What investors want you to know about B2B vs B2C
Different things have a different starting point
If you are running a B2C SaaS, here’s the thing investors/VCs want you to know:
B2B SaaS company is a better investment than B2C SaaS.
Money is the most direct factor, B2B sells on pain points, not desirability, you can charge higher, and convince a few key stakeholders in the company, and you sell a bunch of ‘seats’, or based on the perceived value, whichever is higher.
Think Oil & Gas company using CRM vs a logo design company using CRM, they will be willing to pay very different prices based on the deal size they expected to capture by using the same software.
Yes, exact software requirements might be different but you get the point.
Not only that, B2B SaaS snowballs if you manage to convince key players in certain industries that you are the best. Other key players started looking at you.
Whereas in B2C space, people usually say “I like my telegram better than Whatsapp”, or heated arguments on Reddit about why Tiktok is better than Instagram reels.
But the hardest part of B2C is perhaps, the constant iteration and fresh content/features that are required to maintain your customer loyalty.
The key to being a great B2C app is realizing consumers choose you because of desirability, not because of pain.
Think Instagram (Meta) mimicking Snapchat’s story feature 8 years ago, developed a cross-platform chat feature, and heavily incentivized Reels creators recently to rival TikTok.
If they have remained the same photo uploading + filter app, they would become an irrelevant photobook app.
Understanding consumer trends and staying on top of it is difficult. Not many will bet on the chances of company consistently hitting the consumer jackpot.
I said B2B SaaS is a better investment, doesn’t mean B2C app don’t stand a chance.
The best thing about B2C app is you should have many ways to acquire users, usually cheaper because you can start getting tractions with very simple proof of concept (POC).
If you can start with bootstrapping, reveal the market gap, and execute it, investors will come. Don’t expect investment with only an idea.
Millions if not billions of B2C SaaS/consumer apps failed, but a few that succeeded changed billions of people and we use them every day.
If you dare to dream big, expect the challenges to be several orders of magnitude higher. Getting an early investment is one of the few you will face as B2C SaaS/consumer app founder.
Don’t wait for investment, start bootstrapping.
