[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
THE DIGITAL ECOSYSTEM: NEW PATHS TO ENTREPRENEURSHIP
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON INNOVATION AND WORKFORCE DEVELOPMENT
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
MAY 9, 2019
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 116-019
Available via the GPO Website: www.govinfo.gov
___________
U.S. GOVERNMENT PUBLISHING OFFICE
36-209 WASHINGTON : 2019
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
ABBY FINKENAUER, Iowa
JARED GOLDEN, Maine
ANDY KIM, New Jersey
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
JUDY CHU, California
MARC VEASEY, Texas
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
ADRIANO ESPAILLAT, New York
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANGIE CRAIG, Minnesota
STEVE CHABOT, Ohio, Ranking Member
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
TRENT KELLY, Mississippi
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
Adam Minehardt, Majority Staff Director
Melissa Jung, Majority Deputy Staff Director and Chief Counsel
Kevin Fitzpatrick, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Jason Crow.................................................. 1
Hon. Troy Balderson.............................................. 2
WITNESSES
Ms. Kellyn Blossom, Head of Public Policy, Thumbtack, San
Francisco, CA.................................................. 4
Ms. Erika Mozes, Co-Founder and COO, Hyr, Inc., New York, NY..... 6
Ms. Olivia Omega Wallace, Co-Founder, Wallace Marketing Group,
Aurora, CO..................................................... 7
APPENDIX
Prepared Statements:
Ms. Kellyn Blossom, Head of Public Policy, Thumbtack, San
Francisco, CA.............................................. 25
Ms. Erika Mozes, Co-Founder and COO, Hyr, Inc., New York, NY. 30
Ms. Olivia Omega Wallace, Co-Founder, Wallace Marketing
Group, Aurora, CO.......................................... 32
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
None.
THE DIGITAL ECOSYSTEM: NEW PATHS TO ENTREPRENEURSHIP
----------
THURSDAY, MAY 9, 2019
House of Representatives,
Committee on Small Business,
Subcommittee on Innovation and Workforce
Development,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:03 a.m., in
Room 2360, Rayburn House Office Building, Hon. Jason Crow
[chairman of the Subcommittee] presiding.
Present: Representatives Crow, Houlahan, Kim, Finkenauer,
Davids, Balderson, Burchett, and Joyce.
Chairman CROW. Good morning. The Committee will come to
order. I thank everyone for joining us this morning. I want to
especially thank the witnesses for being here today.
We all know how much the Internet has changed our lives,
but the most dramatic impact it may have had is the
opportunities it has provided small businesses. Twenty years
ago, there was no Google, YouTube, or Facebook, companies that
started small but eventually turned into major brands. Much of
this is made possible by the internet and its ability to
connect people in ways unheard of just a short time ago,
allowing small businesses to compete with larger competitors.
One of the first ways small businesses utilize the internet
to start and grow a business was through the use of digital
platforms. Digital platforms facilitate commercial interactions
between suppliers one on end, and consumers on the other.
Whether it is reaching consumers out of arm's reach, or hiring
someone to cover a shift, digital platforms stretch tight
budgets and make small businesses much more efficient.
As the online economy evolves, digital platforms are
growing into networks referred to as digital ecosystems where
stakeholders and consumers are tied together by digital
services that foster information sharing and collaboration.
These communal environments have become the catalyst for modern
business models like the gig economy, and the next generation
of digital marketing.
The gig economy term used to describe an emerging labor
marketplace defined by flexible temporary work arrangements is
changing the way Americans view work. Through digital platforms
like the ones that are represented by our witnesses today,
small businesses can hire talent for short-term projects and
benefit from a vast network of unbundled services. Skilled and
creative solopreneurs, like web developers and event planners,
can also use digital platforms to be hired by consumers and
other small business owners. In fact, 70 percent of U.S. small
businesses have hired a gig worker, and 50 percent currently at
least have one currently working. As a result, 43 percent of
businesses hiring gig workers are saving at least 20 percent in
labor costs.
Digital platforms can also help small businesses reach
bigger audiences. In the traditional market space, small firms
must compete with big businesses for expensive ad space.
Digital marketing levels the playing field by lowering costs
and expanding impact. Data sharing within digital ecosystems
also make it easier for small businesses to reach niche
audiences because advertisements are targeted to customers of
similar businesses. This competitive advantage and cost savings
enable small businesses to scale and thrive.
However, many small firms are being left behind. In fact,
even today, a third of small businesses still do not have
functioning websites, and 42 percent believe that the internet
is not relevant to their business.
Unfortunately, many small businesses view digital adoption
as a luxury instead of a key driver for success. As technology
rapidly develops, the digital ecosystem is only going to become
more deeply engrained in business and everyday life. Today,
there are 2.5 billion people connected to the internet, and
there will be twice as many connected by 2020. Studies have
found that 80 percent of companies that have embraced digital
adoption have increased profits by 85 percent. These increased
profit margins can mean the difference between failure and
survival. America's small businesses cannot afford to be left
behind.
So I hope that today's discussion will shed light on the
many ways digital platforms benefit small businesses and
encourage broader adoption of digital tools. Small businesses
must join the digital ecosystem to grow and thrive.
I thank each of the witnesses for joining us here today,
and I look forward to your testimony.
I would now like to yield to the Ranking Member, Mr.
Balderson, for his openings statement.
Mr. BALDERSON. Good morning. And thank you, Mr. Chairman. I
am pleased to join you for our Subcommittee's inaugural hearing
this morning. Good morning to all of you, and a special thank
you to our witnesses for taking time out of your busy day to
join us.
The use of digital technology is gaining popularity with
small firms because of the opportunities it creates for small
businesses to compete and succeed in a rapidly changing market.
Smaller businesses can only compete with their larger corporate
counterparts by acting swiftly and adapting to these demands
produced by increasingly digital modern world. Technology
innovation is a critical component of this development and a
subsequent advantage.
As businesses adopt mobile computing devices and software,
such as cloud computing systems and online conference calls,
employees and key stakeholders are able to communicate and
collaborate around the world in real time. Such innovations
reduce travel cost, drastically improve efficiency, and
eliminate barriers for startups.
Perhaps the greatest benefit of adapting new technologies
is the resulting financial savings. As evidenced by the past
few decades, digital technology increases productivity, reduces
overhead costs, and gives businesses a leg up on their
competition. Increasingly, digital tools and platforms serve as
the foundation of modern American small businesses. Small firms
that use digital tools are more nimble, resourceful, and better
equipped to engage potential customers. In fact, it has been
proven that digital-powered businesses earn twice the revenue
as those that don't, and are three times more likely to create
new jobs than nondigital firms.
The goal of today's hearing is to learn how Congress can
unlock the vast potential of our nation's small business
economy. I look forward to the discussion and further
examination of how technology enables small businesses to
succeed.
Again, I thank my colleague, Chairman Crow, for holding
this important hearing, and for our friendship.
I yield back.
Chairman CROW. Thank you, Mr. Balderson. The gentleman
yields back.
And if committee members have an opening statement
prepared, we would ask that they be submitted for the record at
this time.
I would like to just take a minute to explain the timing
rules for all of you. Each witness gets 5 minutes to testify,
and the members get 5 minutes for questioning each. There is a
lighting system to assist you. Those are the buttons that you
see in front of you. The green light will be on when you begin,
and the yellow light comes on when you have 1 minute remaining.
The red light comes on when you are out of time, and we ask
that you stay within that frame to the best of your ability.
