1/ In B2C, you have to ride a massive wave to become a success. This is more than just being good at building a company: you also have to be very lucky. Google, FB and Twitter all rode massive waves.
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2/ B2B, however, is in your own control. The problems are known. You can just ask businesses what their problems are and make products to solve them.
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3/ Consumers aren’t able to tell you what they’ll want, which makes B2C products a shot in the dark. Look at Snapstreaks. A customer would never have said, “I want to be notified of how many days in a row I’ve messaged my friends so I can try to keep the streak alive.”
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4/ The parameters for enterprises (B2B) are much more straightforward. A B2B customer has two questions: a) Does this solution actually solve my problem? b) Is it an important enough solution that I will pay for it?
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5/ In B2C, it is hard to know if things are working. For consumers, you could create a product that’s a massive hit one day and fizzles out the next.
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6/ With B2B, you have a clear execution path. You don’t have to mess around with virality. There are known ways to execute on marketing, sales, and integration engineering, which is why lots of enterprise startups have the same team structures despite selling different products.
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7/ I expanded on this in much greater detail on the Atrium blog:https://www.atrium.co/blog/b2b-vs-b2c/ …
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Any positives in B2C over B2B in your mind? One I have noticed is consumers are more directly product driven and your learning cycle is shorter (deploy -> a/b test). Good B2B sales can drive bad incumbent products for a long time.
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Positive on B2C: Outcomes are biggest in consumer at the head of the tail. Re second point, I think people underweight the importance of distribution in both consumer and B2B.
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Great insights Justin! One major positive for B2C, Don’t you think has also been Speed at which it scales and its Acceleration (in addition to the Scaling potential) which in a VC model makes it just so easy to load bets on ideas that work and cut lose that don’t?
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Also, in a trad offline model, B2C models preferred for higher Margins (brand/ pricing power) comp to B2B , often pointed out by W Buffett eg a CPG company vs a foodservice distrib. But in online model so far, costs of acquisition and scaling have quite flipped that advantage.
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Rationale purchasing decisions are far less existent as you climb the Enterprise. Convincing customers becomes more of a function of combating internal politics vs timing/product req. It requires complex positioning & salesmenship to win. The grass is always greener. Good luck!
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B2B is more process-driven, and B2C is more hits-driven. Process can be boring and unsexy but you have much more control and influence. B2B FTW.
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unless you're selling to SMBs..in which case it's a B2C model with a B2B sales cycle
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Well said. There's some strange dynamics in it. Small to Medium companies are great to work but micro and local business is really a B2C model masked as B2B
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I say it in my marketing class all the time. Turn B2C ideas into B2B businesses.
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I'd posit that B2B should be turned into B2C in two ways: - Meticulous measuring and telemetry. ("We only have 5 users how can we measure?" = 1st Excuse) - Relentless focus on experience ("Our users can attend training and they have SEs" = 2nd Excuse)
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Thanks
@justinkan for sharing this thread.@foursquare we have had a similar journey, B2B has grown to 98%+ of our revenue, enabling thousands of devs and brands with geo tools. One advantage of starting B2C is we had a proving ground and showcase for what works for users. -
This is super interesting. Over what time did it rise to 98%? Curious to know how gradual that was.
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D2C was 100% until mid-2014, and the evolution happened over 2 years with the fast growth of our Places developer tools, Attribution, Pinpoint for programmatic ad planning and targeting, and Analytics. More herehttps://medium.com/foursquare-direct/foursquares-third-consecutive-year-of-50-revenue-growth-or-better-adfca92d733 …
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Thanks Jeff! Really impressive
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