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Many thanks for weighing in! So if I understand you correctly, you are arguing that most B2Bs are destined to fail because the VC investments usually do not wo

Many thanks for weighing in! So if I understand you correctly, you are arguing that most B2Bs are destined to fail because the VC investments usually do not work out for the size of the market (investments too large vs potential market). One thing we observed at AI B2B companies is that they seem to be perpetually 'behind' in terms of revenue growth. That is, B2B cycles seem to be so long that a company has gone through several investment rounds (often A-B) while it's still closing its first deals. So even though the eventual market may be large, it just takes painfully long to get there. In the meantime, commoditisation of features kicks in, and most ML B2Bs fail there. Seems like there are two possible moves here: - Slowly work on this to move ahead on that painfully long curve, apply to YC or similar when already close to seeing revenue from first case studies/licenses. In our (limited) experience, it takes easily 2 years to go through a trial case study in new B2B tech. - Try to find funding/YC/other accelerator straight away based on strong credentials/credibility in this domain and a very large potential win. In your experience, what do B2B-winners do?

caseymarquis 7y ago
Just to answer the last question, successful B2B firms provide provable ROI. The company I'm with currently has a couple thousand customers, and every single sale is about proving our product will provide a return that exceeds the time and money invested in it. That said, you usually need a 'lighthouse'. This is a term commonly used for a reasonably sized firm which had taken the leap with your product and can be shown or referenced to future potential customers. This is why partnering with a customer can be a good path. It provides immediate feedback on your product, and also gives you a showcase for future prospects. In your situation, I would probably be looking for a customer that stood to greatly profit from the use of your product and try to pitch it to them as an R&D investment. To be honest, this won't be that much harder than your first B2B sale would normally be, as either way there's no proof of ROI. If you're dead set on VC, then you need to figure out how much of your product it would actually be possible to sell. If that number is in the billions (which means you must be generating more than that for your customers), then think about everything which gives your group a first move advantage and allows you to become a near monopoly. If that all adds up, then VC money may be right for you. If not, VC money could drag down an otherwise good idea.

caseymarquis 7y ago

Just to answer the last question, successful B2B firms provide provable ROI. The company I'm with currently has a couple thousand customers, and every single sale is about proving our product will provide a return that exceeds the time and money invested in it. That said, you usually need a 'lighthouse'. This is a term commonly used for a reasonably sized firm which had taken the leap with your product and can be shown or referenced to future potential customers. This is why partnering with a customer can be a good path. It provides immediate feedback on your product, and also gives you a showcase for future prospects. In your situation, I would probably be looking for a customer that stood to greatly profit from the use of your product and try to pitch it to them as an R&D investment. To be honest, this won't be that much harder than your first B2B sale would normally be, as either way there's no proof of ROI. If you're dead set on VC, then you need to figure out how much of your product it would actually be possible to sell. If that number is in the billions (which means you must be generating more than that for your customers), then think about everything which gives your group a first move advantage and allows you to become a near monopoly. If that all adds up, then VC money may be right for you. If not, VC money could drag down an otherwise good idea.