I would now like to introduce our first witness, Ms. Kellyn
Blossom. Ms. Kellyn Blossom is the head of public policy at
Thumbtack. Here, Ms. Blossom focuses on advocating for small
businesses across the country. Ms. Blossom also served as
Director of West Coast Public Policy at Uber, and Associate
Director of Intergovernmental Affairs in the Obama White House.
Before the Obama administration, Ms. Blossom served the
Department of Homeland Security and worked on several
congressional campaigns. Ms. Blossom received a bachelor's
degree from Brown University, and a master of public
administration from Harvard University, the John F. Kennedy
School of Government. Welcome, Ms. Blossom.
Our next witness is Ms. Olivia Omega Wallace, a resident of
Aurora, Colorado, our hometown. Ms. Omega Wallace is brand
consultant and speaker, co-founder of the Wallace Marketing
Group, Denver Director of Brazen Global, and author of
Beautifully Branded, The Girl's Guide to Personal Branding and
Understanding the Anatomy of Brand you. Inspiring women
entrepreneurs is her passion. Olivia helps create--helps women
create authentically unique brands through messaging, identity,
and brand experiences.
Ms. Omega Wallace is a graduate of the University of
Colorado at Boulder Leeds School of Business and has 15 years
of corporate branding, advertising, and digital marketing
experiences. Welcome, Ms. Omega Wallace.
Our third witness is Ms. Erika Mozes. Ms. Erika Mozes Is a
co-founder and Chief Operating Officer at Hyr. Prior to co-
founding Hyr in 2015, Ms. Mozes worked as a public affairs
executive and senior communications professional in government
and on political campaigns. Ms. Mozes received an honor's
degree in political science from Western University. Welcome,
Ms. Erika Mozes.
Ms. Blossom, we will start with you. You are recognized for
5 minutes.
STATEMENTS OF KELLYN BLOSSOM, HEAD OF PUBLIC POLICY, THUMBTACK;
ERIKA MOZES, CO-FOUNDER AND COO, HYR, INC.; AND OLIVIA OMEGA
WALLACE, CO-FOUNDER, WALLACE MARKETING GROUP
STATEMENT OF KELLYN BLOSSOM
Ms. BLOSSOM. Thank you, Chairman Crow, for the opportunity
to speak before you today. My name is Kellyn Blossom, and I
lead public policy for Thumbtack. We are honored to be a part
of this discussion to share our perspective on how technology
can empower America's small businesses.
Thumbtack is a website and an app that connects customers
looking to hire service professionals to hundreds of thousands
of small businesses. Now over 10 years old, Thumbtack
facilitates millions of connections every year. These customers
can find small businesses in nearly a thousand different
categories, from plumbers and personal trainers to caterers and
cat groomers.
Thumbtack was created to solve one of the biggest
challenges facing new small businesses. A Thumbtack survey
found that 43 percent of small businesses say that the number
one concern for their business is finding the right customers.
For independent businesses, finding the next client is a
constant concern. Thumbtack solves that problem by connecting
customers looking for services to the small businesses that
provide those services in their area. We haven't created new
categories of work; instead, we use new technology to grow and
expand the reach of small business professionals that have
existed for decades and make their work more efficient.
On Thumbtack, there are three features that are
particularly valuable to the small businesses that are looking
to grow. First, each small business that signs up on Thumbtack
gets to create their own online profile that they can fill with
information about their business, a story about how they get
started, pictures of their work, and contact information. This
profile can be found directly on Thumbtack. But even more
importantly, it can be found through Google searches or other
online search engines. This is crucial for small businesses who
may not have an online presence, including the 35 percent of
small businesses who feel that their business is not large
enough to justify having their own website.
Second, Thumbtack makes it easy for new customers to find
reviews from past customers. While they are not a perfect
measure, customer reviews have become a key factor that
consumers expect and rely on when purchasing products or hiring
businesses. In fact, surveys have found that over 90 percent of
consumers, age 18 to 34, trust online reviews just as much they
trust personal recommendations.
And third, Thumbtack provides crucial insights to small
businesses about how they stack up in their market. We give
them data on how other businesses in the area are pricing their
services, and how many customers are searching in their
category so they can quickly understand the dynamics in their
industry and market their services competitively.
These features help small businesses grow their business on
their own terms, because too often, technology businesses claim
to be changing the game and revolutionizing the future of work
by simply providing what amount to be often on demand minimum
wage jobs. While these can be great transitional opportunities,
they rarely allow individuals to build a business or expand
their earning potential.
Thumbtack focuses on giving individuals the digital tools
to build not a just a job, but a career and a business that can
scale. We often see professionals on Thumbtack start out as a
sole proprietor, and eventually add employees and add services
as they grow.
And we think that technology can play a role in addressing
other challenges that small and independent businesses face,
like the challenge of accessing benefits.
Earlier this year, Thumbtack was proud to become the first
marketplace company to provide workers access to truly portable
benefits through a partnership with the National Domestic
Workers Alliance, and their Alia platform. The partnership uses
a digital platform to create accounts that independent workers
can use to access paid time off and insurance products.
While the pilot is still in its very early stages, we are
optimistic that we can learn important insights that we can
share with policymakers, so together, we can work to help small
businesses and independent workers close the benefits gap. But
our business is about more than just numbers and data points
and pilots and projects. It is about people. It is about people
like Terrell King from Washington State. Terrell had spent
decades in the service industry, but he was struggling to get
by. He signed up to work for a big cleaning agency, but he
wasn't making enough money to support his family. Frustrated
and out of ideas, he turned to a family member who told him
about Thumbtack. He created his own profile that evening with a
picture and a story about why he loved doing his work. And that
first day he found a customer for a high paying job.
Within 4 months, Terrell went from barely basically to
making ends meet to having his own thriving cleaning business,
paying off his bills, and even bringing on employees to keep up
with the demand. Terrell was able to use technology to take
control of his own career and build a small business that he is
proud of.
People like Terrell are the reason that Thumbtack exists.
And we believe technology is at its best when it empowers
people to achieve their own dreams.
Thank you.
Chairman CROW. Thank you, Ms. Blossom. You had that
perfectly timed, too.
A lot of pressure, Ms. Mozes. You are now recognized for 5
minutes.
STATEMENT OF ERIKA MOZES
Ms. MOZES. Thank you, Chairman Crow. And thank you for
having me here during National Small Business Week throughout
which we honor the small businesses and entrepreneurs that are
central to our economy and to our communities.
My name is Erika Mozes, and I am the co-founder and chief
operating officer at Hyr. I am here to speak with you about the
importance of the entrepreneurial spirit as it relates to the
freelance economy, and how this new economy is providing
economic mobility for millions of Americans.
The structure of work which we support through the Hyr
platform allows hospitality and retail workers to freelance and
earn extra income and portable benefits. Workers like Megan.
Megan began working hospitality shifts through Hyr in the weeks
leading up to Christmas. After the holidays, she sent us
heartwarming message sharing that she joined Hyr to earn extra
money for Christmas presents her daughter wanted most. And
because of Hyr, she was able to give those presents to her
daughter. But even better, after just 3 weeks of working shifts
through Hyr, a company she worked with through Hyr offered her
a full-time job.
And workers like Mandy. Mandy said Hyr allows her to
schedule freedom. Before joining Hyr, Mandy found it difficult
to work in the hospitality industry while starting off her
career as an actress. Because of last-minute audition calls,
she would have to call off from her job or beg coworkers to
cover her shift. But with Hyr, she was able to pick up and
choose shifts that best fit her schedule.
