For me, the first week of the year is the week I look back with a notebook in front of me. I don’t do festive reviews or lists of resolutions I’ll have forgotten by February. I just try to understand what changed around us and what it means for someone running a small or medium-sized business in Romania.
2017 was a restless year. We had a crypto fever like nothing I’d seen before, a tax code that kept shifting under our feet, a European data law knocking at the door and two giants taking an ever bigger slice of online advertising. Below are the lessons I drew from it. They aren’t absolute truths, just the notes of an entrepreneur who has been in business for more than 20 years and online for more than ten.
1. Crypto mania: don’t confuse price with value
Four months ago I wrote about bitcoin crossing 4,000 dollars and wondered whether it was a bubble. Around mid-December it came close to 20,000, then lost a good chunk of its value within days. Meanwhile, initial coin offerings (ICOs) raised billions of dollars, by market estimates, many of them on the strength of a document called a “white paper” and a nice-looking website.
I’m not saying blockchain is a fantasy. I think the technology is here to stay and will find real uses. But in December I saw people putting their savings, sometimes even borrowed money, into coins they couldn’t explain at all. The lesson for a small business owner is simple: company money is not money to speculate with. If you want to try, use an amount you can afford to lose entirely, and don’t let the chart on your phone steal your attention from the business that actually feeds you.
2. Tax instability: build a company that survives change
If you ran a company in Romania in 2017, you know the feeling. The thresholds for micro-enterprises (a special low-tax regime for small firms) changed, personal income tax drops from January 1, and social contributions were moved, practically overnight, from employer to employee. Accountants spent December working as if it were stock-taking eve, and many entrepreneurs only found out what was happening when the emergency ordinance appeared in the Official Gazette.
I can’t change the pace at which laws are made. I can only build my business so that it doesn’t depend on a single tax advantage. If your business model only works under one particular tax regime, you don’t have a model, you have a loophole. My lessons:
- calculate your margin in the bad scenario too, not just today’s;
- keep a cash reserve for a few months, because changes arrive without notice;
- pay for a good accountant who calls you when something comes up, not one who just files returns;
- don’t make big decisions (mass hiring, investments) in the week a new ordinance is being debated.
3. GDPR: May 2018 is closer than it looks
On May 25 the General Data Protection Regulation, GDPR, comes into force. The maximum fines, up to 4% of global turnover or 20 million euros, have scared everyone. But the real problem isn’t the fine. It’s that most small companies don’t know what data they collect, where they keep it or on what legal basis they send newsletters.
Having worked for years with online stores and with data about visitor behavior, I see GDPR as a mandatory spring cleaning. Say you run a cosmetics store with a list of 30,000 addresses gathered over the years, some from contests, some from partners. Now is the time to find out which of them are really yours. Last year I wrote that email marketing isn’t dead; that still holds, it will just live a healthier life with a smaller, clean list than with a big, dubious one.
4. Facebook and Google: don’t build your house on someone else’s land
Digital advertising keeps growing, but the growth isn’t shared equally. By market estimates, Facebook and Google together take roughly half of the world’s online advertising and most of its growth. For a small entrepreneur that’s both good and bad news. Good, because you get targeting tools that ten years ago only big corporations had. Bad, because someone else writes the rules of the game and can change them at any time.
The debate over Facebook Ads or Google AdWords is useful, but the more important question is a different one: what is still yours if the cost per click doubles tomorrow? Your customer list, your direct relationship with them, your brand, your own content, word of mouth. Invest in the channels you control as seriously as you invest in ads.
5. Voice assistants and all the AI talk: be curious, not panicked
This Christmas, smart speakers from Amazon and Google were among the best-selling gifts in America. Everyone is talking about artificial intelligence, from self-driving cars to algorithms that write text. In Romania, Alexa doesn’t speak Romanian yet, and for most small businesses all of this sounds like science fiction.
My lesson is about balance. You don’t need a voice search strategy by tomorrow. But it’s worth understanding where things are heading. Last year chatbots were all the rage; some stayed toys, others genuinely answer customer questions. AI will go the same way: the value isn’t in the buzzword but in the concrete problem it solves. Ask yourself where in your business the same decision gets made hundreds of times a day. That’s where, sooner or later, an algorithm will help you.
6. The talent shortage: good people no longer queue up
Perhaps the toughest lesson of the year. Specialists are emigrating, and those who stay can pick and choose. Programmers, engineers, doctors, but also waiters, drivers and skilled workers. Salaries have risen fast, and the minimum wage went up again on January 1. For a small company, competing for people has become as hard as competing for customers.
What did I learn? That a good employee doesn’t stay just for the money, but will certainly leave if the money is too little. They stay for a boss who respects them, for a project they believe in, for flexibility and for the chance to learn. And that investing in automation isn’t a whim but a necessity: if you can’t find people, you have to do more with the ones you have.
7. How I see my own work at the start of 2018
With Retargeting, we have spent several years building, from Romania, a platform designed for global markets, with an eye mainly on the United States. That has taught me to look at trends without purely Romanian glasses: what happens in America today reaches us two or three years later, while what happens here with legislation and talent forces you to be more efficient than competitors elsewhere. I see my work as a continuous exercise in adaptation, not as a race with a finish line.
Closing thoughts
If I had to sum up 2017 in one sentence: the world moves faster than companies do, and the companies that survive are the ones that keep their calm, their cash and their people. The rest is noise. What lesson are you taking with you into 2018? Which of last year’s changes hit your business the hardest?