How should B2B startups think about growth? Not like B2C

Over the years, we’ve seen a lot of B2B companies apply ineffective demand generation strategies to their startup. If you’re a B2B founder trying to grow your business, this guide is for you.

Rule #1: B2B is not B2C. We are often dealing with considered purchases, multiple stakeholders, long decision cycles, and massive LTVs. These unique attributes matter when developing a growth strategy. We’ll share B2B best practices we’ve employed while working with awesome B2B companies like Zenefits, Crunchbase, Segment, OnDeck, Yelp, Kabbage, Farmers Business Network, and many more. Topics covered include:

  • Descriptions of growth stages you can use to determine your company’s status
  • Tactics for each stage with specific examples
  • Which advertising channels work best
  • Optimization of your ad copy to maximize CTR and conversions
  • Optimization of your sales funnel
  • Measuring the ROI of your advertising spend

We often crack growth for companies that didn’t think it was possible, based on their prior experience with agencies and/or internal resources. There are many misconceptions out there about B2B growth, rooted in the misapplication of B2C strategies and leading to poor performance. Study the differences and you’ll develop a filter for all the advice you get that’s good for one context (ex: B2C) but bad for another (ex: B2B). This guide will get you off on the right foot.

Table of Contents

What growth stage is your B2B startup?

The best growth strategy for your company ultimately depends on whether you’re in an incubation, iteration, or scale stage. One of the most common mistakes we see is a company acting like they’re in the scale phase when they’re actually in the iteration phase. As a result, many of them end up developing inefficient growth strategies that lead to exorbitant monthly ad spends, extraneous acquisition channels, hiring (and later firing) ineffective team members, and de-emphasizing critical customer feedback. There is often an intense pressure to grow, but believing your own hype before it’s real can kill early-stage ventures. Here’s a breakdown of each stage:

designer key details 22

Incubation is when you are building your minimum viable product (MVP). This should be done in close partnership with potential customers to ensure you are solving a real problem with a credible solution. Typically a founder is a voice of the customer, as someone who experienced the problem and sought out the solution s/he is now building. Other times, founders enter a new space and build a panel of prospective buyers to participate in the product development process. The endpoint of this phase is a working MVP.

Iteration is when you have customers using your MVP and you are rapidly improving the product. Success at this stage is rooted in customer insights – both qualitative and quantitative – not marketing excellence. It’s valuable to include in this iterative process customers with whom the founder(s) have no prior relationship. You want to test the product’s appeal, not friends’ willingness to help you out. We want a customer set that is an accurate sample of a much larger population you will later sell to. The endpoint of the iteration phase is product/market fit.

Scale is when you have product/market fit and are trying to grow your customer base. The goal of this phase is to build a portfolio of tactics that maximize market penetration with minimal – or at least profitable – cost. Success is rooted in growing lifetime value through retention and margin, maximizing funnel conversion to efficiently convert leads to customers, and finding repeatable tactics to drive prospective buyers’ awareness and consideration of your product. The endpoint of this phase is ultimately market saturation, leading to the incubation and iteration of new features, customer segments, and geographies.

How do you find B2B customers? 

Here’s a list of B2B customer acquisition tactics we commonly employ and recommend. Later in this article, we’ll connect each channel to the growth stage it’s best used in. This list is generally sorted by early stage to later stage:

1. Leveraging your network. This is particularly valuable for founders who are building a product based on their own past experience.

  • Reach out to old colleagues you know have the same problem you had (and are solving).
  • Leverage the startup ecosystem. If your startup is in YCombinator, for instance, other companies in your batch may be prospects, along with alumni who will take your call simply because of your affiliation.
  • Example: If you’re building an app for marketers, ask past marketing colleagues you’ve worked with to try out your product is a no brainer.

MallforAfrica goes global, Kobo360 and Sokowatch raise VC, France explains its $76M fund

B2B e-commerce company Sokowatch closed a $2 million seed investment led by 4DX Ventures. Others to join the round were Village Global, Lynett Capital, Golden Palm Investments, and Outlierz  Ventures.

The Kenya based company aims to shake up the supply chain market for Africa’s informal retailers.

Sokowatch’s platform connects Africa’s informal retail stores directly to local and multi-national suppliers—such as Unilever and Proctor and Gamble—by digitizing orders, delivery, and payments with the aim of reducing costs and increasing profit margins.

“With both manufacturers and the small shops, we’re becoming the connective layer between them, where previously you had multiple layers of middle-men from distributors, sub-distributors, to wholesalers,” Sokowatch founder and CEO Daniel Yu told TechCrunch.