At Hyr, we help workers connect with businesses that are
looking to fill any shift at any time. This helps both workers
and small businesses alike. My co-founder and I understand both
sides of this equation all too well. As hourly paid hospitality
workers at one point in our careers, there were just too many
times that we experienced too much month at the end of the
money. And later in our careers, when we both worked on the
business side, we struggled to find great workers given today's
just ever shallowing labor pool.
To help close the gap, we created a worker focus platform
that connects the two parties. Gig workers on the Hyr platform
are typically already working a full-time or part-time job
within the hospitality or retail sectors, but are looking to
earn a little bit of extra money on the side through our
platform.
And at Hyr, we ensure workers receive those earnings within
3 days after they work their shift. But more importantly, we
created a form of portable benefits called UPoints for gig
workers that accumulate every time they work a shift through
Hyr.
We built the system to address the issues many gig workers
face while they choose to enter the freelance economy. We did
this because a growing number of Americans are choosing work
that is just not 9 to 5. Instead, they are your Hyr pro, they
are your Uber driver, or they are your Grubhub food deliverer.
The gig economy has become a central cog in America's economic
growth engine providing both entry level opportunities and
supplemental incomes.
At Hyr, we set out to fill a massive gap for businesses.
Access to talented workers, fast, and relief from high turnover
and call-offs. With same-day availability, businesses post
shifts on our mobile app by highlighting their specific need,
location, hourly rate of pay, and more. They review skilled and
rated workers who apply for those shifts, and they choose the
workers that best fit their need.
And we set out to fill a massive gap for today's gig
worker. Flexible schedules, supplemental income, and portable
benefits that, again, we call UPoints. Gig workers created
their Hyr profile admittance by highlighting their particular
expertise, their work history, their hourly rate of pay, and
their availability. And they are notified of available shifts
that meet their need, and then they apply for the shifts that
interest them most. At the conclusion of each shift, earnings
are directly deposited in the worker's bank account within 3
business days.
While it can be tempting to view the gig economy as either
primarily beneficial or primarily detrimental, there is still a
really large gray area. And businesses like Hyr are thinking
about broader policy questions like how we help freelancers
access more traditional benefits. At Hyr, we strive to bring
opportunities and individuals together, and all businesses, but
especially small businesses who would benefit from a modernized
system that more easily allows individuals who wish to work
independently to connect with organizations in need of talent.
For this reason, we have engaged with a coalition for
workforce innovation to promote Federal policies that allow the
connections to create between organizations and individuals
accessible for all platforms, industries, and positions.
The fact is the number of gig opportunities are growing at
unprecedented rates. And technology companies like ours have
made it easier for workers and businesses to find each other.
By staying flexible, collaborating with each other, and
balancing innovation with the tried and true, we can position
ourselves to adapt and thrive in this new gig economy.
Thank you.
Chairman CROW. Thank you, Ms. Mozes.
Ms. Omega Wallace, you are recognized for 5 minutes.
STATEMENT OF OLIVIA OMEGA WALLACE
Ms. OMEGA WALLACE. Chairman Crow, Ranking Member Balderson,
my name is Olivia Omega Wallace, an entrepreneur and a
marketing consultant with 20 years of experience in branding
and advertising.
I live in Aurora, Colorado. And I am the co-founder of
Wallace Marketing Group. My husband and I and three contractors
started Wallace Marketing Group specifically to help coaches
and consultants in the health, wellness, fitness and nutrition
industry, to grow their companies through branding, online
marketing, and digital communications.
Over the past two decades, I have seen the evolution of
marketing happen before our eyes on the internet. The many
barriers to entry started to diminish as technology increased
allowing individuals with no special advantages take an idea,
quickly bring it to market, hire employees, and scale with less
up front out-of-pocket costs and less risk.
Our clients include a vegan chef, and a naturopathic
doctor, husband and wife team. They want to bring healthy
living and easy cooking to their local and online global
communities. We also have a counselor that offers art therapy
to families in trauma. Online marketing tools allow them to
reach their specific target audience from Aurora to Australia.
I started my first business making and selling stuffed
animals as a teenager. And at that time, the internet, again
20-plus--20, 30 years ago, the internet and other online
resources weren't available. It is incredible to look at young
people today, such as our daughter, who has a business of her
own. She is a sophomore in high school and has published three
murder mystery novels for middle schoolers. She is pursuing her
dreams early in life. This has been made possible by online
publishing, payment, and marketing platforms that we, as
entrepreneurs and small business owners, use every single day.
She is releasing her fourth book later this year, thanks to the
many digital resources at her fingertips.
Terms like post engagement, community insights, cost per
click page views, shared pins, retweets, channel subscribers,
page boosts, and video views are household names for us.
Whether I am searching for the perfect contractor on Upwork,
teaching a workshop to 100 women entrepreneurs on how to
leverage Facebook ads to grow their business, or coaching a
client one-on-one on the importance of consistent content to
grow their YouTube channel, the ability to participate fully
and make a living as a small business or entrepreneur would be
impossible without these online business tools.
So I am here today to advocate for all of those small
businesses, solo entrepreneurs, all of those independent
artists, writers, and creators, all entrepreneurs who are using
the internet, and the free flow of data that it offers us, to
bring their vision to the world.
Privacy and security are critical to both our family and
our business. But achieving these ends must be done in a way
that preserves the magic of commerce, as well as the community
that brought us to this point.
When I hear the phrase, ``it is not personal, it is
business,'' I kind of laugh to myself. Our family is helping
our clients provide for their family whether it is through
online marketing or social media. So for us, it is always
personal.
Thank you very much.
Chairman CROW. Thank you, Ms. Omega Wallace. I appreciate
that.
We appreciate the testimony all of you have shared. And I
am going to begin by recognizing myself for 5 minutes, starting
with Ms. Omega Wallace.
You know, we heard earlier that not all small businesses
have websites. In fact, a lot of them don't even think that it
is relevant to their businesses. And I would love for you to
share with us, in your experience working with other
entrepreneurs, why--you know, A, what are the barriers to
getting those websites up and having the technological savvy,
and, B, why some don't think that it is even relevant for their
businesses?
Ms. OMEGA WALLACE. When we think about entrepreneurs, let's
take a local baker, for example. They love to bake. That is
what they know how to do. And so adding something like a
website to their day-to-day, they think about the complications
of putting it together, trying to find a web designer to help
them do that, the cost of putting a website up.
But I think the most overwhelming thing which creates a
barrier and why they might dismiss it is that upkeep. So going
day-to-day, month-to-month, and even year-to-year, they want to
bake. And, again, that is what they know how to do. So we are
adding another piece of technology in an element of marketing
that they may not understand to a long list of things that they
have to do, including accounting and sales tax, et cetera. So
it starts to become very overwhelming and, therefore,
dismissing it altogether sometimes becomes the easiest thing in
their mind.
Chairman CROW. Yeah. It makes sense.
Ms. Blossom, you mentioned that Thumbtack is different than
other digital tools, and that you are not just providing a job,
but helping people start businesses.
And I am really interested in creating pathways for new
business ownership and entrepreneurship, and I would love for
you to talk a little bit more about that.
Ms. BLOSSOM. At Thumbtack we really think that our job is
to provide small businesses the tools to kind of scale and grow
and fit what needs for them. The businesses that are using
Thumbtack are able to set their budgets and, reach out to as
many customers as they like.
