Who Are Our Customers?

September 23, 2009

When talking to a wide variety of outsiders about SoftLayer, one question inevitably comes up. “Who are your customers?” It always takes a bit of explaining – it’s a bit like asking the power company the same question. In the power company’s case, the answer is “anyone who needs electricity.” SoftLayer’s customers run the gamut. There is no one particular industry vertical that dominates our customer base. Pretty much anyone who needs dependable, robust, hosted IT services is our customer, or potential customer.

Now, if we look outside of the silos of industry verticals, there is one type of customer that stands out more than others. That is the entrepreneurial small business. Small businesses are the backbone of our economy and the engine of economic growth, and thus I need to keep up with what is going on with things that affect small businesses.

So I ran across a study worth passing along via a blog post. It is produced by Kauffman: The Foundation of Entrepreneurship and is entitled “The Anatomy of an Entrepreneur: Family Background and Motivation.” It contains some valuable insights into some traits of the majority of our customers. These traits below are taken straight from the report:

Company founders tend to be middle-aged and well-educated, and did better in high school than in college

  • The average and median age of company founders
    in our sample when they started their current
    companies was 40. (This is consistent with our
    previous research, which found the average and
    median age of technology company founders to
    be 39).
  • 95.1 percent of respondents themselves had earned
    bachelor’s degrees, and 47 percent had more
    advanced degrees.

These entrepreneurs tend to come from middle-class or upper-lower-class backgrounds, and were better educated and more entrepreneurial than their parents

  • 71.5 percent of respondents came from middle-class
    backgrounds (34.6 percent upper-middle class and
    36.9 percent lower-middle class). Additionally, 21.8
    percent said they came from upper-lower-class
    families (blue-collar workers in some form of
    manual labor).
  • Less than 1 percent came from extremely rich or
    extremely poor backgrounds

Most entrepreneurs are married and have children

  • 69.9 percent of respondents indicated they were
    married when they launched their first business. An
    additional 5.2 percent were divorced, separated, or
    widowed.
  • 59.7 percent of respondents indicated they had at
    least one child when they launched their first
    business, and 43.5 percent had two or more
    children.

Early interest and propensity to start companies

  • Of the 24.5 percent who indicated that they were
    “extremely interested” in becoming entrepreneurs
    during college, 47.1 percent went on to start more
    than two companies (as compared to 32.9 percent
    of the overall sample).
  • The majority of the entrepreneurs in our sample
    were serial entrepreneurs. The average number of
    businesses launched by respondents was
    approximately 2.3; 41.4 percent were starting their
    first businesses.

Motivations for becoming entrepreneurs: building wealth, owning a company, startup culture, and capitalizing on a business idea

  • 74.8 percent of respondents indicated desire to
    build wealth as an important motivation in
    becoming an entrepreneur. This factor was rated as
    important by 82.1 percent of respondents who
    grew up in “lower-upper-class” families.
  • 68.1 percent of respondents indicated that
    capitalizing on a business idea was an important
    motivation in becoming an entrepreneur.
  • 66.2 percent said the appeal of a startup culture
    was an important motivation.
  • 60.3 percent said that working for others did not
    appeal to them. Responses to this question were
    relatively evenly distributed in a rough bell curve,
    with 16 percent of respondents citing this as an
    extremely important factor and 16.8 percent of
    respondents citing it as not at all a factor.

Not only do the traits above describe a big chunk of SoftLayer’s customers – they also describe the people of SoftLayer.

If you are an entrepreneurial small business and you need a hosted IT service provider who understands your needs, you will find a likeminded partner in SoftLayer. Many of the small businesses who joined with us two or three years ago aren’t so small anymore, and that’s fine! When our customers succeed, we succeed. We get that.