Op-Ed: The power of databases for small businesses
The internet is the great catalyst for businesses in our time. Essentially, the internet allows us to connect and converse with potential customers, learn about their interests and create value beyond the sale of a product.
It’s essentially the same as what my grandfather, Sotero Sepúlveda, did in his small store in the Caimito neighborhood, where he sold bread, milk, “malta” and other essential products.
Occasionally, he would get other products for a special occasion; as a good merchant, he listened to his customers’ interests. Now, with the power of the internet and microprocessors, we can take those relationships to previously unimaginable scales.
Despite how easy and accessible local platforms like Uva! and Dame un Bite have made it possible for merchants to digitize their products and services, we live in Puerto Rico, where our capital ranks last for ease of doing business in the United States.
This issue is not limited to our capital; doing business across our archipelago is an extremely expensive headache. Energy costs consume the slim margins of retailers who can operate after navigating our complex permit system. In addition to energy costs and the cost of a good “gestor” (liaison), you must add taxes, labor and all the other expenses associated with entrepreneurship.
Many entrepreneurs have seen the possibility of starting or expanding through e-commerce. It is estimated that more than 5,000 Shopify accounts exist in Puerto Rico. The platform allows opening an e-commerce website without the need for actual programming. Thanks to this digitalization of companies, driven in part at the public policy level with programs like Puerto Rico Emprende, thousands of entrepreneurs are moving forward with their ideas.
These platforms enable companies to develop databases. As external platforms or software as a service (SaaS), their business model depends on many companies using their service. They focus on developing software for consumer data security infrastructure and payment processing. A SaaS platform eliminates the cost that each entrepreneur would otherwise have to incur.
Let’s go back to databases because this is where the magic happens. They store valuable information such as customer contact details, products they view and purchase, among other information. Through processes like data mining and predictive analysis, algorithms – now enhanced by artificial intelligence – identify consumption patterns that nourish the growth strategies of these small merchants. In e-commerce, data is used to add value to the customer while increasing entrepreneurial efficiency.
While well-intentioned, these regulations will significantly increase costs for businesses. If approved, we can add one more cost to the grim picture mentioned earlier. We must note that this legislation would apply exclusively to local entrepreneurs, as there is no authority to make international companies like Wish or Shein comply with these impositions.
As a society with a weak economy, we must act in favor of those who create economic development: the entrepreneurs. It is time to jointly devise a framework that promotes business creation and growth. We cannot continue to compete for the last place on the list of cities where it is easiest to do business.