B2B start-ups, the next hot thing. High margins, rapid growth in turnover and early profitability speak for themselves. When analysing the success factors of B2B start-ups, they differ greatly from B2C companies.
It becomes clear that B2B models often post a profit more quickly than B2C models because B2C companies have to invest significantly more in order to become popular – and developing a brand takes more time in general. B2B companies, however, can already survive in the market with few customers and little capital.
The time has come for B2B start-ups, the boom being a logical consequence of the boom of the Zalandos and Airbnbs all over the world: B2C companies create demand for products and services offered by B2B founders. An example of this is Bonagora. Founded in 2014, the company digitised the ordering and order handling processes of online retail companies such as Westwing or Home24.
One can be certain that such global players do not cooperate with start-ups for altruistic reasons. To put it differently: if a young company manages to acquire influential customers, it has to have a good product. This can be called sexy or simply smart. It is a fact that B2B companies are currently on the rise precisely because they offer their customers – the companies – real added value.
Celonis, for example, has developed a software for process optimisation. Its customers use the software to make their processes more transparent, more efficient and thus less expensive. Since processes are at the heart of every company, they also generate large amounts of data. The software developed by Celonis summarises, analyses and visualises the data so that it becomes visible where processes can be improved. Take a look at this example: every year, companies lose several million euros because they do not pay their invoices within the discount period. This is a time- and cost-intensive process flaw. The Celonis software reveals it, names the underlying causes and thus makes the process easier, faster and more transparent in the future.
B2B Growth & Profitability?
Those who provide software services to companies can regularly post consistent incoming payments. However, those who sell trousers to John Doe have to book it as a one-off income in the worst case. The difficulty that B2C companies face also lies in retaining customers. B2B companies barely know this problem.
There are many good reasons to be euphoric. Nevertheless, even B2B start-ups have no guarantee of success. Profit is all well and good, but it is not always the most important thing. Sometimes, rapid growth is more important than profitability. Sometimes, raising risk capital is also a must for B2B start-ups at earlier stages. After all, no company can afford to let the competition get ahead.
Therefore, the tricky part is to recognise when which strategy is the best. Another challenge is to scale up sales. It is relatively easy to get a handful of customers in the beginning. Acquiring the next customers, and especially retaining them, can be much more difficult – or easier. It depends on how good your products and services are.
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B2B Digital Masters Convention [dotSource]
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Gründung eines B2B Start-ups in zehn Schritten [Gründerküche]
Trendreport B2B Start-ups [StartingUp]