Does shelling out for tech pay off for small businesses?

In primary school I had a brilliant idea, a twist on the common-or-garden lemonade stand. All around me people absorbed, rather than ate, their soggy sandwiches. They were miserable sangers, not unlike the ones I made for my kids this morning. My idea was this: I would sell filled rolls.

The mother let me do it. The sister even gave me her secret salad-filling recipe. The baguette was pre-Cuisine de France and if I cut them carefully I’d get three rolls to a baguette, thus maintaining a respectable profit margin. Our (the sister soon became a silent partner) trade secret, keeping the bread crusty, was to ensure the tangy filling was carefully trapped between two leaves of perfectly dried lettuce. I handed out samples from a biscuit tin. Sales were slow. Maeve, I’ll always remember you, my first and only customer, for signing up.

After such failure came a fallow period, and it was not until I went back to my secondary school to talk about running a business that I thought in detail about the nature of the entrepreneurial beast.

In the olden days you could open a business because you passionately believed in sandwiches/ books/ dog grooming / being your own boss. You could sell apple tart and have your independence. You could be feeding dirty tea towels into the washing machine (how do they get so smelly, so quickly?) and be thinking how you really should get one of those websites, to let people know you’re there.

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Facebook. What was not to love? It was a completely free way to engage with your customers, to tell them your story.

The economist Mariana Mazzucato argues that tech platforms are engaged, like feudal landlords, in rent extraction rather than real value creation

Then there’s the tech you can pay for by direct debit (as opposed to your soul), an online diary for table bookings, essential for any serious eatery, is yours for only €110-€180 a month. Sell your gift vouchers online, another great idea, 4 per cent. You can’t afford your own delivery driver, unless you turnover at least 30 orders a night. So here comes the consumer choice-enhancing democratisation of delivery for only 25 per cent. You don’t need delivery, but you want your customers to be able to order online? Never fear, it’s a mere 6 per cent.

Tap and tip

Finally, none of us carries cash anymore and so there’s an app to tap and tip. Which is so clever, a genuinely useful way to support the team. I noticed last weekend that the tap-and-tip option at our local horsebox had changed from €1 to €2. Now that’s inflation.

The ingenuity of tech enterprises in the digital economy is enough to give anyone an inferiority complex.

But the economist Mariana Mazzucato, author of The Value of Everything: Makers and Takers in the Global Economy, argues that tech platforms are engaged, like feudal landlords, in rent extraction rather than real value creation.

Is this comparison too harsh on the innovators? It certainly makes me feel a less humdrum, more useful engine. But the techies keep coming up with great solutions. Some offer genuine cost-saving integrations, the type of cost saving you need in an (im)perfect market economy. It’s just that, as labour-saving devices go, for small businesses they are draining.

And it’s not just small businesses or hospitality; it’s the same for most businesses, including professionals who used to spend Saturdays at the golf or the rugby engaging in “business development” and then spent the pandemic creating webinars.

Small businesses have begun batting at the low-hanging fruit of environmental husbandry: down with ketchup sachets, up with edible cups

So much delicious information, all for free, apart from the (babysitter) cost-slashing €17.21 monthly subscription. Let’s not forget Free Now to get you to the game, now it’s back on. Your taxi driver gets a career with so much flexibility for just 15 per cent of his fare.

Sommelier software

I met an entrepreneur last week who had recently graduated from TCD. Having worked in a well-known city centre restaurant all through college, and in true entrepreneurial spirit, he invented sommelier software that restaurants could use to help their customers choose a wine.

He soon realised most independent restaurants don’t have a budget for tech. Brave and wise beyond his years, he – Nathan Misischi – and his business partner have now developed a smart reverse vending machine (to take empties) under the brand Sensi. This guy will go far in the circular economy.

And what of digital solutions for the circular economy? Just like the Single-Use Plastics Directive, small businesses have begun batting at the low-hanging fruit of environmental husbandry: down with ketchup sachets, up with edible cups. But this is about changing the way we consume, not simply reinforcing our desire to do so. How will technology help?

For example, there are food-sharing apps and an app where retailers can advertise food that is too good to go in the bin. All for a good cause, as Madame Gazelle would say, although frankly it doesn’t feel quite right to monetise your leftovers but still get paid so little for them.

We are sandwiched between tech unicorns and the fuzzy – yes, still – prospect of climate catastrophe. But as we grapple with the problem of how to keep our resources in the loop, how to become more sustainable, it will be important to be really selective about the technology we choose to adopt, and to invest in, to distinguish between value extraction and value addition. To keep our feet on dry ground, and our sandwiches crusty.

Angela Ruttledge is a restaurateur. She co-owns Monck’s Green and Olive’s Room