8 ms·

B2B Is Unsexy, and I Know It

153 points by dshipper 14y ago

AlexBlom 14y ago
I'm unsure the perception of B2B among VC's is as bad as commonly thought. My last startup was pure B2B, and during our valley runs I found most potential partners / vc's / workers were very excited (in part because of the opportunity, in part because of perceived market movements, and in part because B2B can be fun) at the prospect of growing in B2B. B2B companies may not spawn a media darling, but it doesn't make the business itself unsexy.
- debacle 14y ago
  The problem with B2B is that it doesn't follow the standard startup model. In B2C, if you have 10,000 users, VCs will just start to look at you. In B2B, except in some specific instances, if you have 10,000 users you're already a million dollar company. Thus, in B2C the risk/reward inflection point occurs much later chronologically than in B2B, and for a B2B business, I, personally, think that there is far too much ambiguity before that inflection point.
  - mindcrime 14y ago
    > The problem with B2B is that it doesn't follow the standard startup model Is there even such a thing? Anyway, it's not that VCs don't fund B2B startups... they absolutely do, and there are even firms that specialize in that space (or at least have a heavy focus on it). A16Z, for example, are known for investing heavily into enterprise plays: http://a16z.com/portfolio/portfolio-enterprise-companies/ http://a16z.com/portfolio/portfolio-enterprise-companies/
    - hkmurakami 14y ago
      If there is such a thing as the standard startup model, then I'd argue that it would be the B2B model. The current mold of web/social/mobile/location startups is the exception to the norm in the history of high tech startups.
  - btilly 14y ago
    ...doesn't follow the standard startup model. Remember, the standard startup model is, "Fail." Anything you can do to not follow that is good. ;-)
  - AlexBlom 14y ago
    I'm unsure this is true anymore. If you know how to play B2B (the same lies true for B2C), it's entirely plausible to get the first 1-5 deals pre-build (I did). If you consider that equal to the first traction burst in B2C, then I'd argue that the ambiguity for B2C is just as large, if not larger, in the early days. It is my no means an overall risk / reward inflection point (and if you are referring to 'this company is guaranteed to exit' I agree), but as an early 'this might have something' B2B can validate fast.
mindcrime 14y ago
Good stuff, and I agree with almost 100% of that. The only thing I take exception to is the (seemingly) implicit suggestion that "sexy" is defined by what college kids like: And that’s true. B2B is unsexy in that I don’t build things that my college friends want to use. Nah... if you're doing sexy technology, it's sexy even if not a single college kid has ever heard of it. I'd encourage everyone to NOT buy into the HN echo chamber mentality... there is a LOT more to the business world than consumer facing geo-local-social-mobile-photo-sharing-cat-picture startups. Do cool shit that solves problems for people, charge for it, and make money... that's not a half-bad formula. (disclosure: I'm a founder of a very sexy B2B enterprise software startup).
- dshipper 14y ago
  I agree with your point. I based my definition of sexy on what tends to get media coverage - which are generally ideas that college kids want to use. But I certainly agree that sexy companies exist that no college kid has ever heard of.
- hkmurakami 14y ago
  Wholeheartedly agreed. My reaction to the headline was: "What!? B2B is awesome! It's REAL!"
  - bpatrianakos 14y ago
    I think you nailed it in the least amount of words. You're right, it's real! B2C has become the land of also-rans. It's the same old, same old but this time with a new interface, a special niche, and so on but in the end it's all the same app with a different logo each time. B2B solves problems that make it easier for customers to solve another problem. They're real tools that create real value as well as wealth for its customers. That's probably why B2B pays while consumer focused startups have a hell of a hard time monetizing. If I had to pay for Facebook I'd say fuck it and use the phome which I already pay for. If Quickbooks started free then asked me to pay I'd pony up because it not only saves me time and the monetary value of my time but it also saves me on hiring someone to do the work Quickbooks does for less. That's a real problem. Another example happened to me just today. I'm heading up a project to start A/B testing our marketing efforts where I work. Right now I signed us up for a free Mixpanel account that I'm using to kind of start showing the team hard numbers before actually buying anything. This morning I had a meeting with someone from Optimizely which actually does exactly (literally exactly) what we want to do better than Mixpanel. I was shown how the service works and got a nice run through and at the end of the meeting I was dying to buy their platinum plan because of how much time it would save me personally, how much money it would save our company, and also for what the product itself does. My point here is that you don't see that in the B2C space. Most users would complain if a Facebook disappeared overnight but they sure as hell wouldn't whip out their wallets to keep it alive like B2B customers do when they like a service.
