating a website into Japanese could drive sales.

Wow.  That would tell anyone asking absolutely nothing.    On the other hand, one could spend the same time at the USITC.gov website and find out the dollar amounts of wool sweater sales from USA to every country in the world, and the price paid by the importers around the world to USA exporters, plus trends over the years in dollar and quantity, and which ports used, etc.  (There is such Irish trade data too, as there is for most countries worldwide.)  At given price points, you'd know which countries tended toward finer specialty sweaters, and then you could target that country.  Google speeds things up thereafter, but recall trade did just fine for the 5000 years before google was developed.  Fast does not matter if one lacks quality products to begin with.

Secondly, Google advises businesses that already export into some regions to find out if there is demand in other markets. Free online tools can highlight potential new countries or markets for trade, by evaluating customer behaviour or search trends

Here are search trends again.  Waaaay to week a source of info, compared to hard data one can see: time and money spent by people in trade.  Not sure what google can offer in the way of evaluating customer behaviour, but any business that does not have "evaluating customer behaviour" already built into its internal processes is not going to prosper on anything google has to offer.  Evaluating customer behaviour is a fundamental business process, not something that can ever be farmed out.

Thirdly, Google can help firms that already export globally to find and refine new markets or product sets. It could be something simple like showing that Nigerian customers search for green Aran jumpers more than any other type of product.

But doesn't customer feedback do that anyway?  The premise here is google's macroview can supplant the need for a microview.  If so, that would be golden.  But it can't.  The microview is what has driven success at the small biz level for 5,000 years, and I can see nothing google is offering now that would obviate the need for the necessary microview.  It is the microview from which the business is launched, so it is already there, can't be supplanted, but as an offer (you can build a biz on search terms) no doubt many people will jump at the offer to be successful (should grow twice as fast).

It's not in the mix.   Ain't gonna happen.

Don't get me wrong, I love google.  They drive the sales of my book for over a decade, and I use them constantly.  But nothing has happened in the last 30 years to improve doing business one way or another.  It is no harder nor easier to make money, find producers or customers, or transact business.  somethings are faster, but the fundamental offer is still decisive.  There is more information, but it is no better.   It's more accessible to you, but it is so to everyone else too.

The people who fall for these "new ideas" get trapped wasting time in flash and bang and miss the better stuff and solid means to building business.  That means we are denied the good of peoples productivity while they waste time and money in fruitless pursuits.    One reason I teach small business international trade on the side is to correct that.

Last Saturday I taught in Portland Oregon.  Participant Hamidreza Rahmzeda took the class and appreciated the IPR arguments; Garrett Pfaff appreciated the way start-up was clearly laid out; they both said I could quote them, and all participants rated the seminar highly on all counts.

This Saturday I am heading straight into Google territory to offer the same seminar at San Mateo College just south of San Francisco.  If you want in, enroll here now to assure a place in the class.

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