“The cost of sourcing goods right now…we estimate we’re cutting that cost by about 20 percent [for] these shopkeepers,” he said

“There are millions of informal stores across Africa’s cities selling hundreds of billions worth of consumer goods every year,” said Yu.

These stores can use Sokowatch’s app on mobile phones to buy wares directly from large suppliers, arrange for transport, and make payments online. “Ordering on SMS or Android gets you free delivery of products to your store, on average, in about two hours,” said Yu.

Sokowatch generates revenues by earning “a margin on the goods that we’re selling to shopkeepers,” said Yu. On the supplier side, they also benefit from “aggregating demand…and getting bulk deals on the products that we distribute.”

The company recently launched a line of credit product to extend working capital loans to platform clients. With the $2 million round, Sokowatch—which currently operates in Kenya and Tanzania—plans to “expand to new markets in East Africa, as well as pilot additional value add services to the shops,” said Yu.

MallforAfrica and DHL launched MarketPlaceAfrica.com: a global e-commerce site for select African artisans to sell wares to buyers in any of DHL’s 220 delivery countries.

The site will prioritize fashion items — clothing, bags, jewelry, footwear and personal care — and crafts, such as pictures and carvings. MallforAfrica is vetting sellers for MarketPlace Africa online and through the Africa Made Product Standards association (AMPS), to verify made-in-Africa status and merchandise quality.

“We’re starting off in Nigeria and then we’ll open in Kenya, Rwanda and the rest of Africa, utilizing DHL’s massive network,” MallforAfrica CEO Chris Folayan told TechCrunch about where the goods will be sourced. “People all around the world can buy from African artisans online, that’s the goal,” Folayan told TechCrunch.

Current listed designer products include handbags from Chinwe Ezenwa and Tash women’s outfits by Tasha Goodwin.

In addition to DHL for shipping, MarketPlace Africa will utilize MallforAfrica’s e-commerce infrastructure. The startup was founded in 2011 to solve challenges global consumer goods companies face when entering Africa.

French President Emmanuel Macron  href="https://pctechmag.com/2018/05/french-president-emmanuel-macron-launches-a-usd76m-africa-startup-fund/">unveiled a $76 million African startup fund at VivaTech 2018 and TechCrunch paid a visit to the French Development Agency (AFD) — who will administer the new fund — to get details on how it will work.

The $76 million (or €65 million) will divvy up into three parts, AFD Digital Task Team Leader Christine Ha told TechCrunch.

“There are €10 million [$11.7 million] for technical assistance to support the African ecosystem… €5 million will be available as interest-free loans to high-potential, pre-seed startups…and…€50 million [$58 million] will be for equity-based investments in series A to C startups,” explained Ha during a meeting in Paris.

The technical assistance will distribute in the form of grants to accelerators, hubs, incubators and coding programs. The pre-seed startup loans will issue in amounts up to $100,000 “as early, early funding to allow entrepreneurs to prototype, launch and experiment,” said Ha.

The $58 million in VC startup funding will be administered through Proparco, a development finance institution — or DFI — partially owned by the AFD. “Proparco will take equity stakes, and will be a limited partner when investing in VC funds,” said Ha.

Startups from all African countries can apply for a piece of the $58 million by contacting any of Proparco’s Africa offices.

The $11.7 million technical assistance and $5.8 million loan portions of France’s new fund will be available starting in 2019. On implementation, AFD is still “reviewing several options…such as relying on local actors through [France’s] Digital Africa platform,” said Ha. President Macron followed up the Africa fund announcement with a trip to Nigeria last month.

Nigerian logistics startup Kobo360 was accepted into Y Combinator’s 2018 class and gained some working capital in the form of $1.2 million in pre-seed funding led by Western Technology Investment.

The startup — with an Uber like app that connects Nigerian truckers to companies with freight needs — will use the funds to pay drivers online immediately after successful hauls.

Kobo360 is also launching the Kobo Wealth Investment Network, or KoboWIN — a crowd-invest, vehicle financing program. Through it, Kobo drivers can finance new trucks through citizen investors and pay them back directly (with interest) over a 60-month period.

On Kobo360’s utility, “We give drivers the demand and technology to power their businesses,” CEO Obi Ozor told TechCrunch. “An average trucker will make $3,500 a month with our app. That’s middle class territory in Nigeria.”