But we really think that it is up to them. We are not about
limiting their opportunity. We often see people that will start
out and they are just one person. They are a dog trainer, you
know, training dogs. But then as they get more demand and they
get more customers from Thumbtack, they bring on additional
people and they expand into other services, so that they can
really grow. But they still have control over how they grow.
And one of the things that we are really proud of is that
it really allows people to expand their earning opportunity.
You know, you may start out at a lower rate that you are
charging customers to try and get more customers in the door.
But as you are getting more and more demand, you may raise your
prices, and you may be more selective about the type of
customers that you want because you have control of your own
business. And we think that that is really important.
Chairman CROW. Okay. Thank you.
Ms. Mozes, we talked earlier about the gig economy. And
from your perspective, first, how is the gig economy defined,
right? Because I think about a lot, kind of, cottage industry
and, you know, mom-and-pop stores and shops and other things. I
would love to hear your thoughts on how we define that and how
it is impacting the small business environment?
Ms. MOZES. It is a great question.
And I think the first thing is the definition of the gig
economy itself. Where we see that as it is a free market
system, which temp positions are common and companies contract
with independent workers for short-term engagements.
In terms of how it is impacting small business. I think
that is still to be defined, frankly, because you are seeing
products like ours that are coming about and helping small
businesses connect with workers when they need the most. But we
are still relatively new. And you guys probably are aware of
the other gig economy services that are out there, which are
ride sharing or delivery.
But if you are looking at delivery, in particular, for
small businesses, you are thinking about that small restaurant
that now is able to offer delivery, which is a whole other
revenue stream for them that they didn't have previously. And
it is helping them reach customers in areas that they haven't
before.
I think with Hyr, where we are breaking into that small
business is when they only have five people in their
restaurant, and their dishwasher calls off, then they have to
turn down customers, because they are not able to have people
actually be able to wash the dishes. Now with Hyr, they can
bring in that extra person for those labor costs that they
truly need.
Chairman CROW. Thank you. And it seems like we can't have a
conversation about the gig economy and how this is changing
without a discussion about the portability of benefits as well.
As people's relationship with work changes, then the
relationship with their health and retirement benefits changes
as well.
Thank you.
So I will now recognize Mr. Balderson for 5 minutes.
Mr. BALDERSON. Thank you, Mr. Chairman. And my first
question is pretty broad. This is to all three of you, if you
all would like to jump in.
I am often surprised to learn when small business owners do
not know how the Small Business Administration can help them as
they start and grow their businesses. For example, I am a
cosponsor of an important piece of legislation sponsored by
Ranking Member Chabot that would establish a program at the
Small Business Development Center to provide cybersecurity
training to entrepreneurs.
Programs offered to small businesses owners, such as these,
aren't reaching their full potential if not enough business
owners know, and know about how to use them.
Did any of you use any of these resources at the SBA, or
maybe at the SBDC, or did you advise any of your customers, as
I would say, to reach out and to search out these agencies and
what they had to offer? And anybody can answer.
Ms. OMEGA WALLACE. Yes, I have used some resources in the
past, and I have advised some of my clients to do so as well.
You asked the question of why aren't they being used or
utilized to their fullest. And I would say there is an
overwhelming long list of items to check off for a business
owner to start a business, from registering their business
name, trade name, registering their URL, et cetera. And I truly
just believe that small business owners, solopreneurs starting
out are overwhelmed. And on the long list of things to do, they
look at what do they absolutely have to do this minute on this
day to get started, and things like cybersecurity training can
fall by the wayside, unfortunately.
Mr. BALDERSON. Ms. Blossom?
Ms. BLOSSOM. Sure. I think one of the things that we
struggle with is there is often a misperception among the small
businesses using our platform, the SBA--their only purpose is
to provide loans, and a lot of the businesses on Thumbtack are
not capital intensive, because they are service businesses. If
you are a personal trainer, you might need a set of weights and
a park to get started. And, you know, you might think that SBA
loan is not applicable for you. And so we are trying to educate
the professionals using our site about all of the other
services that SBA provides in terms of consulting, in terms of
helping folks write a business plan beyond just the financial
aspects, to let them know the full reach of the agency.
Mr. BALDERSON. Okay. Thank you.
Ms. MOZES. I think I would echo the same sentiment about
just small businesses owners when they are first getting out. I
know when we first started, it was so overwhelming for us to do
everything from creating the app itself, creating the
technology, doing the website. Thinking about actually just
applying for a loan would just be very overwhelming for us. In
terms of the workers on the Hyr platform, the majority of the
workers on our platform are already working full-time or part-
time within the industry, so they are only using Hyr as
supplemental income. So that sort of benefit would not apply to
them, just because they are only picking up a few shifts a
month.
Mr. BALDERSON. Okay. Thank you all.
My next question is for Mrs. Wallace. I met with President
Jake Ward and other members of the 3C team yesterday, and who
are also joining us here this morning. And one thing that we
discussed was the need for data privacy legislation.
In your opinion, what would the successful data privacy
legislation entail?
Ms. OMEGA WALLACE. In my opinion, it would entail one
overarching law or bill that small businesses can follow versus
having to understand and comply to something State by State,
where most all digital and online businesses cross State lines
and have clients all over the country. So that is what I would
recommend.
Mr. BALDERSON. And that is a great recommendation. Thank
you.
Did anybody else want to add to that?
Ms. BLOSSOM. I would just second what----
Mr. BALDERSON. Yes. I know. She nailed it, so----
Mr. Chairman, I yield back my remaining time.
Chairman CROW. Thank you. The gentleman yields back.
I will now recognize the gentlelady from Pennsylvania for 5
minutes.
Ms. HOULAHAN. Thank you, Mr. Chairman. And thank you for
allowing me to ask my questions a little bit out of order. My
questions first are for Ms. Blossom, and also Ms. Mozes.
You each spoke about--something about portable benefits in
your particular case and about points--a point system in your
case for what amounts to portable benefits and healthcare.
Can you give me a little bit more detail about how that is
executed in each of your organizations, and also, how we as a
Congress might be able to leverage that kind of idea to help
people in a gig economy with portable benefits and such?
Ms. BLOSSOM. Thanks. We are so happy to talk about this
topic.
Earlier this year, we partnered with the National Domestic
Workers Alliance who have created an online platform called
Alia, designed primarily for house cleaners. And the way that
the platform works is cleaners can set up an account, and their
customers can make contributions into their account that they
can then use to--use the credits for a number of products,
including paid time off, life insurance, disability insurance,
and critical accident insurance. It is a small step, and we
know that it is not solving the full complement of benefits
challenges that workers face, but we think it is an important
step to take to try and move the conversation forward and see
what we can do.
As for what Congress can do, you know, there has been a
bill from Congresswoman DelBene on portable benefits to set up
a pilot fund that would help set up pilot projects in States
and fund them. We think that that is a fantastic idea. We don't
claim to have all of the answers or solutions on how to do this
yet, but we are openly looking for partners that are interested
in solving this problem with us.
Ms. HOULAHAN. Thank you.
And Ms. Mozes.
Ms. MOZES. It is a great question, and thank you for asking
it.
I think when we first looked at creating Hyr, one of the
big things we wanted to do was, because we have gig economy
workers, was to create a system that we would be able to
provide these benefits to them.