jsiarto 14y ago
We're a B2B shop and have been profitable from day one. Sometimes it takes a while to get paid from the big guys, but once you're in, cash flow is great. There are some downsides (control, last minute BS, corporate things)--but it seems to be easier to get companies to part with their cash than your neighbor or suite-mate.
- jacques_chester 14y ago
  The secret to B2B is that it's almost never somebody's actual personal money. If I as the manager approve the $5000 WooFiz 7 Platinum purchase, I might feel a some concern to ensure that the ROI is defensible. But that's it. Because it's not my money. If WooFiz turns out to be junk ... well, that sucks. But I'm not personally out of pocket.
vkatluri 14y ago
How does one enter the B2B market? Does B2B mean you're solving how two companies do business with each other?
- mindcrime 14y ago
  > How does one enter the B2B market? Create a product that solves a need that businesses have and sell it to them. Steve Blank's The Four Steps To The Epiphany is a great resource that is heavily focused on the B2B world. > Does B2B mean you're solving how two companies do business with each other? No, it just means that your business ("B") is selling "2" other businesses ("B"). So, when IBM sells WebSphere AS to other businesses, that's a B2B market. B2C, conversely, is when you sell something to consumers. So, Wal-Mart is mainly B2C. The lines aren't always clear, and there are other models that don't quite fit either definition.
  - SudarshanP 14y ago
    Thanks for that clarification. I too was under the wrong idea that B2B were somehow guys involved in connecting businesses to each other though their solutions. So B2B and enterprise software are the same? Does 37signals/Tello count as B2B or B2C?
    - hkmurakami 14y ago
      Enterprise Software is a subset of "B2B". B2B encompasses any business that sells products and services to other businesses. The universe spans Alcoa (the world's largest aluminum producer) to Oracle (perhaps the world's most evil software producer).
pnathan 14y ago
Well put. No one has heard of the company I work for, and we do some seriously cool B2B stuff. We're 100% employee owned and are #1 in certain segments of our customers. No, we're not "sexy", we're not media darlings, and "social media" is really not in our genes. But our products are really awesome. :-)
- philwelch 14y ago
  You also have a rack of exotic blue hardware at every engineer's desk, can't complain with that.
  - spitfire 14y ago
    SGI still exists? What are you talking about?
    - pnathan 14y ago
      We both used to work at the same company. It makes custom hardware. The company's "preferred" color is blue. Hence, blue boxes at every engineer's desk.
      - spitfire 14y ago
        So what's the company?
  - pnathan 14y ago
    Yeah, that's an unusual dimension it's fun to learn about - don't get that everywhere.
rodolphoarruda 14y ago
Lots of Jason Fried's influence in the subconscious, I should say. Two or three segments seem to be extracted verbatim from 'Getting Real' book. Nice text, congrats.
- dshipper 14y ago
  It's funny I've never read that book but love Jason Fried. Thanks for the comment :)
codexon 14y ago
The huge advantage of B2B is that businesses get to write off your payment as an expense, so they are much more likely to pay you more.
bdunn 14y ago
I wouldn't ever consider building a product for consumers. Why? * Businesses are used to paying for services. * Businesses can typically make judgements about the ROI of software (X saves Maggie 5 hours a week. That translates to $200 in pay. Sure, $100/mo is worth it.) Consumers can't. * Businesses pay thousands of dollars a month for each person on staff. If you can eliminate the need for a position, a business will probably willingly pay 3 to 4 figures for your software.
- karamazov 14y ago
  I've never heard the term '3 figures' before :)
  - StavrosK 14y ago
    Do you mean you haven't heard "three", or "figures"? Because you've definitely heard "six figures".
    - hkmurakami 14y ago
      One of those cases where you've heard "three" and "figures" but not "three figures" :P (I've probably heard it used only a few times in my life)
      - StavrosK 14y ago
        Oh, right. Same here, come to think of it. I wonder what other cliche phrases we can ruin.