Kobo360 has served 324 businesses, aggregated a fleet of 5480 drivers and moved 37.6 million kilograms of cargo since 2017, per company stats. Top clients include Honeywell, Olam, Unilever, and DHL.

Ozor thinks the startup’s asset-free, digital platform and business model can outpace traditional long-haul 3PL providers in Nigeria by handling more volume at cheaper prices.

“Logistics in Nigeria have been priced based on the assumption drivers are going to run empty on the way back…When we now match freight with return trips, prices crash.”

Kobo360 will expand in Togo, Ghana, Cote D’Ivoire and Senegal.

[PHOTO: BFX.LAGOS] And finally, applications are open for TechCrunch’s Startup Battlefield Africa, to be held in Lagos, Nigeria, December 11. Early-stage African startups have until September 3 to apply here.

More Africa Related Stories @TechCrunch

More Africa Related Stories @TechCrunch

·         CowryWise micro-savings service opens high-yield government bonds to everyday Nigerians


African Tech Around the Net

·         More Than Half of Sub-Saharan Africa to Be Connected to Mobile by 2025, Finds New GSMA Study
·         Ethiopia’s Gebeya acquires Coders4Africa to accelerate its growth
·         Rwanda, Andela partner to launch pan-African tech hub in Kigali
·         Google’s free public Wi-Fi initiative expanded to Africa
·         Accounteer wins 2018 MEST Entrepreneur challenge
·         SafeBoda completes expansion to Kenya, now live in Nairobi
·         Uganda government sued over social media tax

Salesforce will acquire enterprise e-commerce software startup CloudCraze

 Salesforce is set to buy CloudCraze, an enterprise e-commerce solution built on its cloud-based customer relationship management platform. Based in Chicago, CloudCraze announced on its site that it’s signed a definitive agreement to be acquired by Salesforce. The deal’s financial details were not disclosed. Read More

Wizeline expands its outsourced IT services business into southeast Asia

 Wizeline, a provider of outsourced programming services, is expanding its global footprint with agreements to partner with a slew of development shops across Southeast Asia. Founded in 2014, the company’s vision is to provide programming jobs for developers in emerging markets to unlock the local talent pool and expose a new generation and geographies to the startup world. Read More

5 questions raised by self-driving cars — and what they mean for B2B

autonomous car

The thought of self-driving cars on the road seems like a distant dream, yet they’re on the road today, and will be available to the general public within five years. Similarly, in the B2B world, artificial intelligence (AI) and predictive technologies represent a disruptive shift that’s forcing companies to reimagine how they operate. We’re already seeing visible examples such as programmatic bidding in the advertising world. In five years, many parts of our business will likely be driven by AI.

With that in mind, here are eight questions everyone is asking about self-driving cars, each of which has an important parallel that helps frame AI’s impact on business and society at large.

Will we be able to trust them?

Google’s self-driving cars have already driven 1,210,676 miles yet, as of July this year, there had only been 14 accidents — all caused by human error, not by the software. Given the fact that around 33,000 people die in traffic accidents in the U.S. every year, and much of blame falls to distracted drivers, there is a huge opportunity to make our roads safer.

In the B2B world, very few of our decisions are life or death, but there is still important revenue at stake. Machine learning can be used to develop models, but it’s still important for a data analyst to validate them and put the right safety checks in place. When the models are live, someone needs to monitor the impact of any changes and watch for drift in performance to ensure continued accuracy.

Will I ever own one?

The thing that sucks about self-driving cars is that many of us may never have our own. The ability to run cars autonomously changes the economics of ownership. It will no longer make sense to own an expensive asset that we only use 5 percent of the day, when we could instead just request a car precisely when we need it.

Within B2B, this would be like rolling your own custom-built algorithms. The reality is that most companies will consume predictive-as-a-service instead. That’s because to operate highly accurate models, they’d need to be vicious about acquiring data, building connectors, and tuning performance. Just like having access to a fleet of self-driving cars, there are economies of scale and network effects that make subscribing to best-of-breed services appealing.

What are the ethical impacts of AI?

The software that drives the car is programed to make decisions that aren’t always black and white. For example, if a fatal accident is imminent, are the passengers’ lives more valuable than those outside the car? And who has authority to override the car’s logic — the government, the vendor, or the owner?

When it comes to businesses, AI might decide who to promote and who to fire, what level of service each customer gets, or even the price they’re charged. That raises the question: Who writes the rules for those algorithms, and how can we know whether we’re taking customer profiling too far?

Who is liable?

