Another day, another rankings report

These rankings mostly just serve as clickbait to drive web traffic, but some can be meaningful.

Tell your network:

Tell your network:

All across the Internet you’ll find one rankings list after another. These rankings mostly just serve as clickbait to drive web traffic, but some can be meaningful. The challenge is separating the wheat from the chaff.

The latest report to make the rounds is Thumbtack Inc.’s Business Friendliness Survey, which gave Oregon a B grade. Let me tell you why that assessment is essentially meaningless.

Thumbtack is a company that connects people looking for services to people and businesses that provide those services. Naturally, as a business that stands to profit from increased site traffic, Thumbtack employs different tactics to drive up their number of site visitors. One of those tactics is the release of their annual rankings report of the companies that use the website. The report is based on a survey, which can be a valuable tool for gathering data, but which also comes with pitfalls that can lead to conclusions that simply shouldn’t be trusted.

At the end of the day, no one should make a business decision based on Thumbtack’s report.

In contrast to other ranking reports, which typically combine objective economic measures, Thumbtack’s survey is based on subjective questions like “In general, how would you rate your state government’s support of small business owners?” While these opinions may be interesting, the survey methods introduce a host of different biases that can skew results.

Thumbtack offered the survey to all business owners who logged into their site, but only about 17% chose to participate. And because respondents were not selected at random, there’s a high likelihood that the people who chose to participate are statistically different from business owners as a whole. For example, people who choose to complete the survey may be more opinionated and have more time on their hands, so their responses don’t necessarily reflect the opinions of all business owners.

Subjective assessments are easily skewed. People tend to remember negative experiences with greater ease than positive ones, so if a business owner had nine great experiences with state regulators and one frustrating encounter, she might still say her state is unfriendly to businesses.

Thumbtack acknowledges the survey responses are strongly correlated to respondents’ self-identified political leanings: People who identify as strongly conservative tend to think they pay too much in taxes, and people who think they pay too much in taxes tend to rate their state as unfriendly. The implication here is that people from more conservative states may rate their states less friendly to businesses even if there is absolutely no difference in how the state regulates and taxes businesses.

At the end of the day, no one should make a business decision based on Thumbtack’s report. We shouldn’t change state policies based on the survey either, but there are many things we can do to support small businesses in Oregon. We can do a better job educating our kids, to make sure that Oregon has the well-trained workforce that small businesses need. By investing more in our schools, we also build more vibrant communities. We know that when there are well-funded and well-run schools, families are more likely to stay in or move to our communities. This results in the number one thing small business owners need — more customers.

Oregon small businesses know that when our communities thrive, our businesses thrive. If we really want to make Oregon a model for supporting small business, we need to ensure that everyone is paying their fair share to support our state. When the biggest, most profitable businesses give back as much as they take, our state and local economies prosper.

Jim Houser, Hawthorne Auto, Portland & Mark Kellenbeck, BrainJoy, Medford
Co- Chairs of The Main Street Alliance of Oregon Executive Team

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