  - bdunn 14y ago
    As in $XXX or $XXXX I'm also so focused on subscription revenue that I forgot to clarify that. Get a few $XXXX/month businesses and you'll have six figure annual revenue before you know it.
nbashaw 14y ago
My response: http://nbashaw.com/post/28654441223/consumer-internet-isnt-dead http://nbashaw.com/post/28654441223/consumer-internet-isnt-d... In a nutshell, I think there's still a lot of value in creating web and mobile apps for consumers, it's just that there's been a glut in the market, especially for mobile. Too many apps that aren't very differentiated. In the long run I still think consumer is a good play, though.
deleted 14y ago
[deleted]
diminium 14y ago
This feels like deja vu. I asked a similar question in http://news.ycombinator.com/item?id=4182993 http://news.ycombinator.com/item?id=4182993 B2B is also very dysfunctional. You almost have to operate in a different reality to survive there. diskdoctor answered with "Marketing and selling software to enterprises is the most dysfunctional cycle of decision making you will ever see in business. In almost all cases the individuals in the business who actually derive value from the technology are entirely disconnected from those who make the purchasing decisions. Many times those purchasing decisions are made based on "perceived" synergies with other software systems already owned from the same vendor, having never been vetted by the actually consumer in the business." This is probably the biggest difficulty in B2B. Steve Jobs even said something similar "What I love about the consumer market, that I always hated about the enterprise market, is that we come up with a product, we try to tell everybody about it, and every person votes for themselves. They go ‘yes’ or ‘no,’ and if enough of them say ‘yes,’ we get to come to work tomorrow. That’s how it works. It’s really simple. With the enterprise market, it’s not so simple. The people that use the products don’t decide for themselves, and the people that make those decisions sometimes are confused. We love just trying to make the best products in the world for people and having them tell us by how they vote with their wallets whether we’re on track or not.”
- paulsutter 14y ago
  Dropbox found a way around that. It's heavily used within corporations, but the adoption decision gets made by each individual acting alone. Ping Li has an excellent paper on this: http://www.accel.com/assets/resources/files/17/original_renaissance_of_business_software.pdf http://www.accel.com/assets/resources/files/17/original_rena...
  - theatrus2 14y ago
    Apple and Dropbox are both successful in the "enterprise" (and more so in the small business) because of this. They didn't sell to the company, they sold to the users and employees.
- bmelton 14y ago
  That's a poignant quote, and also one of the biggest pain points in selling to enterprise / federal customers. The less spoken, easier way around is to target smaller companies. The people making the decisions have more direct influence on the purchase, and are also a lot more likely to be involved in the actual use of the software. This has worked out well for FogCreek, 37Signals, et al.
eli 14y ago
I'm doing an ad-supported B2B media startup now. So that's doubly unsexy since free ad-supported media is not a very trendy business model right now. But it works because we understand our market, we understand marketers, and we've had a dedicated sales staff since day 1. You can make a lot of money with ads if you don't treat them as an afterthought.
dgudkov 14y ago
>The biggest opportunities probably aren’t in social anymore Economy struggles because there almost no new ways to increase labor productivity further. Making business tools more collaborative and social may boost labor productivity to next level. It's too early to dismiss social completely even if it's hit glass ceiling in B2C market.
malkia 14y ago
What's B2B?
- andrewflnr 14y ago
  Business to business.
robwhitley 14y ago
B2B = better to bet for VCs in the coming years.
j45 14y ago
This article speaks to a point that most miss: The business model can be as sexy, or sexier than the idea itself. When we build something that is boring to some, I wonder if we forget the magic of what we do. What is boring to us is magic to someone, stuck suffering with managing details. It's nice to see the maturation of developers who do for the world what's being asked of us: help everyone everywhere, with software. About B2C or B2B: 1) It's a preference. A reality is, there is not as much B2C out there as we think. Too many consumer facing "successes" do not take money from "customers". Why? The users are the product that are sold to advertisers. They often ask businesses to pay, maybe by advertising, and it's a lot of work. 2) Consumers are quite fickle, irrational and emotional decision makers. They will often think about any decision over $5/month. Small businesses, on the other hand, don't think about $50/month too much. They're fairly logical (a good fit for developer's tendencies), and very much understand and make decisions based on value -- saving them, or making them money. They'll also be more forgiving about understanding features-based marketing instead of benefit-based marketing if you can't dial in your copywriting. In short, there's more flexibility to learn and still do well enough to keep improving. 