In a world where cars are driven by software, vendors take on new levels of liability for ensuring that things won’t go wrong. If there is a fatal crash, is it the manufacturer’s fault, the vehicle’s owner (whether that be an individual car owner or a fleet manager), or the passenger who failed to override the car’s computer and take over? A recent episode of The Good Wife asked this question in a case where the “driver” was an employee of the self-driving car manufacturer, and the victim sued both the person who was testing the car at the time of the accident and the company itself.

B2B companies are used to starting with an empty database and a vendor that’s just responsible for making sure their software is accessible and doesn’t crash. But with predictive technologies, that’s no longer the case. AI vendors need to be aware of the outcomes each particular client is trying to predict and where they want to steer their business. This puts them directly in the path of revenue, so if a quarter is off, we might ask, “Is this the VP of sales’ responsibility or the vendor’s?”

Will today’s established players be leaders or laggards?

While there is little doubt that players like Toyota, Ford, and Volkswagen will be in the mix, self-driving cars will still represent a disruptive shift for the auto industry. Because of the electrification of cars and the importance of software, players like Google, Apple, Tesla, and Uber may well lead the pack.

In the B2B space, Salesforce and Marketo will be in the AI mix; however, they’re faced with competing priorities from their legacy businesses, and they have a very different relationship with regards to data visibility. The new players that are emerging don’t have those constraints and can focus all their energy on acquiring data, building advanced models, and feeding applications with intelligent recommendations. Only time will tell who will win, but I sure look forward to watching it all play out.


Guest post by Jamie Grenney, VP Marketing, Infer
Prior to leading marketing at Infer, Jamie spent eleven years at Salesforce.com, most recently as the VP of Social Media & Online Video. During his tenure he held various roles across the organization. He was instrumental in defining the inside sales process, pioneered salesforce.com‘s SMB marketing efforts, and helped shape many parts of the product roadmap. Jamie is well known for his thought leadership content on topics such as CRM adoption, sales & marketing best practices, crowdsourced innovation, viral marketing, and social strategy.










5 questions raised by self-driving cars — and what they mean for B2B

autonomous car

The thought of self-driving cars on the road seems like a distant dream, yet they’re on the road today, and will be available to the general public within five years. Similarly, in the B2B world, artificial intelligence (AI) and predictive technologies represent a disruptive shift that’s forcing companies to reimagine how they operate. We’re already seeing visible examples such as programmatic bidding in the advertising world. In five years, many parts of our business will likely be driven by AI.

With that in mind, here are eight questions everyone is asking about self-driving cars, each of which has an important parallel that helps frame AI’s impact on business and society at large.

Will we be able to trust them?

Google’s self-driving cars have already driven 1,210,676 miles yet, as of July this year, there had only been 14 accidents — all caused by human error, not by the software. Given the fact that around 33,000 people die in traffic accidents in the U.S. every year, and much of blame falls to distracted drivers, there is a huge opportunity to make our roads safer.

In the B2B world, very few of our decisions are life or death, but there is still important revenue at stake. Machine learning can be used to develop models, but it’s still important for a data analyst to validate them and put the right safety checks in place. When the models are live, someone needs to monitor the impact of any changes and watch for drift in performance to ensure continued accuracy.

Will I ever own one?

The thing that sucks about self-driving cars is that many of us may never have our own. The ability to run cars autonomously changes the economics of ownership. It will no longer make sense to own an expensive asset that we only use 5 percent of the day, when we could instead just request a car precisely when we need it.

Within B2B, this would be like rolling your own custom-built algorithms. The reality is that most companies will consume predictive-as-a-service instead. That’s because to operate highly accurate models, they’d need to be vicious about acquiring data, building connectors, and tuning performance. Just like having access to a fleet of self-driving cars, there are economies of scale and network effects that make subscribing to best-of-breed services appealing.

What are the ethical impacts of AI?

The software that drives the car is programed to make decisions that aren’t always black and white. For example, if a fatal accident is imminent, are the passengers’ lives more valuable than those outside the car? And who has authority to override the car’s logic — the government, the vendor, or the owner?

When it comes to businesses, AI might decide who to promote and who to fire, what level of service each customer gets, or even the price they’re charged. That raises the question: Who writes the rules for those algorithms, and how can we know whether we’re taking customer profiling too far?

Who is liable?

In a world where cars are driven by software, vendors take on new levels of liability for ensuring that things won’t go wrong. If there is a fatal crash, is it the manufacturer’s fault, the vehicle’s owner (whether that be an individual car owner or a fleet manager), or the passenger who failed to override the car’s computer and take over? A recent episode of The Good Wife asked this question in a case where the “driver” was an employee of the self-driving car manufacturer, and the victim sued both the person who was testing the car at the time of the accident and the company itself.

