Each week as Smallbizlady, I conduct interviews with small business experts on my weekly Twitter talk show #SmallBizChat. This is excerpted from my #SmallBizChat interview with Phil Simon @philsimon. Phil is the author of the The New Small; How a New Breed of Small Businesses is Harnessing the Power of Emerging Technologies He consults companies on how to optimize their use of technology. While not consulting, Phil speaks about emerging trends and technologies. He’s also the author of Why New Systems Fail (Cengage, 2010) and The Next Wave of Technologies (John Wiley & Sons, 2010). He also writes for a number of technology-oriented media outlets. For more information http://www.the newsmall.com

Smallbizlady: Is it better to be a small company these days?

Phil Simon: Yes. Small companies via emerging technologies can act big much easier than big companies can act small.

Smallbizlady: How can small companies keep technology simple?

Phil Simon: Don’t reinvent the wheel. If a solution meets 90% of your needs, ask if that is sufficient. Fear of changing a business process can easily spiral out of control. Also, learn from others. It’s important to see what your competition is doing. Ignore them if they don’t get it; copy them if they do.

Smallbizlady: How can using technology effectively keep customers and employees happy?

Phil Simon: Well, recognition and praise are very important–arguably more so than pecuniary rewards. With respect to technology, make sure that your company uses collaborative tools to make work easier and more efficient. No one wants to schlep into work in the snow for a one hour meeting because your company doesn’t embrace video Skype, Google Docs, or another tool that would enable efficient collaboration.

Smallbizlady: You write that new small companies make mistakes, yet they handle them better. Can you explain?

Phil Simon: Sure. Politics don’t dominate these companies. No one is crucified for getting it wrong. Getting it right trumps avoiding incessant blame fests.

Smallbizlady: What are add-on tools? How do small companies use them?

Phil Simon: Add-on tools extend the capabilities of native applications. Think plug-ins for WordPress or Firefox, although there are many others. In short, they extend the power of vanilla applications. For example, a Skype plug-in allows you to record video of conversations for future use. That doesn’t come with the native application.

Smallbizlady: How can small companies manage risk?

Phil Simon: Realize that you’ll never eliminate it. Risk is a function of time, information, and money–neither of which is unlimited. Understand that, to be great, you have to take risks. The key is to take intelligent risks.

Smallbizlady: What are the five enablers of successful small businesses?

Phil Simon: 1. Cloud computing allows people and organizations to access their data and apps anywhere and at any time. Think Google Docs or Rackspace.

1. SaaS of software as a service allows organizations to “rent” software in lieu of buying it. Think Salesforce.com or Workday.
2. Free and open source software (FOSS) allows organizations to save a great deal of money by not paying for proprietary software. Think Wordpress, OpenOffice, or Firefox.
3. Mobility means apps, texts, and, increasingly, portable pictures and video. Think iPad, iPhone, and other devices. Something like 75 new tablets are coming out this year.
4. Social technologies (read: social media and networks) allow organizations to connect and collaborate like never before. Think Yammer, Facebook, LinkedIn, Twitter, and a whole host of others.

Smallbizlady: Why do you think new companies should expand with technology cautiously?

Phil Simon: Because you can. The Freemium model allows companies to date before they get married to an important company-wide application. Fifteen years ago, this simply wasn’t possible.
As I wrote in my first book, systems and applications fail for all sorts of reasons. Why not try one out first to see if it will fly in your company?

Smallbizlady: What are hybrids? How do small companies use them?

Phil Simon: Hybrids are employees who can do both the functional and technical jobs in a small business (i.e., sales and “back-end” work). Small companies try to hire efficiently, typically finding people who can wear multiple hats. These businesses aren’t big enough to warrant using “specialists” in the traditional sense.

Smallbizlady: How can managers handle their communications needs on the cheap?

Phil Simon: They encourage employees to find the right tools. Once something reaches critical mass, they’ll give it a shot.  There are so many products are based on the “freemium” model; it’s rare now that you have to sign a traditional contract with a vendor before you can kick the tires on collaborative tools. These companies embrace IM tools such as Meebo, calling tools like Skype and GoogleVoice, and simple hardware like webcams, Smartphones, and digital cameras.

Smallbizlady: What are your favorite technology tools and why?

Phil Simon: I’m a big fan of Twitter and related tools such as paper.li and HootSuite. They allow me to keep tabs on what’s going on in certain areas. WordPress is simply an amazing tool for easily creating and distributing content. I can’t believe that I’ve only been on it for a year. Kickstarter has been invaluable in helping me raise funds for The New Small and discover some other pretty neat projects. GoogleDocs is great for easy collaboration.

If you found this interview helpful, join us on Wednesdays 8-9pm ET follow @SmallBizChaton Twitter.

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.