3) If you let a sliver of your talent tackle a B2B problem that customers will pay for, you get to keep the panacea much easier: Work on what you want every day without fear of paying the bills, or pursuing a swing for the fences idea without fear of failure or running out of money. Not everyone gets to live in the Valley. I'm sure I'd be open to other possibilities if I lived there, but I don't right now. If you're out for the first success or two of your life, consider this: check any ego and immature thought habits to fit in. Exchange them with discipline, to learn what you need to about the fundamentals of building a business, it will serve you very well when going after the B2C ideas. Almost everyone who tries to fit in, inevitably gets left behind. Do what others aren't willing to do to build a business that makes money, because it's worth way more, to customers, and VC's. As every single person on HN gets older, they will have more responsibilities because of the other things in their lives they want, and cost money every month. There's a chance now to address those very easily and get some great business development experience. That doesn't sound like much to some, but startups are a longer haul game than anyone ever admits.
- the_cat_kittles 14y ago
  william carlos williams couldn't have said it better
unimpressive 14y ago
To me, a sexy business is one that helps people and makes money. By this definition the majority of social startups are as unsexy as possible.
rickmb 14y ago
There seems to be an odd notion that B2B must be about accounting and such. Most B2B stuff I've been involved with the past few years has all been "social". Because, like soylent green, companies mostly consist of people...
pilif 14y ago
We're working since 2001 on a b2b software. While it might seem boring, it's not in the least (minus some rare low points, but you get these everywhere). It's also very rewarding to see users be productive with the software and be grateful for making their lives easier. In fact, many of the end users are to this day computer illiterates and making great software they can use is a very interesting challenge. Also the technical stuff. Just because it's b2b doesn't mean you can't make it interesting for you. Whatever new technology comes around, I make it a point to try it out and apply it in production where it helps. We've done AJAX before it was called that. We've been running node.js since the 0.2 days and we've solved interesting scaling problems. There is nothing we can't do that makers of consumer products can do. The difference is that we are getting paid handsomely ever since and that we don't have to deal with advertisers or, god forbid, VCs. Thanks mainly to our product Switzerland was and still is one of the countries with the highest percentage of electronic orders among dentists (I only have numbers there. The restaurants numbers might be even bigger). Combine that with the cool technical challenges to solve and you are left with a very interesting job that just never gets old.
- jacques_chester 14y ago
  I agree that solving people's pain points is one of the best parts of doing enterprise-y stuff.
DRMacIver 14y ago
So I've done a B2B company before and am doing one now (current place isn't intrinsically B2B but that's our main focus. It's certainly not something normal consumers would use). I think this understates what incredibly hard work selling B2B can be. Large companies will pay you a lot of money, but are ridiculously high maintenance - they expect custom work on your product (often of the "Can you integrate it into our ActiveDirectory/Exchange/etc" form) and the sales process to them is incredibly long. Small companies on the other hand are often strapped for cash and have weirdly distorted views of the value of their time - If what you're selling them is something they can "do now" by spending 3 hours of an employee per day it can make it very hard to convince them to pay you at a rate you'll be able to sustain a profit on. Neither of these are impossible to overcome of course. People can and do do extremely well with B2B businesses. I just want to point out that there are real problems with selling B2B as well, and that it's not nearly as easy as it might sound.

