5 Ways B2B Software Is Bringing The Sexy Back

A recent Inc. article titled, Why B2B Startups Are Suddenly So Sexy, declared that B2B software companies are finally being seen as sexy by some investors. That’s all well and good. However, the biggest issue has never been investors failing to perceive the allure of a meaty B2B solution. Afterall, great B2B companies tend to generate revenue before a major round of funding anyway!

The real problem is that people looking to start a B2B company and people who have already started one don’t think they themselves are sexy. They look longingly at their B2C comrades. Their Twitter followings are in the thousands. They are getting covered on all of the major tech sites. Their blogs are littered with comments. Every slight tweak to the app is met with praise from the young and hip around the world.

B2B software companies would probably describe their company as producing something useful, practical, and better than what is currently being used. But definitely not sexy.

Well fellow B2B software companies and those aspiring to join the ranks, I am going to help you hold your head up a little higher around those boastful B2C’s!

5 Facts To Remind You B2B Software Is Sexy

There is an entire company behind the praise

It is tempting to be jealous of all the public affection that is showered upon the B2C’s of the world. As B2B software companies, you have to settle with a few sincere thank yous from the tens or maybe hundreds of organizations you serve. Just remind yourself that for every thank you coming your way are a number of unspoken thank yous from employees that you don’t get to speak to.

Also remember that you are serving very busy people. Even if they really value your product, they just might not get around to praising you. If they continue to use your product and pay – take that as your thank you.

Look further down the line to find meaning

You may find that it’s difficult to find the “sexy” within your product alone. Instead, take a look at the work your product enables your customers to do. Without you, they wouldn’t be able to do what they do, or at least not as well. Don’t take all of the credit, but take a little for yourself. Rejoice in the success of you customers for a small part of it is yours.

At Decision.io we help foundations, non-profits, business incubators and accelerators, and companies manage their online submission and decision-making process. It’s not what the cool kids are talking about. It’s not exactly Snapchat. Mark Zuckerberg probably isn’t knocking on our door and begging us to sell the company to him for $3B - a small price to pay to be hip with the in crowd after all.

However, when I went around to speak to some of our early and most valued users, I was reminded of the great work we B2B’s enable.

Mike Kirkup, Director of VeloCity at the University of Waterloo, told me how Decision.io helps them choose the lucky startups that receive $25 000 in funding and a spot within the incubator based on their business plan and pitch. We help their review team collaborate and make better decisions faster.

Jennifer King, Executive Director of the Social Venture Partners of Waterloo Region, spoke about how Decision.io helped them get off of a disorganized paper-based grant application review process, and actually made the grant review process enjoyable! Imagine that.

We are helping incubators and accelerators choose today’s entrepreneurs that will shape tomorrow’s future. We’re helping organizations distribute their funds to projects that will have the largest impact on their communities. We’re even helping companies make important decisions such as what to build next! Pretty heavy stuff.

I am sure that if you think a little harder, you will see that your B2B company is indirectly impacting the world in some pretty awesome ways!

You make people’s work less painful

Many people hate their jobs. If they don’t hate it, they tolerate it. Few people love it. We spend a third of our lives sleeping, a third working, and the other third getting ready for work, driving to work, and thinking about work. A slight exaggeration, but you know what I mean. Your B2B products are helping people through the most difficult, stressful, and longest part of their days. Some days, they will spend more time with your software than with their own families.

Unsexy? Give me a break!

B2B software companies make money early on

Most of those sexy B2C companies that brag about millions of users aren’t bragging about having millions or even thousands of dollars coming in. In fact, they are smiling on the outside and panicking on the inside while trying to think up brilliant ways to turn on the monetization machine without turning off their users. Instagram recently served up its first ad, and you can guess how that went.

B2B companies are producing something so valuable that companies want to pay out of their pockets for it. By using your product they get more work done and they do it better. That equates to more dollars, cents, and impact for your users.

How much would you pay out of pocket to use Instagram? I wouldn’t pay a dime either.

More revenue per customer

A new user can mean thousands of dollars a year. You can be Ramen profitable with a couple dozen paying customers or less. That is Paul Graham’s terminology for bringing in enough revenue to cover living expenses for the company’s founders.

Also, your revenue is probably a little more stable. Most B2C companies are just a slightly better idea away from being obsolete. Consumers can be a fickle bunch. It is much harder to switch to a new B2B software product once your business is heavily invested in one. That’s why we see so many organizations using terrible software that needs to be replaced! That’s where you come in, right?