Today, the way that the benefits look is they are called
UPoints. And within the UPoints, we collect money from the
business, and we take a percentage of those earnings and we
give them back to the workers in terms of a points-based
system. What they are able to redeem those benefits for today
is what we call a UDay. It is essentially a $75 credit which
gives them a paid vacation day. By the end of this quarter, we
are also going to be partnering with an insurance company which
would allow them to put those benefits towards insurance, so
accident insurance.
We would love to be able to explore options to also be able
to provide, like, that traditional healthcare benefit piece.
Again, it is looking for clarity among legislators as well to
figure out how we are able to do that within a gig economy
work. But we do believe that the points-base system that we
have created will allow workers to actually take part of their
earnings, like on addition, because we are giving them these
points in addition to what they are earning for their hourly
wage, and then decide where to allocate those to what matters
most to them, whether it is insurance, a paid day off, health
insurance, or other benefits that hopefully, as we grow, we
will be able to add to the platform.
Ms. HOULAHAN. So at this point in time, neither of you all
have figured out how to crack the nut of healthcare insurance.
Is that a fair statement?
Ms. BLOSSOM. That is fair. We know that a lot of the
professionals on Thumbtack are using the ACA exchanges to get
their health insurance. About a quarter of the professionals
that started on Thumbtack said that accessing benefits was the
biggest challenge in making that leap to entrepreneurship. And
about 14 percent of them directly attribute the ACA to them
being able to start their own business. It has been a great
step. But we know as premiums are increasing and it becomes a
little bit harder to access that, that there is more work that
we need to do there.
Ms. HOULAHAN. So I actually did read in your testimony
about the 14 percent attributing, you know--I guess assessing
that as being a positive thing. It actually begs the question
how many didn't think it was a positive thing. Was there a
larger portion that didn't like the Affordable Care Act? Or did
you ask that question?
Ms. BLOSSOM. We didn't ask that question specifically. But
because small businesses and professionals come from a variety
of backgrounds, a number of them are getting health insurance
through a spouse. Some of them are under 26 and still on their
parents' plan. So they are getting insurance from a variety of
ways.
But for those that didn't have access to insurance, or that
were relying on insurance from a previous kind of traditional
9-to-5 job, being able to know that they were going to be able
to purchase insurance on the individual market was a huge
relief for them in kind of getting over that barrier.
Ms. HOULAHAN. Thank you.
And with the last 40 seconds of my time. Ms. Mozes, if you
could kind of speak to us a little bit about freelancers union
and how you work with them and whether or not there is anything
that the government can learn from that as well?
Ms. MOZES. We don't currently work with the freelancers
union. That being said, we would love to work with them more
closely. They are doing some really great things for
freelancers in America, including looking at exact policy
questions that you have asked today about healthcare, and how
they will be able to provide that to this huge growing segment
of workers that have decided to work this way.
Ms. HOULAHAN. Thank you. And I appreciate the time.
I yield back.
Chairman CROW. Thank you. The gentlelady yields back.
The gentleman from Tennessee is now recognized for 5
minutes.
He stepped out. Okay.
The gentlelady from Iowa is now recognized for 5 minutes.
Ms. FINKENAUER. Thank you, Mr. Chair.
I was really excited about the Subcommittee hearing today.
I know, obviously, the gig economy is becoming, you know, a
bigger part of--well, for millennials like myself and young
folks across the country, you know, a new pathway where we can,
you know, get creative about our future and--but it makes it
difficult sometimes, given the policies that are out there and
folks thinking about retirement and healthcare and childcare
and paid family leave and all the things that go into it. So
thank you so much for being here and chatting about those
topics.
But I got really excited, Ms. Wallace, when you started
talking about marketing. And it took me back to a conversation
I recently had with some folks back in Iowa when I was doing a
small business tour, visited a company in Maquoketa, is one of
our smaller towns that is working really hard in their Main
Streets and, you know, trying to keep folks in Maquoketa and
bring them back home. And the company that I talked to, you
know, they had been around for decades and have done a great
job. They do commercial washers. But then, they also work with
other, you know, entrepreneurs that come to them and have
ideas.
You know, one of the things I heard about was a gentleman
from Cascade, which is an even smaller town than Maquoketa in
Iowa, who had an idea for shredding--a shredding machinery when
it comes to tearing down houses. And just being creative about
how they do that more effectively, and it is a wonderful idea.
Excited that this company was willing to help him create that
product and asked them, you know, how is that going? Has he
been able to grow?
And one of the things we heard that the biggest issue was
the marketing side of it, and how he was going to have access
to that. Because, again, you guys are exactly right, Ms. Mozes
and Ms. Wallace and Ms. Blossom. When you are working hard on
your business, the last thing you are thinking about when, you
know, you are filling out all the paperwork all that, is then
how do you take that next step.
Is there anything that you guys could see the Small
Business Development Centers, or the SBA, start getting more
involved in to encourage folks to have access to marketing and
take it to the next step? And is there--what should we be
looking out for here? And is there any--are there any programs
that we are missing, or things that you think we should be
doing that we are not doing, especially when it comes to
connecting marketing to the folks who need it?
Ms. OMEGA WALLACE. I don't know that there is anything
specific that is missing. But I do know that marketing is the
very last thing that businesses think about when they are
building. They think about creating the app and building the
technology and creating the products, et cetera. They open the
doors, whether virtually or physically, and wait. And the whole
notion of, you know, build it and they will come is definitely
not what happens when you start a business.
So when they open their business and they wait for
customers and then they think, oh, yeah, I should probably do
that thing called marketing.
So I think the message needs to be, right when they start,
don't forget about this major piece. Don't start this major
piece, you know, at the end, but think about your marketing as
part of your entire business development now.
Ms. FINKENAUER. And I know, Mr. Balderson, you touched on
this quite a bit too, just how do we better educate folks about
the programs that are out there.
I know you guys are doing your best, again, being on the
ground every day with our entrepreneurs and folks who are, you
know, taking that next step and that risk. But what more can we
be doing as a Congress to make sure that we are educating
folks?
Ms. Mozes or Ms. Blossom.
Ms. MOZES. I mean, I think one thing that you could do is
work with kind of more, like, community organizations that are
better at talking to businesses. So, for example, I know for us
with Tech New York City, that was a resource that we definitely
reached out to. And they are very good at disseminating
information to technology companies.
But I am sure that it is really about knowledge, right? And
I think that a lot of small business owners as they are
building businesses, like when I first started Hyr, it was kind
of blinders on me building the business, not looking out and
figuring out what else is out there to help me. And I think
marketing--you are completely right. It is the hardest thing
for a small business owner to wrap their head around, because
you go online and you start reading about all these things you
could doing with ad words or, you know, Facebook ads, or
whatever it might be, and it is overwhelming. So you just don't
do anything instead of doing something.
Ms. FINKENAUER. Yeah. Well, thank you.
I yield back.
Chairman CROW. Thank you. The gentlelady yields back.
The gentleman from Pennsylvania is now recognized for 5
minutes.
Mr. JOYCE. Thank you, Mr. Chairman. This question is for
Ms. Blossom.
Small businesses are always at the forefront of what is
next, because they have to stay ahead of the larger
counterparts.
What new technology is out there that will make your small
business and many small businesses even more accessible to
growth?
Ms. BLOSSOM. I think that that is a great question, and I
think it is both about utilizing new technology but also using
a lot of the existing technology that is out there and making
small businesses see how it can work for them. For example, we
were in Colorado, and we met two great guys who started a deck
building business. And on a whim, they started making YouTube
videos of themselves building decks and now they have tons of
followers. They have gotten lots of customers, because people
are weirdly very interested in watching people watch decks. But
they have used social media in a nontraditional way to help
build their business.
