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Does the American Dream still include small businesses?


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Does the American Dream still include small businesses?

An architect fighting for Main Street retail and his design firm dares to question the myth.Pexel: Free to use. No attribution required.Up until around March 10th, 2020, my career path looked like one long road. And my daily routine was similar to that of a roadie managing a band, or small symphony.I’d get up early…

Does the American Dream still include small businesses?

An architect fighting for Main Street retail and his design firm dares to question the myth.

Kevin Ervin Kelley, AIA

Man lying in the center of road with his arms spread and wiped out.

Man lying in the center of road with his arms spread and wiped out.

Pexel: Free to use. No attribution required.

Up until around March 10th, 2020, my career path looked like one long road. And my daily routine was similar to that of a roadie managing a band, or small symphony.

I’d get up early to drive a busload of highly accomplished design professionals late into the night to do another gig in another town.

Rinse, repeat, and back out on the road.

We’d been traveling up and down this road for the last 30 years.

What was our ultimate destination?

We thought if we put on a great show, we’d hopefully reach a point in our careers where we’d not have to walk the financial tight rope every day to survive.

But we never made it to the other side.

Every time we’d get close to reaching the brass ring, we’d encounter some unforeseen setback — such as the dot.com bust, 9–11, The Great Recession, droughts, fires, and locusts.

Perhaps we’d been using the wrong map because the road to success we traveled was not paved with gold. Instead, it was full of potholes, roadblocks, detours, flat tires, and governmental tolls for us to pay.

Running a small design firm in America is much harder and less glamorous than it looks from the outside.

And it’s been getting tougher every year.

But as tough as things had been, what came next would make the road ahead nearly impossible to traverse.

On Friday, March 13th the gears of the perpetual consumption machine we all call “the economy” came to a screeching halt. We hit a dead-end road. And we watched in shock as this tiny little organism called Covid-19 pushed the world’s largest economy over the guardrails and into a ditch.

Marquee sign of old retail theater on main street with the message: The World Is Temporarily Closed.

Marquee sign of old retail theater on main street with the message: The World Is Temporarily Closed.

Photo by Edwin Hooper on Unsplash

Most of our projects were canceled, paused, or delayed indefinitely. And we knew we’d have to start over again.

But we can’t fly, meet, assemble, shop, eat at restaurants, or open our offices. The amount of lost revenue and the debt we’ll accumulate during this shutdown will take us, and most small businesses U.S., at least three to five years to crawl out from underneath.

We still haven’t finished paying off the debt from the Great Recession.

The last 75 days of being quarantined afforded me time to reflect on the plight of small businesses in America.

The Myth of the American Dream is slipped into our water at an early age. The legendary stories about those who pursued and achieved the American Dream is a recurring tale we get a taste of every day. And we ingest this theme frequently by recounting the stories of The Little Engine That Could, Aesop’s The Tortoise and the Hare, Rocky, American Idol, and Shark Tank.

Photo of family on the hit TV show Shark Tanks pitching their new business.

Photo of family on the hit TV show Shark Tanks pitching their new business.

Shark Tank TV. Cbarrentine2 / CC BY-SA (https://creativecommons.org/licenses/by-sa/4.0)

Most Americans today can tell you more about the rags-to-riches story of Steve Jobs, Mark Zuckerberg, Mark Cuban, and Kim Kardashian, then about Thomas Jefferson, Abraham Lincoln, Martin Luther King, or Mother Teresa.

Are we better off for that? I can’t say we are.

But I get it.

If you were a kid that grew up in challenging circumstances and yearned for a better life, the American Dream sounded like a mighty compelling way to lift yourself up and out of the soup of despair.

This enduring myth— if not religion—holds out the promise that if you’re willing to work hard and long enough, you too can overcome your limits and achieve the “good life.”

“But it requires faith,” we’re told.

I don’t know about you, but I bit into that bacon-wrapped lure — hook, line, and sinker.

For most of my life, I’ve been captivated by stories about the self-made man or woman. Those who triumphed over adversity. You know, David vs. Goliath, Steve Jobs vs. IBM, the Silicon Valley upstart that started in their parent’s garage, and then wiped out Main Street, or those brokeass dudes that were couch surfing and then took down the giants of the hotel industry by renting out your spare bedroom.

These stories are not only true but worth telling over and over again.

Anytime I was tired, down, or questioning what I was doing with my life, there’d be another appetizing morsel of how someone— “down on their luck”—made it big in America by never giving up.

Whenever I tasted even just a dollop of those tales, I’d shake off any doubts and get right back on the road again to continue chasing the American Dream.

However, I’ve been going at it hard for several decades and not feeling like I’m making any headway. If anything, I feel like I’m going backward. I work harder and achieve more but earn less. Combine this feeling with the looming economic meltdown and I have to question whether there truly is a pot of gold for us at the end of the American Dream’s rainbow.

