The micro-entrepreneur: the untold story of digital transformation

When talking about digital transformation and the impact of the covid-19 pandemic, we like to think about how large companies transformed themselves, but equally important is the untold story of digital transformation happening with micro-entrepreneurs during the pandemic. I’d like to tell the story of a small residential cleaning business owned by Renato and Veronica and how they transformed an traditionally manual business with a digital-first approach.

When talking about digital transformation and the impact of the covid-19 pandemic, we think about companies like Zoom or e-commerce and delivery companies like Amazon or DoorDash, but equally important is the more subtle and “hidden” digital transformation happening with some micro-entrepreneurs during the pandemic. I’d like to tell the story of a small business, owned by Renato and Veronica. This Brazilian couple came from Santa Catarina, a state in the south of Brazil and had prior experience in cleaning services in the United States. They felt they had reached a point at which they wanted to build their own residential cleaning business. Their timing was challenging though, because a month after that decision the covid-19 pandemic showed its force and lockdowns started to take effect.

Renato’s and Veronica’s challenges and opportunities were part of a broader trend we saw happening in the services space. Companies that didn’t have a workflow that involved digital tools and presence were struggling during the pandemic. Many client-facing trends were accelerated during this unprecedented situation. For instance, according to research by Hubspot, 60% of smartphone users have contacted a business directly using the search results. According to eMarketer, 82% of customers read digital reviews for local businesses. Finally, according to a Mastercard poll of 17,000 consumers in 19 different countries during covid-19, it was found that consumers found contactless payments as “the cleaner way to pay”.

The companies that were able to systematize and digitize their day-to-day were able to grow while many of those that stayed with pen and paper ceased to exist. The digital mover sought to find more efficient ways to run their businesses and to implement ways to improve their digital presence and digital forms of interactions with their clients and prospects. When Renato and Veronica reached out to us with the challenge to start a cleaning business during the pandemic, the most important theme that we agreed on was to ensure they were on the right side of the these digital trends.

We helped the couple by creating a systematic process of acquiring customers, managing their work, and delivering their service by assembling together several tools they could use directly from their phones. We ended up using 9 different tools: Facebook (pages) for digital presence, Google (Voice, Forms, Sheets, and Calendar) for workflow and client management, WhatsApp for internal communication, Zillow to adjust estimates, and Venmo/Zelle for contactless payments. By combining these different tools, even though there were inefficiencies because there was no one intuitive mobile-friendly tool with all these features in one place that would also fit their budget, we helped Renato and Veronica build an integrated workflow of client outreach, quoting/estimating, scheduling, reminding, invoicing, and client communication, also reducing miscommunication due to language barriers by using automatic translation features from Google.

In less than 2 months, the couple was able to create a $5000/month business that was also growing efficiently in number of prospects and having an easier time to up-sell customers on additional services. A striking statistic during the same time was that, according to a survey by the National Domestic Workers Alliance, 72% of residential housekeepers reported they had lost all of their clients by the first week of April. When we talked to many micro-entrepreneurs about their challenges during the pandemic, they explained that clients were choosing not to continue with services due to safety concerns, but also that clients were switching to services they deemed “more professional”. Diving deeper into this second argument by interviewing end-customers as well, we confirmed the overall trend we initially saw in the statistics: the weight on quality that was given to businesses that had digital presence. While Renato’s and Veronica’s business growth can’t be all attributed to their digital-first approach to running their business, we believe the feedback they received from impressed clients, the word of mouth and increased reviews, and the ability to track and organize their business efficiently definitely helped.

Just as we saw with large companies and tech startups on how they adapted and were able to leverage some of the accelerated trends during the pandemic, with others not being quick to change, the story of Renato and Veronica prove that these digital transformations can be seen throughout many businesses, big or small, and in many sectors. The future of many an industry will inevitably favor the digital player.

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Student comments on The micro-entrepreneur: the untold story of digital transformation

  1. The micro-entrepreneur who was already digitally transformed or who could quickly adapt by going digital in the pandemic were huge winners. In a Deloitte report commissioned by Google in 2017, they found that 80% of small businesses in the U.S. were not taking full advantage of the digital tools available to them. The small businesses that were fully optimizing however experienced 2x the revenue growth per employee, experienced 4x the revenue growth over the previous year, and were 3x more likely to have created additional jobs from the year prior. The story of Renato and Veronica is definitely a common pandemic anecdote for those micro-entrepreneurs who were agile enough to take advantage of the digital tools described in the blog post.
    https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/connected-small-businesses.html

  2. I come from a community predominantly run by micro-entrepreneurs, particularly Hispanic/Latino like Renato and Veronica, where technology adoption always becomes an uphill battle. This is mainly rooted on a lack awareness on the potential benefits of these technologies (such sales management tools, digital operations, etc), language and cultural barriers, and lack of access to the required training. Several organizations have attempted to address this issue via educational and communication campaigns: https://hispanosemprendedores.com/en/pasos-para-digitalizar-una-empresa/

    As a consequence, some of these micro-entrepreneurs struggle with getting access to financing and competitive loan options — given that they don’t have the necessary data to defend some of their business goals. There are also inefficiencies regarding business operations that are not properly captured due to the lack of data, preventing micro-entrepreneurs from growing.
    https://www.forbes.com/sites/giovannirodriguez/2018/03/11/stanford-study-latino-startups-are-growing-in-numbers-but-are-underbanked/?sh=42d5e243230c

  3. Very interesting story! To be honest, I found it quite surprising the fact that there wasn’t a mobile-first tool available to help Renato and Veronica to go digital. Developing an easy-to-use and accessible mobile app that solves this problem might prove to be a very promising business opportunity.

  4. Fascinating angle on the prompt. While the prevailing narrative on COVID’s impact has been about how its helped big businesses and hurt small businesses there are definitely plenty of small businesses which have been able to use the disruption to catalyze and grow their business. Related to your post has been the emergence of the “side hustle”. It will be curious to see how many of the next generation of successful small businesses will be able to trace their roots to this.

  5. After reading a so inspirational success case, I wonder how many other Renatos and Victorias are out there, struggling to adapt their small businesses to a digital world. I think governments or NGOs should provide them with plug-and-play toolkits, mentoring and training in order to maximize their chances of surviving and staying profitable under the new rules of the game.

    1. +1, Tomas!! Governments, NGOs and international organizations should definitely supporting micro entrepreneurs with mobile tools and trainings!

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