Focus on B2B

B2B encompasses all companies that create products and services geared toward other businesses compared to B2C (“business-to-consumer”), which serves individual consumers directly. There are also more complex forms, such as B2B2C: OpenTable is a good example of that — they help restaurants (the 2nd B) to serve consumers.

Note that for StartUps or even ScaleUp companies, this means that their customers are typically 100x or even 1,000x larger than them. It’s easy to imagine how this imbalance brings challenging situations, e.g., during discussions or negotiations.

Some aspects will also apply to B2C products, but there are several significant and important differences:

Maybe the most important aspect in B2B is that typically buyers aren’t users:

Still, all these groups have needs that must be met, including the strategic impact that the project sponsor dreams of and the simplicity and efficiency that users demand.

To keep all groups happy, their needs must be addressed during Product Discovery. It’s also helpful to have regular alignment product sessions and organize Customer Advisory Boards and similar co-development activities.

While single users of a B2C app are quite willing to just try new things, most businesses have a strong tendency to avoid risks and have a rather low-risk tolerance. They prioritize safety and business continuity over potential chances for new markets or game-changing technology.

Sales in B2C is often very quick, direct, and low-budget. The buyer is also the user, it’s often an easy and low-risk decision, ideally even with a plan that allows free trials or otherwise short cancellation periods.

What’s more, typical B2B products require deep integration with other tools, such as the existing ERP, CRM, or HR systems. Interfaces to these must be provided. Also, in enterprises, many stakeholders and gatekeepers care about aspects such as compliance with official obligations as well as company policies, security in terms of IT as well as security of their investment, integration aspects, operations, SLAs, etc. In other words, while consumers quickly buy products by paying via their personal PayPal account:

Consequently, B2B customers beyond the current feature set often also want to know about the provider's strategy and future plans. Public roadmaps, when communicated wisely and shared with care, turn out to be highly useful.

Product-led growth is a major trend, originating from B2C, but more and more is also being applied to B2B.

While utilizing the product itself as the primary vehicle to acquire, activate, and retain customers is desirable, in most B2B settings, a well-educated and skilled direct Sales team is required. This team must follow the above-sketched process, build relationships with customers, and create an extensive network inside and outside these organizations. Ideally, this Sales team can even guide customers in optimizing their business processes and maximizing value.

In B2C, based on market segments and cohorts, a unified feature set can easily be derived, and the impact of building or not building that feature can be determined much quicker — see above. But because enterprises are so big and relatively few of them, there will always be just this one simple thing that they are asking for to ink the deal. Such a single request may crush every roadmap, and the more often such requests are accepted, the more the entire product strategy is at risk. In extreme cases, the business changes from a product to a professional service business. To avoid this, sharing the product vision and strategy with sales and customers is mission-critical. And to still serve these special requests, reserving some team capacity to ensure it is still provided in line with product principles might be a good idea.

In B2C, there is usually a vast number of users, so the value of a single individual is pretty low. In Enterprise B2B, however, there might only be a relatively small number of users paying significant bills. The bigger these enterprises are, the more demanding they might be. Expectations are much higher that their specific needs are met, and while Product Management will only be able to serve some of their needs, they also can’t just say no to everything.

Product Management should provide transparency on strategy and roadmap. Furthermore, collaboration should shift from customers demanding features to partners giving feedback and the product team providing guidance on achieving business objectives. Again, that requires domain expertise and thought leadership.

Having relatively few users in B2B also means that running experiments, interviewing users, and involving them in Product Discovery might become a challenge because they are getting involved too much, and there is some fatigue. Even worse, these users generally don’t like change. So, even a change for the better might initially be unwanted. To handle these situations, Product Management and the User Research team should build solid relationships with individual users and also offer them some benefits, such as involvement in early access or beta programs.

In B2C, Product-Market Fit is usually determined based on active users and growth rates.

Similarly, there is a risk that the company was lucky to find a visionary and early adopter who sponsors the product without really catching a more significant market (see Crossing the Chasm). To overcome that situation, Product Management must always focus on the bigger market, on winning more customers — rather than only increasing the satisfaction of the few existing customers.

In B2C, there are many potential users, network effects can be exploited easily, many problems are easy to understand, and the single individual user is less relevant. For example, popular services and apps often have hundreds of millions of users. As a consequence, so-called A/B testing is both easy and meaningful.

By contrast, in B2B, there are fewer users with typically more specific problems that might require domain expertise. Also, every single user might be a valuable stakeholder or decision-maker.