3 ms·

> On the flip-side, you could just have 1 single B2B client paying $10k per month for a service and make 10x the amount, with lower running costs and no churn.

> On the flip-side, you could just have 1 single B2B client paying $10k per month for a service and make 10x the amount, with lower running costs and no churn. Why does he assume there would be no churn? The churn would be binary and catastrophic if it happens. Separately, I've found some businesses are hesitant to do businesses with a small/solo startup because of the risk it entails. Some of them wanted me to put our code in escrow in case something happened to me personally. Some are just hesitant to business with a smallish startup, whom they figure might not exist next year. B2C customers don't seem to care about this as much.

Jemaclus 3y ago
Generally speaking, B2B involves contracts which guarantee business for a certain period of time. Churn won't be zero, but it's not going to happen on a whim, like a B2C Netflix subscription would. You can lock in 10K/mo for 12 months and have that guaranteed income, while 1000 users at $10/mo might churn every month. The hesitancy part you mentioned isn't really a churn thing but rather part of the sales cycle. One thing the author didn't mention is that B2B sales cycles are _really_ long. You can convert a B2C Netflix subscriber in 15 minutes, but it could take 6, 12, 18 months to convert a B2B customer into a paying contract. Technically, the author is correct in that B2B can lead to more stable businesses and less work overall, but the lengthy sales cycle can be draining in its own way, even if the end result winds up being "better" for the solo founder. (It could be worse, too, depending on contract terms!) In other words, I agree it was a poorly worded statement, but the author isn't totally wrong there, but they aren't totally right either. They oversimplified the advice, ignoring the complexities of B2B.
cultofmetatron 3y ago
yea seriously.. 1 B2B client paying 10k/month is just a job with extra steps and all liabilities on you.

Jemaclus 3y ago

Generally speaking, B2B involves contracts which guarantee business for a certain period of time. Churn won't be zero, but it's not going to happen on a whim, like a B2C Netflix subscription would. You can lock in 10K/mo for 12 months and have that guaranteed income, while 1000 users at $10/mo might churn every month. The hesitancy part you mentioned isn't really a churn thing but rather part of the sales cycle. One thing the author didn't mention is that B2B sales cycles are _really_ long. You can convert a B2C Netflix subscriber in 15 minutes, but it could take 6, 12, 18 months to convert a B2B customer into a paying contract. Technically, the author is correct in that B2B can lead to more stable businesses and less work overall, but the lengthy sales cycle can be draining in its own way, even if the end result winds up being "better" for the solo founder. (It could be worse, too, depending on contract terms!) In other words, I agree it was a poorly worded statement, but the author isn't totally wrong there, but they aren't totally right either. They oversimplified the advice, ignoring the complexities of B2B.

cultofmetatron 3y ago

yea seriously.. 1 B2B client paying 10k/month is just a job with extra steps and all liabilities on you.