So I think we can encourage companies that might not think
that either social media, or online presence--it could be
important for them in business to really kind of expand their
reach. And to what my fellow panelists said, use that as a
marketing tool to let more customers know about their
businesses.
Mr. JOYCE. Specifically, as someone who has built decks
with my own hands, I have never watched a YouTube video.
Perhaps the deck would have been more stable if I had.
But you bring a great point, and I am going to ask each one
of you to address that, if you would for me, please.
I come from South Central Pennsylvania, an incredibly rural
area where there are over 5,000 farms, and these are all small
businesses.
Please touch on the importance of accessibility to rural
broadband in your particular concerns, and in the concerns
regarding small businesses throughout your areas?
Ms. BLOSSOM. Sure.
We think broadband is incredibly important, because we know
that the internet is often the first place that people are
turning now when they are looking for businesses. We met a
person this week who had a lawn care business, and he was
connected through Thumbtack to his neighbor who lived across
the street who didn't know that he had a lawn care business.
But because of the internet and because they were able to
connect online, they got new customers and helped build their
business.
So, rural broadband is incredibly important, because we
know that that is where everybody is going to turn to make sure
that those people are able to access the internet and have an
online presence, so they are not missing out on potential
clients.
Ms. MOZES. I would echo that sentiment in terms of just
that importance of connecting people. We hear from businesses
all the time that are outside of large cities about how they
would love to be able to access Hyr. One of the big reasons why
we would never--well, not never, but why we can't go to some of
these smaller communities is that we are an app-based business.
So if people don't have access to broadband, they don't have
access to potentially even downloading an app, or being able to
connect them.
But sometimes it is those small businesses in rural
communities that need a service like Hyr more than a business
that is in, you know, downtown Manhattan, because they do need
to access people. So I think that making sure that people have
access to broadband is of utmost importance across the country.
Ms. OMEGA WALLACE. And I would just add to what they have
said as far as marketing connection, but also education. And I
think--I know for myself and for a lot of entrepreneurs, the
education and training they are receiving, they are finding
online. And so when you don't have access to even high-speed
internet or broadband to stream videos to learn techniques and
other elements of running your business, then that is a
hindrance as well.
Ms. BLOSSOM. If I could just add on to what she said.
Mr. JOYCE. Absolutely.
Ms. BLOSSOM. We also have been surveying the professionals
in the states. Asking them when you need information about your
business, where do you turn? Do you turn to the SBA? Do you
turn to your local chamber? And increasingly, people are
turning to the internet, to Facebook groups, to YouTube videos
to get information from fellows in their industry, and then
just other business owners about how to solve challenges that
we have talked about throughout this panel.
Mr. JOYCE. I might just indulge just a few more seconds.
If I asked a yes and no question for each one of you, if
there was more access to internet through rural broadband
expansion and accessibility, would that make your businesses
stronger and grow more? It is a yes-no.
Ms. BLOSSOM. Yes.
Ms. MOZES. Yes.
Ms. OMEGA WALLACE. Yes.
Mr. JOYCE. Thank you all for being here today.
I yield back.
Chairman CROW. Thank you. The gentleman yields back.
And I will say with confidence, nobody would want to watch
me build a deck on YouTube. I can assure you of that.
The gentlelady from Kansas is now recognized for 5 minutes.
Ms. DAVIDS. Thank you so much. I didn't realize there was
so much deck building experience here. I have built a couple of
decks myself.
Mr. JOYCE. We will have to talk afterwards.
Ms. DAVIDS. Yeah. We will collaborate on that.
So, first of all, thank you, Chairman Crow, for leading
this important discussion today.
The digital ecosystem has definitely opened up new
opportunities for entrepreneurs and small businesses, you know,
from founding a startup to existing businesses growing and
helping existing businesses. And I think the biggest piece that
we are seeing here is that so many people across the country
are having access to opportunities to start their own
businesses. And, in fact, Susan Cooley, who is--I represent the
district that she has started a business in was, you know,
someone who, like a lot of folks, saw a need. You know, she is
looking for a reasonably priced comforter, right, and then
discovers that there is a demand for a specific kind of product
and decided to, you know, start an eBay store. And I think a
lot of people have gone down this path, and now has grown that
from, you know, offering clothing and accessory and household
goods at Sincerely Susan, to now having a brick-and-mortar
store and having 15 employees. And I think that those are the
kinds of stories that we need to make sure that we keep in mind
as we think about how do we help other folks who are looking to
solve a problem, have that entrepreneurial mind-set.
And one of the things that I kind of wanted to follow up on
is this concept of broadband and access to broadband. Thank you
for answering the question, because now I get to ask follow-ups
to just like pull out a little bit more information.
I was wondering if, when you think about broadband as
someone--as folks who actually are, like, helping benefit other
small business owners, do you find that you are kind of, like,
waving your arms and saying broadband is important? Or do you
feel like there are a lot of people who are also recognizing
that, you know, Oh, I would definitely start a business if I
had access. Or is this an instance where we need to be getting
out there and explaining to people that small businesses would
grow if there were more broadband access. Does this make sense?
Ms. Wallace, I would----
Ms. OMEGA WALLACE. I think so. My first, you know, instinct
on that and thought is that people are aware that it is
important. And I have heard too, we have a lot of, kind of,
rural areas in Colorado that, you know, if the--I had broadband
or if I had, you know, reliable internet, then I would be able
to do these things.
So I don't know that we have to wave our hands. I would
think that people know that it is needed.
Ms. DAVIDS. Yeah. So one of the reasons I ask is because a
lot of times I think what ends up happening is that, especially
legislators and lawmakers make a lot of assumptions about what
people already know. And as the Small Business Committee, I
think--and, you know, we are focused on innovation and
workforce development is, how do we make sure that folks have
access to information if rural broadband is a huge issue and,
you know, the Congress now knows about it, it tells me that
there is probably a lot of people on the ground who are in the
weeds doing the work that have been trying to sound the alarm
for a long time.
One of the things I am wondering about is whether or not
any of you have made use of the SBA programs, whether it was
Small Business Development Centers, loan programs. And then as
the follow-up, have your--whether they are customers or folks
that your helping connect, are they making use of them? Because
I often hear that people realize that there was this available.
We will start with Ms. Blossom.
Ms. BLOSSOM. Sure. We know that--we have hundreds of
thousands of professionals. We know that many of them are using
SBA, but we also know that it is probably underutilized. And so
we are open to all ideas on ways that we can better educate
people about the different resources that are available,
because, you know, as we have spoken, time is the biggest
resource for small businesses owners, and they are often so
frenzied that they don't know that the SBA would be a resource
for them to look to. So, you know, anything we can do on the
education front to just let them know about the array of
services, I think would be really helpful.
Ms. DAVIDS. And so, to tie those two things together, the
reason I ask that is because, when access to--access to
information is so reliant on broadband access or internet
access, you know, the Small Business Development Centers can be
a place where people might be able to make use of that. So that
is why I was curious. How much are you seeing use of that in
your work?
And I don't know if Ms. Wallace or Ms. Mozes had anything
additional----
Chairman CROW. The gentlelady's time has expired. But we
will----
Ms. DAVIDS. Okay. No. Thank you.
