Speaking of inherent biases in frameworks, mine is the focus on the health of the SMB segment. Especially the focus on the “small” in small and medium businesses. My experience in building a viable business around this segment helped me appreciate the SMB owner. It deepened my respect for the challenge of creating solutions that pass the muster of their judgment. For an SMB owner, the solution either works or doesn’t—there’s no room for golf retreats, steak dinners, or care packages to buy time. Like a Roman emperor at a gladiator fight, their judgment is swift, clear, and absolute.
The big unknown I had for this round of earnings from my cohort was whether the SMB was doing well. Essentially, how well “main street” was doing. Reading between the lines of the reports from Klaviyo and the not-so-subtle hints from Braze, it looks like while the small business growth has all but disappeared from the messaging landscape, the mid-market seems to be alive and thriving. Two data points that support this assessment:
- Klaviyo refused to provide guidance for 2025, citing uncertainty in the SMB segment.
- Braze has scaled back its SMB sales efforts and noted a lack of meaningful conversions from free trials from its self-sign-up funnel.
While the recent Black Friday / Cyber Monday (BFCM) messaging traffic may have been strong, we don’t know if it was small, medium, or enterprise that drove growth. The SMB might still be holding on, but it seems the mid-market is the expanding subsegment making up for the absence of smaller players. Whether this is due to economic softness or a failure to create products that resonate with businesses like Joe’s Pizza, one thing is clear: Small businesses are not leveraging text messaging as much as they once did—or should—and this trend doesn’t seem likely to change.