Alex Tyagulsky for the first ProductTank Odessa with the talk “What you need to know before starting B2B product”.
We discuss:
- Vertical and Horizontal B2B products
- Differences between B2B and Enterprise products
- What is MVP for B2B startup?
3. 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.
4. Vertical B2B Products
• Plangrid - construction blueprint software
• TigerText - secure messaging for doctors
• Uclon - software for managing taxi fleets
5. Horizontal B2B Products
• Fluix - mobile document management system
• Salesforce - CRM
• Marketo - marketing automation software
• Slack - team messaging
6. 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
7. 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)
8. Vertical or Horizontal?
Vertical products have much higher chances of success
Horizontal products provide bigger rewards coupled with
high risks
10. 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)
11. 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)
12. Additional Product
Requirements
• B2b level - solves the problem
• B2B level - better administrative controls
• Enterprise level - complete administration, compliance
and sometimes on-premises installation
14. 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.
15. 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.
16.
17. 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 :)
18. 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 …
19. 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 :)