Add this with the fact that B2B sales and marketing is looking more like B2C, and you have the potential to see B2B style revenue without being so hands on!

Key take aways

  • For every paying customer and thank you, imagine the many faces behind each kind gesture that are using and enjoying your creation.
  • Focus on what your product allows your users to do better and take a tiny bit of their success and claim it as your own.
  • Realize that most people spend the majority of their waking life working, and you make that time easier and more delightful.
  • While your B2C friends are shaking at the thought of unleashing an ugly monetization beast on their trusting users, your customers expect to pay and are glad to do so.
  • A sale for you is reason enough to celebrate. That sale could mean hundreds or thousands of dollars and a loyal new user.

There you have it my B2B friends. Hold your heads high. We aren’t loud. We don’t tend to garner a lot of attention. But make no mistake about it – we are most definitely sexy.

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  • Doug

    All good points. Being B2B veteran and in transition right now, I am looking at opportunities in both B2B and B2C. I think all of us in B2B recognized the tides were changing probably more than 5 years ago. However I must say, like many B2B sales cycle this process it taking much longer than I would have hoped. Enterprise 2.0 came and went with a little sputter and most people cite SalesForce.com as success to the new wave of B2B companies. I would argue that SDFC product is marginally better than the old-school products they produce, and they are running their profitability like a B2C company.

    Companies like IBM, SAP, and Oracle continue to thrive with traditional models; gooble up start-ups that start to make traction, only to stiffen innovation, with the “same old” model. It really feels like a marathon, with no specific turning or inflection point. It might be another 8-10 years before we see B2B model truly change as a whole across entire the vendor/customer chain.

    • Decision.io

      Hi Doug, thanks for chiming in!

      Your point about the B2B sales cycle taking too long is bang on. I think the key here is putting easy to digest educational content in your potential customer’s hands early on. A common statistic thrown around is that B2B customers have generally done 60% of the work before they even want to speak to you. Ensuring that a lot of that research is on your solution and not competitors is key. While this may or may not speed up the process of moving from awareness to actually purchasing, it probably does reduce the man hours spend to gain a new customer as much of the education can be fairly hands off via blog posts, email campaigns, videos etc.

      I also love your reference to the big companies that buy us little guys out and then suffocate our creativity and innovative spirits! I think that’s a case of large corporations being able to acquire startups for what amounts to chump change for them but life changing money for the startup cofounders. I do hope we see more small companies sticking it to the big boys and trying to be the next IBM, SAP, etc.

      Do you think Google does a better job of acquisition without stifling innovation? They seem to do a better job of acquiring companies and then providing those cofounders with Google like resources to do even bigger things. This method is right on par with the main message in the “Innovator’s Dilemma” by Clayton Christensen.

      Just curious… how do you hope the B2B model changes down the road?

      • Doug

        The one point that I would echo above is in the acquisition scenario…the cofounders indeed walk away handsomely. In fact, I’ve worked for two B2B startups one was acquired by IBM and another was acquired by another Fortune 500 tech company. As an employee, I did not fare so well, even at a relatively senior level. That said, gone are the days with the exception of maybe a handful of tech companies (B2B or B2C) that produce hundreds of millionaires, including the secretaries.

        And actually, since the big companies do such a bad job integrating the new approaches and good job in stifling innovation many of these same startup founders come back 2-3 years later (after the non-compete ends) and starts up another company doing the exact same thing as before! Giving them another chance to cash in. Again all great for the founders, but I believe this has delayed and slowed down the pace of innovation in B2B.

        I think in B2B to certain extent, the buying process has been even so marginally democratize insofar that it’s not just the CIO now, but department heads and CMOs are now more involved in the process. And it will hopefully continue to improve as time passes. That said, these are still all senior check writers who are usually many levels removed from the actual users of the products/services. People state DropBox as a democratized B2B success story, and to a certain extent it is, but only as it caters to a generic need to store and access your data readily and as a result is also a great B2C service. Most B2B companies focus on a more specific niche with an handful of ultimate decisions makers (CIO or not), and would not see the level of user adoption and support compared to a service like Dropbox.

        As for B2C companies like Google, Yes, I do think they have done a better job with their acquisitions, just thinking of Android and YouTube alone have paid dividends for both consumers and Google.

        • Decision.io

          Between our exchange we have already written another post! Stick around Doug, your input is definitely valued here!