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The Digital Skeptic: Small Business Will Save Us? It's a Lie

NEW YORK ( TheStreet) -- Ron Daniel's more skeptical about the digital-age prospects for small businesses than I am -- and that's saying something.

"Everybody talks about the number of small businesses increasing. But that is not true," this hard-driving Israeli-American, founder of small-business tech platform company PlanetSoho, told me from Tel Aviv. He had tracked me down, figuring I'd be about be about the only numbers nerd willing to listen to his new research.

"The time each stays in business has dropped from three and a half years to two," he said. "It's getting worse out there. Progressively worse."

Investors should know that Daniel is no neutral agent. PlanetSoho sells Internet-based word-processing, client-tracking, marketing systems and other small-biz tools to what he says is just north of a million companies worldwide. Think Google (GOOG) Apps for Business, or Microsoft (MSFT) Office 365, or any one of a number of other biz-apps, but tweaked for startups. And I have to say, as small-biz Web apps go, PlanetSoho works. Pretty much what every business needs to do business is there, from customer management to task tools to docs. The value add is that there's a sort of a syllabus lurking that prompts users on which system to deploy and when. The price is also right: Paid plans start at $5 per month.

Daniel is betting his mix of handholding and technology will give small firms a better chance of survival in our take-no-prisoners digital age. (And grow his business.)

"It's about managing the risk of starting on your own," he explained. "Handling that fear of failure."

What makes Daniel worthy of wider investor interest is that, unlike the seemingly endless chorus of small-biz startup shills -- let's be honest, Richard Branson and Chris Anderson are not shy about ginning up the joys of little businesshood -- Daniel is surprisingly stark about the realities of surviving in the 21st century.

"This whole idea of the trickle down, going from big companies to small, it's just not happening," he said. "Starting your own business gets progressively harder and harder."

This has dramatic market implications, particularly for investors spinning valuation multiples in the sky for such small-business-focused enterprises as Intuit (INTU), American Express (AXP), GE (GE) and even Staples (SPLS - Get Report).
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