153 points by dshipper 14y ago

I'm unsure the perception of B2B among VC's is as bad as commonly thought. My last startup was pure B2B, and during our valley runs I found most potential partners / vc's / workers were very excited (in part because of the opportunity, in part because of perceived market movements, and in part because B2B can be fun) at the prospect of growing in B2B. B2B companies may not spawn a media darling, but it doesn't make the business itself unsexy.

debacle 14y ago
The problem with B2B is that it doesn't follow the standard startup model. In B2C, if you have 10,000 users, VCs will just start to look at you. In B2B, except in some specific instances, if you have 10,000 users you're already a million dollar company. Thus, in B2C the risk/reward inflection point occurs much later chronologically than in B2B, and for a B2B business, I, personally, think that there is far too much ambiguity before that inflection point.
- mindcrime 14y ago
  > The problem with B2B is that it doesn't follow the standard startup model Is there even such a thing? Anyway, it's not that VCs don't fund B2B startups... they absolutely do, and there are even firms that specialize in that space (or at least have a heavy focus on it). A16Z, for example, are known for investing heavily into enterprise plays: http://a16z.com/portfolio/portfolio-enterprise-companies/ http://a16z.com/portfolio/portfolio-enterprise-companies/
  - hkmurakami 14y ago
    If there is such a thing as the standard startup model, then I'd argue that it would be the B2B model. The current mold of web/social/mobile/location startups is the exception to the norm in the history of high tech startups.
- btilly 14y ago
  ...doesn't follow the standard startup model. Remember, the standard startup model is, "Fail." Anything you can do to not follow that is good. ;-)
- AlexBlom 14y ago
  I'm unsure this is true anymore. If you know how to play B2B (the same lies true for B2C), it's entirely plausible to get the first 1-5 deals pre-build (I did). If you consider that equal to the first traction burst in B2C, then I'd argue that the ambiguity for B2C is just as large, if not larger, in the early days. It is my no means an overall risk / reward inflection point (and if you are referring to 'this company is guaranteed to exit' I agree), but as an early 'this might have something' B2B can validate fast.

mindcrime 14y ago

Good stuff, and I agree with almost 100% of that. The only thing I take exception to is the (seemingly) implicit suggestion that "sexy" is defined by what college kids like: And that’s true. B2B is unsexy in that I don’t build things that my college friends want to use. Nah... if you're doing sexy technology, it's sexy even if not a single college kid has ever heard of it. I'd encourage everyone to NOT buy into the HN echo chamber mentality... there is a LOT more to the business world than consumer facing geo-local-social-mobile-photo-sharing-cat-picture startups. Do cool shit that solves problems for people, charge for it, and make money... that's not a half-bad formula. (disclosure: I'm a founder of a very sexy B2B enterprise software startup).

dshipper 14y ago
I agree with your point. I based my definition of sexy on what tends to get media coverage - which are generally ideas that college kids want to use. But I certainly agree that sexy companies exist that no college kid has ever heard of.
hkmurakami 14y ago
Wholeheartedly agreed. My reaction to the headline was: "What!? B2B is awesome! It's REAL!"
- bpatrianakos 14y ago
  I think you nailed it in the least amount of words. You're right, it's real! B2C has become the land of also-rans. It's the same old, same old but this time with a new interface, a special niche, and so on but in the end it's all the same app with a different logo each time. B2B solves problems that make it easier for customers to solve another problem. They're real tools that create real value as well as wealth for its customers. That's probably why B2B pays while consumer focused startups have a hell of a hard time monetizing. If I had to pay for Facebook I'd say fuck it and use the phome which I already pay for. If Quickbooks started free then asked me to pay I'd pony up because it not only saves me time and the monetary value of my time but it also saves me on hiring someone to do the work Quickbooks does for less. That's a real problem. Another example happened to me just today. I'm heading up a project to start A/B testing our marketing efforts where I work. Right now I signed us up for a free Mixpanel account that I'm using to kind of start showing the team hard numbers before actually buying anything. This morning I had a meeting with someone from Optimizely which actually does exactly (literally exactly) what we want to do better than Mixpanel. I was shown how the service works and got a nice run through and at the end of the meeting I was dying to buy their platinum plan because of how much time it would save me personally, how much money it would save our company, and also for what the product itself does. My point here is that you don't see that in the B2C space. Most users would complain if a Facebook disappeared overnight but they sure as hell wouldn't whip out their wallets to keep it alive like B2B customers do when they like a service.