Chairman CROW. We will have a second round of questioning,
so you can hold that--hold that question and thought.
I will recognize the gentleman from New Jersey. Thank you
for joining us. If you have some questions.
Mr. KIM. Thank you, Mr. Chairman. Yeah. Absolutely.
Well, look, thank you, Chairman, Ranking Member, for
holding this hearing. I really appreciate it. And I actually
might be following up on some of that.
But I have been deeply interested in the innovative ways
the small businesses can use digital services to grow and adapt
to an ever-changing tech landscape. It is something that I hear
a lot about from folks in my own district as they are trying to
figure this out. And once we are talking about things that we
can be doing on infrastructure and other things, making sure
that we are looking out for broadband. I don't know how that is
going to impact, so----
You know, Ms. Wallace, I just want to start with you. You
know, you shared ways that small businesses can use digital
tools to help them reach more customers. Can you explain how
the evolution of digital marketing has benefited small
businesses in particular?
Ms. OMEGA WALLACE. Sure.
When I started doing marketing, I worked with really big
clients that had millions of dollars to do traditional media,
to buy TV ads and newspaper ads.
Today, relying on simply traditional media would be
impossible for small businesses. So now allowing myself and
clients to be able to buy Facebook ads for, you know, $100, or
do a YouTube video, or do even YouTube ads or boost post on
Pinterest, allow them to reach a broad yet targeted audience
for a fraction of the cost. So that has changed tremendously
over the last 10 years, and even over the last couple of years.
Mr. KIM. You mentioned, you know, Facebook and YouTube as
some of these different platforms.
What are some of the other platforms that you have seen
been successful, either in your own work, at your family's
businesses? I would just be--you know, just get a better sense
of that. And how critical is it, you know, to having that
social media presence for small businesses now?
Ms. OMEGA WALLACE. You know, I could go on and on about
LinkedIn as well as--I mentioned Pinterest already. Constant
contact in Mailchimp as far as email marketing and tying that
back to social media. The list goes on. And I would say it is
100 percent critical to the success of businesses and the
growth of businesses to have an online presence, and
specifically, have a social media presence.
Mr. KIM. Ms. Blossom, over to you.
You know, we are at this point now where, you know, you
have billions of users, you know, accessing these digital
platforms on their phones and on their computers. You know, as
these digital platforms gain users, what can small businesses
do to try to stand out amongst the crowd? You know, how is it
that they can kind of penetrate through and make their mark?
Ms. BLOSSOM. Absolutely.
So, I think as people turn more and more to the internet,
they expect more and more information. And one of the most
important things that we can do as a platform is give small
businesses the tools to put as much relevant information online
and in a searchable format as we can, so they can upload photos
of your work.
If you are wedding photographer, you are going to want to
put lots of examples on your profile. And you may not have the
money to create your own multimedia website. You know, if you
are a personal trainer, you might put videos of how you have
worked with other clients on there, so people looking at your
business might find--see if you are a good fit.
And so it is incredibly important. And I think one of great
things about digital tools is it lets people know that there
are other options than traditional big businesses. If you had a
plumbing emergency, and you thought to yourself, I don't know
where to get a plumber, you might think, I will just call Roto-
Rooter, because I have heard of them or seen the commercial.
But if you went online and searched plumbers near me, you would
find Thumbtack, and then you might get 10 to 15 options of
small businesses that could do the job, perhaps quicker and
more efficiently.
And so opening people's ideas up to other small business
options that they might not have thought of is one of the best
things about the internet.
Mr. KIM. Yeah. You know, certainly talking to some
businesses in my district as I went around earlier this week, I
mean, I think that is something that they were trying to figure
out is, you know, how do they--how do they get that word out?
How do they just, you know, get that connection with folks?
And the ones that have been successful have been ones that
have been able to kind of build a community around them. You
know, be able to use these platforms to be able to really
accentuating and create the, not only loyalty in terms of
customers, but what I found really exciting was just really
seeing the camaraderie and the connectedness between small
businesses owners themselves, you know, using these platforms
to be able to highlight each other and really trying to, you
know, create that kind of atmosphere.
So I am certainly, you know, still trying to learn some of
these best practices. And I appreciate all of you coming out
and sharing some of those with us.
I will yield back.
Chairman CROW. Thank you. The gentleman yields back.
At this time, I would like to just start a brief second
round of questioning. I think there is a few follow-ups that we
all have that we would like to dive into a little bit more.
So I will start by recognizing myself for 5 minutes.
And I wanted to pick up on something that the Ranking
Member, Mr. Balderson, alluded to earlier. And it is a concern
that I share. He brought up the issue of digital privacy
regulations. And this is part of a broader issue, that we have
this tendency to treat all businesses the same, with respect to
regulations and rules. And yet, we know that a small- and
medium-size businesses have a much harder time bearing the
costs and the burdens of compliance than a Fortune 500 company
does.
So specifically with regard to data privacy, whether you
all have any experiences with compliance and the cost of those,
and how that might have impeded your growth. And then more
generally, if you had experiences with regulations that could
be more appropriately scaled to your businesses and kind of
where you are in your growth cycle.
Ms. BLOSSOM. I think you very accurately summarized that.
With data privacy regulation, we obviously support the goals.
And for our businesses to succeed, people have to feel
comfortable using the internet, and feel comfortable that
companies like ours and other actors are going to take good
care of their information.
But the big companies, they are going to be able do to it.
They are going to be able to hire enough compliance experts and
lawyers, and they have the means to do so. For midsize
companies like Thumbtack, and even the small businesses that we
serve, some of these data privacy regulations, while very well-
intended and have good goals, are to going to be incredibly
cumbersome. And particularly, as we mentioned before, like if
there are 50 different sets of data privacy regulations, it
will essentially prevent small and medium businesses from
operating across State lines, because they just won't be able
to spend enough resources on compliance information as they
need to.
Ms. MOZES. I would echo those sentiments in terms of just
us ourselves as Hyr, as a company, we are still growing. We are
very diligent in terms of the data that we collect, because as
you can imagine, we are collecting data on people's--where they
are working their shifts, even geolocations of where workers
are going. And we are very, you know, again, diligent about
keeping that information and making sure that it is very
intact.
But as more regulations are put on us, it could impede our
growth in terms of what we would potentially have to report,
how we would do that, you know, having to hire new technology
people just to comply with those regulations. So I think most
companies want to ensure that we are compliant with people's
privacy information, but just considering that when regulations
are being built at the Federal level would be a great thing.
Ms. OMEGA WALLACE. And just quickly to add to that, at one
point in time years ago, as--you know, building websites and
having people have an e-commerce website, they had to process
credit cards through their own processor in the back end, and
now we are able to heavily rely on third parties to do that
processing for us.
So I will use my daughter as an example. She is selling
books at a school fair, and she is using Square. We rely on
Square to have the capability to keep data safe. And we also
rely on Square to have the lawyers and the ability to fight
that when needed knowing that we wouldn't be able to if it was
placed on the shoulders of the small businesses owner
themselves.
Chairman CROW. Thank you, all of you. And, Ms. Omega
Wallace, I have this feeling that I will someday be working for
your daughter, so--very impressive young woman.
I will now yield to Mr. Balderson, the gentleman from Ohio.
Mr. BALDERSON. Thank you, Mr. Chairman.
Ms. Wallace--and I was appreciative of the Chairman. That
was a great question. So I am old school. I am in my late 50s.