The pandemic and ensuing recession are going to disproportionately wreak havoc on the small businesses and reshape the American economy in favor of the big corporations. The big companies have stockpiles of cash on hand to weather the storm. Their positions will only strengthen now because they can easily knock out or buy up the small, weaker players during this crisis.

I’m no political philosopher, far from it. Nor have I ever had any formal classes in economics. But I’ve read some of the writings of Karl Marx, E.F. Schumacher, Paul Krugman, Robert Reich, and Thomas Piketty— more out of intellectual curiosity than anything else.

To admit you agree with any of the points of these authors can get you labeled as a communist, or worse, a “liberal.” Many in business consider their theories on capitalism to be blasphemous to the American Dream myth. So I’ve rarely mentioned them out loud. And I always made sure to hide the books when my “trickle-down theory” clients came by for a visit.

But there’s a growing suspicion the decks are stacked increasingly against small businesses in America. That the power of capitalism is concentrating more and more in the hands of the few. And when this happens, we know instinctually — or perhaps because of the warnings of George Orwell — that corruption and exploitation of the masses by the few are right around the corner.

I don’t believe any of this is intentional or coordinated, but more a result of how our current system rewards big over small.

Take, for instance, what Jim Cramer, the television host of CNBC’s Mad Money, defines as FAANG: Facebook, Amazon, Apple, Netflix, and Google. (You could probably throw Microsoft in there as well.) These megacorporations dominate their markets and are not likely to be unseated anytime soon. But many wonder if these companies are getting too big to stop?

They have a lot of data on us. And they know everything about our interests, dreams, anxieties, ailments, fetishes, and concerns.

These giants know precisely where we drive, what we order to eat, what we watch, what we buy, what time we get up, and some say, how we vote.

Surprisingly, I’m less concerned about privacy issues and more uncomfortable with their ability to predict, shape and influence our decisions.

But we trust these folks with our data, right? They wouldn’t sell it or manipulate us…would they?

I will acknowledge that all of the above FAANG businesses started small and did achieve the American Dream. They played by the rules, and it worked for them well. Hurrah!

But it seems that the stories of those who can make it in America today are getting fewer, and too extreme.

According to Bloomberg’s Billionaires Index, Mark Zuckerberg is worth a staggering $89.1 billion. And Jeff Bezos is worth over $147 billion. (As of May 24, 2020.) These individuals couldn’t spend that much money on NYC penthouses, yachts, and remote islands in fifty lifetimes.

Picture of Jeff Bezos laughing.

Picture of Jeff Bezos laughing.

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Jeff Bezos. Steve Jurvetson / CC BY (https://creativecommons.org/licenses/by/2.0)

While most American lives, jobs and small businesses will be destroyed because of the Coronavirus+recession, the pandemic has rewarded the largest and most tech-focused companies.

According to a May 21, 2020 CNBC article entitled, American billionaires got $434 billion richer during the pandemic, Bezos added $34.6 billion to his wealth and Zuckerberg picked up $25 billion.

Bezos now makes $149,353 per minute — more than most Americans make in three full years of killing themselves at their jobs. And some experts say Bezos is projected to become the first trillionaire by 2026.

Call me crazy? But something is not right about our current economic model.

Does that make me a communist? A liberal?

Before, I didn’t notice or care about income inequality or the 1% wealth issue. Just as long as I, and others like me, could run a fair race and make it in some small way. But now I wonder if small businesses and average citizens stand a chance of making it in this new economy/post-pandemic era.

Even Fed Chairman Jerome Powell said during a town hall speech to a group of educators, in February of 2019, (long before the pandemic hit) that income inequality is one of the biggest challenges of the next decade.“We want prosperity to be widely shared. We need policies to make that happen,” Powell said.

But no policies have come forth.

While “too big to fail” is still a real concern, I believe we also have a situation where small businesses are “too small to compete or get ahead.”

I’m not qualified enough to speak about the complex factors driving the global economy. But as a consultant who works with many small businesses every day, I have front-row seats to rapid deterioration of merchants on Main Street.

Far too many small businesses are losing their motivation, incentive, and belief in the American Dream. And this might be the generation where many of them close up shop for good and go extinct.

There is mounting pressure to consolidate in just about every industry. You can see it happening in milk, medicine, media, banks, newspapers, healthcare, insurance, grocery stores, meat suppliers, farming, pet stores, hardware, TV, movies and entertainment, national defense, airlines, and my field of design.

The pandemic + recession is what will kick this consolidation into high gear. Private equity sharks smell blood in the water and easy pickings. The super-wealthy have money to burn, and the small businesses of America have no choice but to have a fire sale.

“If you have some shock to the system — a financial crisis, a war — one effect is the weakest firms in the market tend to fail,” said Daniel Crane, a professor at the University of Michigan who studies antitrust law.

“I do worry that the world that recovers from this will be one characterized by firms having failed and pressure to consolidate.”