jsiarto 14y ago

We're a B2B shop and have been profitable from day one. Sometimes it takes a while to get paid from the big guys, but once you're in, cash flow is great. There are some downsides (control, last minute BS, corporate things)--but it seems to be easier to get companies to part with their cash than your neighbor or suite-mate.

jacques_chester 14y ago
The secret to B2B is that it's almost never somebody's actual personal money. If I as the manager approve the $5000 WooFiz 7 Platinum purchase, I might feel a some concern to ensure that the ROI is defensible. But that's it. Because it's not my money. If WooFiz turns out to be junk ... well, that sucks. But I'm not personally out of pocket.

vkatluri 14y ago

How does one enter the B2B market? Does B2B mean you're solving how two companies do business with each other?

mindcrime 14y ago
> How does one enter the B2B market? Create a product that solves a need that businesses have and sell it to them. Steve Blank's The Four Steps To The Epiphany is a great resource that is heavily focused on the B2B world. > Does B2B mean you're solving how two companies do business with each other? No, it just means that your business ("B") is selling "2" other businesses ("B"). So, when IBM sells WebSphere AS to other businesses, that's a B2B market. B2C, conversely, is when you sell something to consumers. So, Wal-Mart is mainly B2C. The lines aren't always clear, and there are other models that don't quite fit either definition.
- SudarshanP 14y ago
  Thanks for that clarification. I too was under the wrong idea that B2B were somehow guys involved in connecting businesses to each other though their solutions. So B2B and enterprise software are the same? Does 37signals/Tello count as B2B or B2C?
  - hkmurakami 14y ago
    Enterprise Software is a subset of "B2B". B2B encompasses any business that sells products and services to other businesses. The universe spans Alcoa (the world's largest aluminum producer) to Oracle (perhaps the world's most evil software producer).

pnathan 14y ago

Well put. No one has heard of the company I work for, and we do some seriously cool B2B stuff. We're 100% employee owned and are #1 in certain segments of our customers. No, we're not "sexy", we're not media darlings, and "social media" is really not in our genes. But our products are really awesome. :-)

philwelch 14y ago
You also have a rack of exotic blue hardware at every engineer's desk, can't complain with that.
- spitfire 14y ago
  SGI still exists? What are you talking about?
  - pnathan 14y ago
    We both used to work at the same company. It makes custom hardware. The company's "preferred" color is blue. Hence, blue boxes at every engineer's desk.
    - spitfire 14y ago
      So what's the company?
- pnathan 14y ago
  Yeah, that's an unusual dimension it's fun to learn about - don't get that everywhere.

rodolphoarruda 14y ago

Lots of Jason Fried's influence in the subconscious, I should say. Two or three segments seem to be extracted verbatim from 'Getting Real' book. Nice text, congrats.

dshipper 14y ago
It's funny I've never read that book but love Jason Fried. Thanks for the comment :)

codexon 14y ago

The huge advantage of B2B is that businesses get to write off your payment as an expense, so they are much more likely to pay you more.

bdunn 14y ago

I wouldn't ever consider building a product for consumers. Why? * Businesses are used to paying for services. * Businesses can typically make judgements about the ROI of software (X saves Maggie 5 hours a week. That translates to $200 in pay. Sure, $100/mo is worth it.) Consumers can't. * Businesses pay thousands of dollars a month for each person on staff. If you can eliminate the need for a position, a business will probably willingly pay 3 to 4 figures for your software.

