What you need to know before starting B2B product

What you need to know before starting B2B productAlex Tyagulsky, Readdle co-founder

Vertical and Horizontal B2B Products

Vertical and Horizontal B2B Products

Vertical products aimed at addressing the needs of any given business within specific industry. They focus on customer needs.

Horizontal products solve one and the same problem for the customers from different industries. They focus on a problem.

Vertical B2B Products

• Plangrid - construction blueprint software

• TigerText - secure messaging for doctors

• Uclon - software for managing taxi fleets

Horizontal B2B Products

• Fluix - mobile document management system

• Salesforce - CRM

• Marketo - marketing automation software

• Slack - team messaging

Benefits of Vertical Products

• It's easier to find customers

• You can acquire deep expertise in customer needs

• Decision making process is the same across customer base.

• Easier to get to critical mass of customers and build brand

Benefits of Horizontal Products

• Bigger addressable market and scale if it succeed

• More diverse customer base results in better solution for customer problem (sometimes even in vertical markets)

Vertical or Horizontal?

Vertical products have much higher chances of success

Horizontal products provide bigger rewards coupled with high risks

B2b, B2B and EnterpriseProducts

B2b, B2B and Enterprise Products

• B2b customers - small companies or small groups of people within larger companies (5-20 people)

• B2B customers - medium businesses or divisions of larger companies (100-500 people)

• Enterprise customers - large companies or divisions of really big companies (1000+ people)

Sales Process is Different

• B2b product - self-served or very lightweight sales process (1-4 weeks sales cycle)

• B2B product - traditional sales process (1-3 month to close the deal)

• Enterprise product - often sold on a C-level or at least need C level approval (6+ month to sell)

Additional Product Requirements

• B2b level - solves the problem

• B2B level - better administrative controls

• Enterprise level - complete administration, compliance and sometimes on-premises installation

MVP for a B2B Product

What is MVP?

A minimum viable product (MVP) is a product with just enough features to satisfy early customers, and to provide feedback for future product development.

What is MVP for B2B Product?

MVP for B2B product solves at least one customer problem considerably better than status quo and has promise for more.

Benefit > Switching Cost

• Switching cost in B2B could be very high. Your MVP should justify it.

• Early adopters might be hard to find

• Try to express benefit of your product through clear monetary value

• It helps if they hate status quo :)

What About MVP Quality?

• Quality is essential if there is a reliable alternative (Fluix)

• Quality is not critical if product is enabler of something new (Hubspot)

• In most cases it depends …

Other MVP Tips

• Do Customer Discovery. Get really good understanding of the problem your MVP is going to solve.

• User and Buyer in B2B are not the same. Keep that in mind.

• Sometime there is no MVP :)

Questions?