B2B is unsexy, and I know it

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When I tell people I do B2B software I get some very interesting reactions.

“Why do B2B? It’s so unsexy.”

And that’s true. B2B is unsexy in that I don’t build things that my college friends want to use. But that doesn’t mean it’s unsatisfying, or somehow inherently less valuable than a social/consumer product. In fact, I’d argue that the opposite is true. Spending every day making someone’s life easier is awesome. Especially when that someone actually wants to pay you for it. 

So here are a few reasons why I do B2B:

Nobody ever went out of business making a profit

If you truly solve a business’s problems they’ll want to pay you for it. If you solve a consumer’s problems, in many cases, they need to be dragged kicking and screaming to open their wallets. Writing B2B software makes it easier to make money from day one. That means that it’s much more likely to generate a sustainable revenue stream than a social product which requires massive scale.

You don’t need to win the lottery to succeed

The kind of scale required to generate a real return from a social product is pretty staggering. And certainly skill, experience and an understanding of social dynamics plays a large part in a company’s ability to reach scale with a social product. But as far as I can tell, luck also plays a large part in creating something viral and sticky enough to succeed.

When we built WhereMyFriends.Be we had some idea that it would be a cool product. But the real reason it blew up probably had little to do with our incredible entrepreneurial foresight. We got lucky enough to hit on a small product that resonated with people, and a Mashable writer happened to like the sound of it.

We’ve had about 50,000 signups so far, but other than that very little to show for it except a sizeable hosting bill.

B2B requires no voodoo or midnight incantations

Chris Dixon and others have commented that B2B entrepreneurs seem to be much more likely to string together successful companies than other types of founders. I think that’s because there’s a lot less voodoo involved in creating a successful B2B software business than a social one.

Like everything else, it’s hard as hell. But it’s a problem that you can get your arms around and pin down. If you only need 10, 100 or 1000 customers to generate a small profit, it makes things a lot easier than needing 1 million.

“Are you making something that solves a problem for a business?”

“How do you sell it to them in a scalable way?”

“Who’s making the buying decision on this problem within the organizations we’re trying to target? Is it the same person who’s experiencing pain?”

“How long does the sales process take?”

Those are some questions you get to ask yourself when you’re building software for businesses. When you’re building a social product it’s a little less clear how to proceed. Most people I know end up building their product and hoping to get covered in Techcrunch or Mashable so they can go viral.

As my dad would say: hope is not a plan.

The biggest opportunities probably aren’t in social anymore

There are only so many different types of location-based, photo-sharing apps that can be built. Certainly, the unprecedented amount of data being generated by social products brings with it huge opportunities for future businesses, but the vanilla “share more easily with your friends” social model seems to be rather played out.

None of this is to say that building social products is inherently a bad idea, or that social products aren’t valuable. It’s just a small explanation for why, as a college-age entrepreneur, I’ve chosen to go down a different route.

My name is Dan Shipper, I’m a junior at UPenn, and this is my blog. Follow me on Twitter at @danshipper. Or check out my (B2B) startup Firefly.

3 Aug 2012, 7:57pm | 16 comments


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