New York City will host its first business-to-business (B2B) themed Startup Weekend event on May 15-17, sponsored by Intuit. In preparation for this event, we gathered a panel of experts and passionate entrepreneurs at WeWork Fulton Center on April 29th to share inside knowledge and firsthand stories about some of toughest challenges in launching a B2B startup. If you missed the B2B panel event or want to relive the highlights, here is a recap of all the top inside tips and takeaways.
Defining B2B (vs B2C)
At its core, a B2B is a business supplying a service/product to another business. Meredith Wood, Editor-in-Chief at Fundera, highlighted that B2B companies aim to address a real need, whether it is to streamline processes or increase efficiencies, whereas there is more “want” involved in the purchase decision for business-to-consumer (B2C) products. Wood also noted that there is often a larger barrier to entry when starting a B2B company and stressed the importance of market trust, which was echoed by all the panelists. At a B2C level, the purchase decision ultimately affects the one consumer, but at a B2B level, the decision could impact tens, thousands of people, hence the additional barriers and security/privacy concerns.
The panel was quick to address other differences such as pointing out that B2B sales models are completely different and often more complex. For example, the sale of a candy bar to an individual, which only involves the store and the customer, was compared to the licensing of a candy bar which involves a whole team of lawyers and licensing agreements. For a B2C company, the challenge is to spread the product far and wide. Conversely, for B2B companies, Marisa Garcia, Director of Retail Engagement at JOOR, addressed the need to focus on building good relationships that lead to success. She encouraged attendees to identify key players, validating your product, and finding a good market fit.
Wood noted that, unlike working with enterprises, selling to a small business is scarily similar to selling to a consumer and that a lot of B2C platforms, such as Facebook, work great in the B2B space as well. Most small businesses use Facebook and being active on the same platforms as your customers can be helpful for establishing trust with your target audience. In fact, when asked about what category companies such as Etsy, Seamless, and Google fall into, Jeff Ragovin, Managing Partner at Ragovin Ventures and co-founder of Buddy Media, pointed out that there are there is another category, of business-to-business-to-consumer (B2B2C) companies. For example, businesses are increasingly using Seamless to feed their staff, a rare occurrence that blurs the line of the capacities a B2C company can fulfill, usually seen with enterprise platforms.
B2B trends and opportunity
Ragovin declared that the mobile is a huge opportunity for B2B startups. The average person reaches for their phone over 100 times a day and as the mobile landscape evolves, everything is becoming mobile first. More importantly, Google recently announced that they have changed search results to prioritize mobile-friendly websites. The takeaway: in order to disrupt the B2B marketplace, think ‘Mobile First.’
Yves Lawson, Vice President of Technology Strategy for Bank of New York Mellon, noted that the success of apps such as Robin Hood are demonstrating a paradigm shift in a FinTech space that used to be highly specialized for the wealthy. The same tools for wealth management and growth advisors are now available for everyone, impacting the economy on how we see wealth in the future.
Success in the B2B space starts with empathy
Overall, the panel had a lot of great advice for the attendees but all of them stressed the importance of gaining trust and providing great customer service as keys to success in the B2B space. Lawson stated that the B2B companies that stand out from the rest are the ones that go far with relationships and maintain good customer service, even if a companies has messed up or made a mistake.
Garcia highlighted the importance of empathizing with your customers. Her recommendation was to consistently ask yourself, “How can [I] make my customers’ lives easier?” and stressed the power of engaging people in conversations to demonstrate that you really understand the customer’s pain points. After all, “how can an entrepreneur really solve [your customer’s] needs or problems if you don’t feel their pain?” She shared about how a strong understanding of JOOR’s customers helped the company to create a product that consumers are more likely to adopt and find useful.
For Wood, was the most important aspect of a B2B product is how much time it can save businesses. She claimed, “People are willing to spend more if you can save them time. Time is money, as you can convert saved time into monetary value.” She cited that there were products she stopped using because it made more work than the time it saved.
Furthermore, she compared startups to a newborn baby as an analogy to drive home the importance of getting customer validation advising to “let your children go out and play with other people.” She also importance of a great user experience and customer service, getting products in front of early users and acquiring feedback.
Good customer service, networking, and partnerships
All four panelists agreed that knowing your market is the first step in starting in the B2B space, because considerations for working with a small business versus an enterprise company can be a very different experience. For example, Lawson noted that when working with large enterprises, it is helpful to reference competitors or other notable companies who use your product or service.
However, regardless of size, the panel agreed that responsiveness and customer service applies to all B2B companies. Citing how a small blunder could turn into a national headline as seen with airline companies as an example, the panel suggested that establishing a responsive and quality customer service system, by leveraging tools such as Twitter and Zendesk, will not only build trust but also demonstrate credibility that will ultimately win customers. The panel also suggested making the effort to always be reachable and to show that there is accountability to build customer trust.
Ragovin encouraged attendees to keep their networks fresh and emphasized that networking is really a two-way street that is much more fulfilling when you’re willing to “pay it forward.” He urged attendees to think about how they could help others, and noted that people are generally willing to meet when ideas are constantly being exchanged. From a business side, he accentuated the need to focus on providing actual solutions to fix your customer’s problem. If your product is not fixing a problem, there is no need for it and it needs to be reevaluated.
For smaller businesses, Wood shared how partnerships with accountants, or experts in her target market, has helped her to reach her ideal audience, noting that most small business owners will trust their accountant over everyone else. Additionally, working with trade associations is also helpful for reaching small businesses in specific industries.
In closing, Garcia highlighted the power of the network effect of getting your fans and customers to promote your brand for you. She emphasized the impact of word of mouth marketing, which ultimately comes from providing good customer service and satisfaction, bringing us full circle with yet another example of why customer service is key for launching a B2B startup.
Ready to launch the next big B2B idea?
To inspire the audience, each panelist shared a few of their favorite B2B products that they use frequently: Salesforce, FreshBooks, Facebook, Lightspeed, Intuit, and CoSchedule. If you’re ready to launch your next idea that solves a problem that businesses face, come meet some of the panelists and additional NYC based B2B mentors at the next Startup Weekend B2B Edition on May 15- 17. Don’t miss your chance to register! Tickets always sell out.
Heads up: special prizes from our sponsors at Intuit will be offered to the top ideas that incorporate the Intuit API to help small businesses. We encourage you to check out more info on getting started with Intuit Developer by clicking here.
If you have any questions about the upcoming event, please email the organizing team at firstname.lastname@example.org.