Source: Bloomberg Businessweek article: The Big Keep Getting Bigger in the Pandemic-Rearranged Economy, May 3rd, 2020

As it relates to my industry specifically, the small to medium-sized design firms are having a harder time surviving, much less competing against the giant design firms that are only getting bigger. And the size of giant design firms is allowing them to have massive portfolios of work acquired from firms they bought. It gives them incredible international reach, fantastically impressive offices, more aggressive and highly sophisticated marketing machines, strong influence with key leaders and decision-makers, and, most importantly, lower costs of doing business because of the economies of scale.

How can small design firms compete against that?

One part of me says, “Well, that’s just how the law of the business jungle works. Survival of the fittest right?”

But another part of me wonders what all this consolidation will look like for the design industry, tech, media, grocery stores, banking, and hundreds of other sectors down the road.

Is this the American Dream we all bought into as kids? More importantly, is this the kind of future we want our children to inherit from us? If so, we better get them ready to put on the uniform for one of the big megacorporations.

My colleagues and I work primarily for the small to medium-sized companies, such as local grocery store chains, retail stores, pet stores, fitness gyms, bookstores, restaurants, bars, movie theaters, orchestras, and Main Street districts.

Yes, we’re well aware that all those industries are dying.

We’re not there because of the money or the hipster-factor. We’re there because we believe in Main Street and the value of the small, local merchant. And we can’t sit back and watch these small businesses get wiped out by the tidal wave of attacks from the retail giants and tech disrupters.

Over the last three decades, we have helped hundreds of these businesses survive and thrive in a David vs. Goliath kind of way. But the Coronavirus—combined with a recession and general fears of going out in public—have made staying in business on Main Street next to impossible.

Photo by Tim Mossholder from Pexels

We’re at a pivotal moment in our country where we need to have a much more serious conversation about what kind of society and business world we want to live in going forward.

Do I personally want government nosing into our businesses every day and telling us how successful a company can become?

Not really. That always seemed un-American to me.

But I also don’t want to buy all my food from three retailers. Nor do I want my vegetables and beef products coming from two suppliers. I don’t want to get my news from three media companies. Nor do I want to have only one search engine. Or five companies that are dominating tech and controlling our data.

I didn’t worry about the megacorporations too much before because there seemed to be room in the market for small, medium, and large-sized businesses to exist, grow, and thrive in their own right.

But now that choice is quickly dying off.

The only thing that seems to be working in our country now is large scale corporations, which will ultimately lead to a fewer number of small businesses — and good jobs, as automation and an anti-benefits mentality take hold.

Some would argue that the consumer has already made a choice: They prefer big companies. But if you do the research, you will see those big companies are afforded privileges and benefits — in terms of lending, tax breaks, borrowing power, lower cost of goods, regulations, subsidies, loopholes, etc.—that small businesses don’t get.

Many of my clients and design firm peers have thrown in the towel and are just saddling up with the big firms.

They’ve given up because they see no other way to make it in America anymore.

And that’s a sad statement about the prospects of small businesses succeeding today.

The field of design was one area I thought would not only be immune but also resist the idea of the concentration of power. But I fear architecture is heading towards the big firm approach as well.

I’ve often wondered, “Should we just sell out to the giants?”

That’s what mostly happened in other artistic areas, such as music, books, and film already. Just take a look at the process of creating books, movies, or albums today.

And it’s even happening in something as small and obscure as podcasting. Once Frito Lay, Budweiser, and private equity get their arms around podcasting, it will look like an NFL SuperBowl extravaganza.

But maybe I’m old and out of touch, and this is what people want — To go big! Or go home!

What would I like to see?

First, I’d like to see more designers wake up to realize what’s happening in their industry and that of their clients. To get more involved in what’s going on in the economy, tax policy, lending, private equity, and M&A deals.

We’ve always been agents of change, and we’ve historically resisted the idea of Big Brother conformity, yet so many of us have had to take jobs with the big firms just to survive. I get it.

But if you’re a designer and believe in individual expression, diversity, variety, differentiation, and representation, now is the time to speak up before things get too big and one-sided, which leads to my next point.

Secondly—I can’t believe I am saying this—but I think it’s time we consider the idea of breaking up Big Anything: Big Oil, Big Food, Big Tech, Big Media, etc. We can’t keep having industries consolidate and fold more into each other.

We have to provide a way for small businesses to succeed if we want to maintain the myth of the American Dream for a broader audience. I’m not advocating for handouts, at least not any more than the same corporate welfare big companies already get. But we need a more level playing field where small businesses get some of the same advantages that big companies get.

Thirdly, if we keep going down this road of the consolidation of businesses and the concentration of power to just a few companies, then we must be honest about what the American Dream means for ourselves and our children.

Let’s not perpetuate the old myth.

We need to tell our kids upfront about how the American economy currently works in favor of big. And we need to prepare them to work for one of the megacorporations,

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