B2B companies are used to starting with an empty database and a vendor that’s just responsible for making sure their software is accessible and doesn’t crash. But with predictive technologies, that’s no longer the case. AI vendors need to be aware of the outcomes each particular client is trying to predict and where they want to steer their business. This puts them directly in the path of revenue, so if a quarter is off, we might ask, “Is this the VP of sales’ responsibility or the vendor’s?”

Will today’s established players be leaders or laggards?

While there is little doubt that players like Toyota, Ford, and Volkswagen will be in the mix, self-driving cars will still represent a disruptive shift for the auto industry. Because of the electrification of cars and the importance of software, players like Google, Apple, Tesla, and Uber may well lead the pack.

In the B2B space, Salesforce and Marketo will be in the AI mix; however, they’re faced with competing priorities from their legacy businesses, and they have a very different relationship with regards to data visibility. The new players that are emerging don’t have those constraints and can focus all their energy on acquiring data, building advanced models, and feeding applications with intelligent recommendations. Only time will tell who will win, but I sure look forward to watching it all play out.


Guest post by Jamie Grenney, VP Marketing, Infer
Prior to leading marketing at Infer, Jamie spent eleven years at Salesforce.com, most recently as the VP of Social Media & Online Video. During his tenure he held various roles across the organization. He was instrumental in defining the inside sales process, pioneered salesforce.com‘s SMB marketing efforts, and helped shape many parts of the product roadmap. Jamie is well known for his thought leadership content on topics such as CRM adoption, sales & marketing best practices, crowdsourced innovation, viral marketing, and social strategy.










Holiday Shopping Season For SMBs? Not So Much

blackfriday It’s an established fact that Americans love to shop during the holidays. The frenzy of rushing to the local mall or Main Street to snap up the latest “Black Friday” deals is a time-honored tradition, and, in the last decade, so is shopping online on “Cyber Monday.” We go on to joyously spend our way through the month of December until stores close on Christmas… Read More

You’ve Only Got One Shot At Building A Consumer Unicorn

unicorn-money Imagine if the founder of a very successful consumer technology company knocked on your door and offered to get you in on the ground floor of their new enterprise. Almost any VC would jump at the chance, as would most engineers and designers. But I wonder if they’re most often making a mistake? I can point to a number of founders who have had repeat success in B2B markets. Read More

How savvy B2B marketers are killing it at lead gen (webinar)

lead generation

Join us for this live webinar on Thursday, September 10 at 10 a.m. Pacific, 1 p.m. Eastern. Register here for free

The face-to-face B2B sales process of the past — the many phone calls, the gratuitous lunches, the exhausting trade shows, followed by more phone calls — has been transformed by the digital landscape. The number of touchpoints and opportunities that now exist to intercept prospects and turn them into viable leads is unprecedented.

That doesn’t mean lead generation has become easy. It takes a healthy mix of art and science to succeed in a hyper-competitive, crowded space. And it takes a well-honed knowledge of all the available channels and how they can compliment one another.

That’s because there’s no one silver bullet for lead generation. If you think email alone is going to give you the results you’re looking for, or an aggressive adword campaign, you’ll be overlooking many of the tactics that successful B2B marketers bring together to turn the top of the funnel into leads that convert.

Email, search marketing, display ads, webinars, social campaigns, content marketing and syndication, on-demand events, blogs — not to mention strategic use of your own website — are all elements that need to be considered.

Of course, that list, which is not exhaustive, can be exhausting. In this webinar, we’ll look at the kinds of tools marketers need to ease the process, and ways to test and scale that make it all manageable — and ultimately get you the ideal mix of lead gen tactics for your business.

Join our panel of expert B2B marketers who will share insights and best practices that can heat up your lead gen game.


Don’t miss out!

Register here for free.


In this webinar, you’ll learn:

  • Under-the-radar B2B ad channels including technology reviews sites and content syndication
  • How to make the most of search, display, and paid social media campaigns for B2B audiences
  • Low-risk ways to test new lead gen tactics before scaling your spending

Speakers:

Nick Bhutani, Senior Digital & Acquisition Marketing Manager, Booker
Rochelle Sanchirico, VP of Marketing, mHelpDesk
Jamaal Saunders, Senior Marketing Analyst, Salesforce


 

This webinar is sponsored by Capterra

More information:

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