karamazov 14y ago
I've never heard the term '3 figures' before :)
- StavrosK 14y ago
  Do you mean you haven't heard "three", or "figures"? Because you've definitely heard "six figures".
  - hkmurakami 14y ago
    One of those cases where you've heard "three" and "figures" but not "three figures" :P (I've probably heard it used only a few times in my life)
    - StavrosK 14y ago
      Oh, right. Same here, come to think of it. I wonder what other cliche phrases we can ruin.
- bdunn 14y ago
  As in $XXX or $XXXX I'm also so focused on subscription revenue that I forgot to clarify that. Get a few $XXXX/month businesses and you'll have six figure annual revenue before you know it.

nbashaw 14y ago

My response: http://nbashaw.com/post/28654441223/consumer-internet-isnt-dead http://nbashaw.com/post/28654441223/consumer-internet-isnt-d... In a nutshell, I think there's still a lot of value in creating web and mobile apps for consumers, it's just that there's been a glut in the market, especially for mobile. Too many apps that aren't very differentiated. In the long run I still think consumer is a good play, though.

deleted 14y ago

[deleted]

diminium 14y ago

This feels like deja vu. I asked a similar question in http://news.ycombinator.com/item?id=4182993 http://news.ycombinator.com/item?id=4182993 B2B is also very dysfunctional. You almost have to operate in a different reality to survive there. diskdoctor answered with "Marketing and selling software to enterprises is the most dysfunctional cycle of decision making you will ever see in business. In almost all cases the individuals in the business who actually derive value from the technology are entirely disconnected from those who make the purchasing decisions. Many times those purchasing decisions are made based on "perceived" synergies with other software systems already owned from the same vendor, having never been vetted by the actually consumer in the business." This is probably the biggest difficulty in B2B. Steve Jobs even said something similar "What I love about the consumer market, that I always hated about the enterprise market, is that we come up with a product, we try to tell everybody about it, and every person votes for themselves. They go ‘yes’ or ‘no,’ and if enough of them say ‘yes,’ we get to come to work tomorrow. That’s how it works. It’s really simple. With the enterprise market, it’s not so simple. The people that use the products don’t decide for themselves, and the people that make those decisions sometimes are confused. We love just trying to make the best products in the world for people and having them tell us by how they vote with their wallets whether we’re on track or not.”

paulsutter 14y ago
Dropbox found a way around that. It's heavily used within corporations, but the adoption decision gets made by each individual acting alone. Ping Li has an excellent paper on this: http://www.accel.com/assets/resources/files/17/original_renaissance_of_business_software.pdf http://www.accel.com/assets/resources/files/17/original_rena...
- theatrus2 14y ago
  Apple and Dropbox are both successful in the "enterprise" (and more so in the small business) because of this. They didn't sell to the company, they sold to the users and employees.
bmelton 14y ago
That's a poignant quote, and also one of the biggest pain points in selling to enterprise / federal customers. The less spoken, easier way around is to target smaller companies. The people making the decisions have more direct influence on the purchase, and are also a lot more likely to be involved in the actual use of the software. This has worked out well for FogCreek, 37Signals, et al.

eli 14y ago

I'm doing an ad-supported B2B media startup now. So that's doubly unsexy since free ad-supported media is not a very trendy business model right now. But it works because we understand our market, we understand marketers, and we've had a dedicated sales staff since day 1. You can make a lot of money with ads if you don't treat them as an afterthought.

dgudkov 14y ago

>The biggest opportunities probably aren’t in social anymore Economy struggles because there almost no new ways to increase labor productivity further. Making business tools more collaborative and social may boost labor productivity to next level. It's too early to dismiss social completely even if it's hit glass ceiling in B2C market.

malkia 14y ago

What's B2B?

andrewflnr 14y ago
Business to business.

robwhitley 14y ago

B2B = better to bet for VCs in the coming years.