I am that end of that baby boomer line. And for me, to buy
online is a challenge. For me, I like to still touch that
piece, that shirt I want to buy or that piece of equipment I
want to buy. You have been doing this for a long time,
obviously. As Chairman Crow said, your daughter now--I will
probably be dealing with her, or my son will. And my son gets
on me about not being able to buy online yet, and he is 32, and
that is the only way he does business.
Tell me the difference, when you encourage folks to get
into this online business compared to the bricks-and-mortar
stores that we are seeing decreasing more and more, I can no
longer buy a dress shirt in my hometown, because the last dress
shop just closed. I say dress shop. Men's shop, that--you know,
and it is a struggle. So tell me the advantages to why this is
all happening. I know the low cost. But give me some other
ideas that you encourage some of your clients to go online for.
Ms. OMEGA WALLACE. When you go online, you expand your
territory by leaps and bounds. So I actually work with quite a
few brick-and-mortar businesses in Denver, Colorado, who are
limited to that corridor or that neighborhood in their brick
and mortar. Going online opens up a whole new world, literally,
to them to be able to scale and to be able to, overall,
increase revenue.
Also, as a consultant or as a service provider, if I am
doing consulting one-on-one, I max out my time after I meet
with five people in a day. Whereas, if I can go online and
expand that to a group setting or have, you know, a Facebook
group and do live chats with groups of people, I can grow and
expand my business and move out of that one-to-one service.
Mr. BALDERSON. All right. You almost sold me, but not
quite. But thank you.
Mr. Chairman, I yield back my remaining time.
Thank you all very much.
Chairman CROW. Thank you, Mr. Balderson. I can't help the
fact that you are old school, though.
Thank you.
The gentleman yields back.
I will now recognize the gentlelady from Kansas for 5
minutes.
Ms. DAVIDS. Thank you, Chairman.
So I know the issue around privacy, again, I am just, like,
this is awesome. I love the--I can just do follow-ups. What are
some specific measures or--I don't know if there is already
policy or legislative ideas that are being put out there that
you could share with us about how we take into account
compliance for the much smaller businesses, and how we make
sure that we are not impeding people from being able to do the
kind of business that we definitely need, because, you know, if
you are--when you were talking about depending on Square to
really adhere to privacy concerns, you know, I think that there
is some, probably, like, lines of liability that we could be
talking about. But are there some specific pieces of policy
that you think that we need to know about here?
Ms. BLOSSOM. What we have seen in some of the State bills
and some of the frameworks that we have seen coming out of
Congress is different thresholds for compliance on the privacy.
Either a revenue threshold or an employee number threshold that
would really help the smallest businesses, depending upon where
that threshold is set and let them think about privacy as they
are getting bigger. And hopefully, as they grow, they will then
be part of that compliance scheme. But giving some help to the
really small ones who might not hit those thresholds yet.
Ms. MOZES. Yeah. I think that thresholds on employee
numbers as well as potentially even, like, revenue numbers. For
us, much like you use Square, we use Stripe. Stripe is actually
used by most big tech platforms now, so that we are not
collecting any financial information from any of the workers on
our platform. Everything is actually dealt through them. And
that is a huge help for us as a business, because we don't have
to deal again with any of those--that financial information.
I think it more comes down to when you are collecting
people's addresses, their telephone numbers, even when we are
thinking about the geolocation of the workers that we are
carrying from, that kind of stuff could get potentially
cumbersome if we are looking at different types of legislation
that could be coming up.
Ms. OMEGA WALLACE. And I would just agree with what they
both said.
Ms. DAVIDS. Thank you.
I yield back.
Chairman CROW. Thank you.
The gentlelady yields back.
I will now recognize the gentleman from Pennsylvania for 5
minutes.
Mr. JOYCE. Thank you, Mr. Chairman. And I do want to thank
Chairman Crow, and I want to thank Ranking Member Balderson for
bringing you in front of us here today.
I think that I learned something from what you presented to
us. Small business is a bipartisan advocate for you. And I have
often said that we are bridge builders. But today, I have
changed that. We are deck builders. With Representative Davids,
that we understand the importance of working together. We are
your service providers. That is your take home message from me
today. We work here with both sides of the aisles,
unencumbered, to advocate for the small businesses in the
United States.
Now, I would like to finish with a pop quiz. But I will
tell you there is no wrong answer. But it is a question for
each one of you, and it is important for me to take home. Now,
as someone who didn't finish their formal education until I was
in my early 30s, I am used to pop quizzes. And you might not
have thought this was going to happen to you today, but I would
like to allow you to indulge me, please.
Regarding the growth of your individual companies, if you
had to choose between one of the three following, which would
you choose? Again, I will preface by saying there is no wrong
answer. Would you ask for more capital for that growth? Would
you ask for better broadband access for your companies for that
growth? Or would you ask for better access to trade
associations?
So better broadband, more capital, or better access to
trade associations. What works best for you?
I will start with you, please, Ms. Blossom.
Ms. BLOSSOM. It is a very interesting question. I think for
us, we are lucky to have the capital that we need to grow. And
so broadband would actually be interesting, because we don't
know how many potential Thumbtack service providers and
customers are out there that aren't using our platform or
aren't aware of the opportunities, because they don't have
access. So for us, that is really an unknown and a very
interesting question that we would love to explore.
Mr. JOYCE. So, Ms. Mozes, it is your chance to tell us why
these are important to you and which is the most important?
Ms. MOZES. I think it is a great question for us at our
stage in our business capital. We are at this point in our
business turning down business because we don't have enough
capital in order to hire enough people to service all of the
small businesses that want to use us to access labor. But we
are in a unique position because we are a growing tech company.
And so if you usually ask any growing tech, capital would be
number one. But I think all three are important for businesses
to grow in America.
Mr. JOYCE. Thank you. Ms. Wallace.
Ms. OMEGA WALLACE. We are in an interesting situation, but
also a situation that a lot of business owners face is that my
husband's income and my income is the same income from our
business that we bring in. So I would have to say capital,
because right at this moment, we are at a place where we are
juggling three contractors and bringing in the right amount of
business to be able to pay them, pay ourselves, pay our
mortgage. And so, it is a very tricky balance of cash flow. So
capital would be helpful so that we can scale, grow more, bring
on more people and help provide marketing to more small
businesses.
Mr. JOYCE. Thank you all, and thank you for being here
today.
Chairman Crow, I yield my time.
Chairman CROW. Thank you. The gentleman yields back.
I will say, John, this deck joke is going to be good for a
long time, I can tell.
I would like to thank all of the witnesses for sharing
their time with us today. Digital platforms provide
transformative resources for entrepreneurs to build and grow
businesses. That is very clear from our discussion today.
The collaboration fostered through digital ecosystems has
improved both the cost and efficiency of digital marketing and
employment. These costs and time savings are particularly
helpful for small businesses that are burdened with tight
budgets and limited resource. But small businesses cannot
unlock these opportunities if they fail to adopt digital tools.
That is why the members of this committee must raise the
awareness of the value of digital platforms and encourage small
businesses to become active participants in the ecosystem, but
also identify ways to lower the hurdles as well and not have us
stand in the way of your entrepreneurship and your growth.
I would ask unanimous consent that members have 5
legislative days to submit statements and supporting materials
for the record. And without objection, it is so ordered.
If there is no further business to come before the
Committee, we are adjourned. Thank you very much.
[Whereupon, at 11:13 a.m., the Committee was adjourned.]
A P P E N D I X
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