Jonathan Naymark
Launching a B2B product within a B2C company presents distinct challenges as you attempt to strike a balance between successfully establishing a new product and maintaining your original business. No one claims it’s easy, but it is doable once you understand what’s necessary for a successful B2B expansion.
I’ve put together a list of six important lessons I learned while launching Codecademy for Business, which should be valuable to anyone launching a B2B offering within a B2C company.
Lesson #1: To ensure you have B2B viability, look at the data
As you’re considering foraying into the B2B space, first determine if there’s even a potential market for such an offering. How can you make an informed decision? The answer may lie in understanding how your B2C customers are engaging with your product or service.
For example, was a personal or business email domain submitted during sign-up? When reviewing your engagement data, do you notice a spike during work hours? These are strong indicators your product has value in the B2B space, and it might be time to develop a new solution.
We realized that nearly 19% of our user base was likely signing up using a work email address. In our consumer onboarding quiz, we asked if people were using the platform to help them at work, and 30% told us they were. Meanwhile, nearly 50% of current account managers previously used Codecademy as a consumer.
Lesson #2: B2B requires a completely new tool set and new hires
Consumer companies are often led by marketing, and they often have the budget to spend a lot on Facebook or Google. However, it’s incredibly hard to build a B2B company with just paid marketing campaigns. Your tech stack is also going to fundamentally change.
We implemented an entirely new B2B-focused customer relationship management platform, Hubspot. But an even bigger change came in the form of our people: We hired an entirely new division of salespeople.
This required us to integrate an entirely different culture. We learned to leverage sales performance investment funds (SPIF) instead of focusing on customer acquisition costs (CAC) as we had in the past. Hiring salespeople and creating compensation plans to incentivize them felt like building an entirely new muscle. Fortunately, the more we exercised our sales function, the stronger it got.
Lesson #3: B2B is a marathon not an engineering sprint
We learned early on that building a business is a marathon. This was true across our team, which started with two salespeople, our product and our customer base.
It’s important to acknowledge where you are today, but you also should have a vision for the long term. At first, we were selling to engineering and data science managers, but we didn’t have a product, and were manually creating accounts every single time. But we knew where we wanted to go.
In later months, when we’d release a new product feature, I’d look back at our original toolset and see how far we’d come. From manually sending people invoices to building a checkout page that supported recurring payments, we not only built a better user experience, we’d also forged a stronger and more resilient product.
Your buyer will grow and become more senior. As you venture up-market, your clients won’t just be B2C customers that you’ve converted to B2B. They could be the top decision-makers at their companies.
Our B2B audience went from being primarily managers and directors to VPs and CTOs. Engaging them meant developing an entirely new go-to-market strategy and an emphasis on sales. It took time to pull off, and we wouldn’t have been able to achieve it if we had just tried to rush to the finish line instead of gradually evolving our business.
Lesson #4: Fake it until you make it
Some people call this the Wizard of Oz school, where you pretend you have a product when you don’t. I know how this sounds, but when you’re just starting out and have limited resources, it can be an effective way to both test your product and understand your customers. Before you start building something, you can gain insights on what users actually want and need by acting like the Wizard behind the screen.
In our initial launch of our first B2B product, we were selling bulk access to “seats.” In reality, buyers were sending me lists of their users, and I would manually set up consumer accounts for them on the back end. Later, as we evolved our enterprise offerings, we would manually perform tasks for premium features we hadn’t built yet.
This allowed us to do a few things: Build revenue along the way, zero in on how customers were using the product and commit to building the most valuable and important features.
Lesson #5: You are your best customer
One of the biggest advantages of starting a B2B offering within an established B2C company is that you’re likely serving a customer that already exists within your company. This provides an opportunity for dogfooding.
Given that we were selling an e-learning product to businesses, it made sense for us to use our own product for employee onboarding, just as we were pitching businesses to do. We deployed our new B2B platform to dozens of new hires on our own engineering team, which helped us not only test and improve the product but create initial case studies and proof points that we could then leverage in sales.
Lesson #6: Improvise where needed, but don’t skimp on security
In the early stages of your B2C2B ramp-up, it’s unlikely every system you’ll need will be up and running. But you can compensate for that by being resourceful and industrious.
That could mean some after-hours, old-school data entry or manual invoicing — whatever works as long as you keep taking steps toward building and adopting the protocols that serve you and your clients best. Don’t be afraid to improvise on almost everything.
Note that I said “almost.” What you can’t afford to improvise on is security and compliance. When B2C companies think about security, they tend to focus mainly on complying with laws governing consumer protection, like the California Consumer Privacy Act or Europe’s General Data Protection Regulation.
Enterprise customers have greater security expectations; they’re much more likely to question you about data protection and other measures than B2C clients. If your answers fall short, you may lose their business — however good your product is, companies won’t want to do business with you if it means putting their sensitive data at risk.
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