j45 14y ago

This article speaks to a point that most miss: The business model can be as sexy, or sexier than the idea itself. When we build something that is boring to some, I wonder if we forget the magic of what we do. What is boring to us is magic to someone, stuck suffering with managing details. It's nice to see the maturation of developers who do for the world what's being asked of us: help everyone everywhere, with software. About B2C or B2B: 1) It's a preference. A reality is, there is not as much B2C out there as we think. Too many consumer facing "successes" do not take money from "customers". Why? The users are the product that are sold to advertisers. They often ask businesses to pay, maybe by advertising, and it's a lot of work. 2) Consumers are quite fickle, irrational and emotional decision makers. They will often think about any decision over $5/month. Small businesses, on the other hand, don't think about $50/month too much. They're fairly logical (a good fit for developer's tendencies), and very much understand and make decisions based on value -- saving them, or making them money. They'll also be more forgiving about understanding features-based marketing instead of benefit-based marketing if you can't dial in your copywriting. In short, there's more flexibility to learn and still do well enough to keep improving. 3) If you let a sliver of your talent tackle a B2B problem that customers will pay for, you get to keep the panacea much easier: Work on what you want every day without fear of paying the bills, or pursuing a swing for the fences idea without fear of failure or running out of money. Not everyone gets to live in the Valley. I'm sure I'd be open to other possibilities if I lived there, but I don't right now. If you're out for the first success or two of your life, consider this: check any ego and immature thought habits to fit in. Exchange them with discipline, to learn what you need to about the fundamentals of building a business, it will serve you very well when going after the B2C ideas. Almost everyone who tries to fit in, inevitably gets left behind. Do what others aren't willing to do to build a business that makes money, because it's worth way more, to customers, and VC's. As every single person on HN gets older, they will have more responsibilities because of the other things in their lives they want, and cost money every month. There's a chance now to address those very easily and get some great business development experience. That doesn't sound like much to some, but startups are a longer haul game than anyone ever admits.

the_cat_kittles 14y ago
william carlos williams couldn't have said it better

unimpressive 14y ago

To me, a sexy business is one that helps people and makes money. By this definition the majority of social startups are as unsexy as possible.

rickmb 14y ago

There seems to be an odd notion that B2B must be about accounting and such. Most B2B stuff I've been involved with the past few years has all been "social". Because, like soylent green, companies mostly consist of people...

pilif 14y ago

We're working since 2001 on a b2b software. While it might seem boring, it's not in the least (minus some rare low points, but you get these everywhere). It's also very rewarding to see users be productive with the software and be grateful for making their lives easier. In fact, many of the end users are to this day computer illiterates and making great software they can use is a very interesting challenge. Also the technical stuff. Just because it's b2b doesn't mean you can't make it interesting for you. Whatever new technology comes around, I make it a point to try it out and apply it in production where it helps. We've done AJAX before it was called that. We've been running node.js since the 0.2 days and we've solved interesting scaling problems. There is nothing we can't do that makers of consumer products can do. The difference is that we are getting paid handsomely ever since and that we don't have to deal with advertisers or, god forbid, VCs. Thanks mainly to our product Switzerland was and still is one of the countries with the highest percentage of electronic orders among dentists (I only have numbers there. The restaurants numbers might be even bigger). Combine that with the cool technical challenges to solve and you are left with a very interesting job that just never gets old.

jacques_chester 14y ago
I agree that solving people's pain points is one of the best parts of doing enterprise-y stuff.

DRMacIver 14y ago

So I've done a B2B company before and am doing one now (current place isn't intrinsically B2B but that's our main focus. It's certainly not something normal consumers would use). I think this understates what incredibly hard work selling B2B can be. Large companies will pay you a lot of money, but are ridiculously high maintenance - they expect custom work on your product (often of the "Can you integrate it into our ActiveDirectory/Exchange/etc" form) and the sales process to them is incredibly long. Small companies on the other hand are often strapped for cash and have weirdly distorted views of the value of their time - If what you're selling them is something they can "do now" by spending 3 hours of an employee per day it can make it very hard to convince them to pay you at a rate you'll be able to sustain a profit on. Neither of these are impossible to overcome of course. People can and do do extremely well with B2B businesses. I just want to point out that there are real problems with selling B2B as well, and that it's not nearly as easy as it might sound.