Do you prefer bootstrapping a B2B or a B2C project and why?
What do you prefer? Bootstrapping a product in the B2B or B2C space? And do you have a specific reason to prefer one over another?
What do you prefer? Bootstrapping a product in the B2B or B2C space? And do you have a specific reason to prefer one over another?
Heya Bas,
If you're looking to fully bootstrap and don't intend to ever raise money I'd highly suggest you focus on B2B. In short, businesses have money to spend and are much less price sensitive.
In contrast, consumers expect a lot for little (or nothing) today – just think about all the free services you use. Getting to any sort of meaningful scale in B2C can be incredibly challenging.
Hope that helps :-)
@twanlass, thanks, clear answer 👍
And about what you're saying about the intention to not ever raise money. I suppose you mean that if you do want to start a B2C product you'll need money for the extra runway, marketing etc.
Especially marketing to consumers can be quite expensive, because the customer acquisition costs (CAC) are probably higher than the lifetime value (LTV) in the beginning until you find a business model that works.
Yup, spot on @baswenneker. Selling B2C can take many forms, too. It could be a viral app, it could be a Kickstarter project. Both though are much harder to start selling than a B2B product where you can start by doing cold outreach and demos.
With B2C you'll likely (though not always) need to defer revenue to grow a user base to a size you can monetize. That means a longer cash runway needed, etc.
If your product is on the lower end of price, too, LTV can be brutal. Anytime you need more than ~6-12 months to recoup your CAC on a customer you're in a tight position :-)
Great question and discussion!
I totally agree.
So do I
And my axe!
But really, same here.
Careful, dude! Everyone can see your reddit!
Fine, I'll go against the current and say a word in support of B2C :)
Sure, demand for B2B software is driven more by logic and less by emotion (compared to B2C). And businesses are prepared to pay much, much more for software than consumers are...
But guys - selling software B2B is really, really hard.
And even when you have sold your product, you have to build the software, keep it working, and handle customer success/churn.
If you run an indie B2B software business, you don't get holidays. Not really. Forget going on holiday without your laptop and an internet connection.
Selling a physical, consumer product on the other hand is much, much less pressure.
Take jewellery, for example. You can get people to buy (eg via Kickstarter) before you've even built your product. No upfront costs!
And get this - there are millions of potential customers out there. Most of them easily reachable via Facebook or Instagram. Even better - your customers will walk around showing off your product to other potential customers. For free!
Want to go on holiday? Ask your sister/neighbour/mum to answer a few emails and handle P&P for you. No laptop required.
Sure, there are downsides to B2C - I even prefer B2B on balance. But it is really surprising that so many people on IH think that building a B2B business will be easier. Having done both before, I'd say that nine times out of ten, the opposite holds true...
Hi @louisswiss, thanks to give a different opinion. I guess we all are super focussed on building a software product. I run a webshop myself and I can't agree more, launching a company which sells physical products to consumers is easy. Probably easier that building a B2B SaaS product.
I would always consider going down the B2B route first, especially for a bootsrapped business.
There are blurred lines however. My new business -https://www.pilotfish.io/hello - is targeting nomads (those who travel around the world and work online). Although you could argue that it's a B2C audience (as I'm not strictly targeting businesses) I would say that's sort of a hybrid between the 2 where the vast majority of them work for themselves or run businesses.
Pieter Levels did it with NomadList and you'll see many other businesses who target this type of hybrid audience.
I agree, the line between consumers and freelancers can be somewhat blurry, although freelancers often spend money on product that make them more productive.