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Acquiring the "B" in a B2B2C biz model

We are a startup striving to reinvent engagement between sports teams, leagues, and fanbases. Our target market is youth sports (age 13-21). Our product allows anyone to create new teams, which then leads to a bunch of Aha! moments like a context-rich chat, stats, scores, content, etc.

We completed a closed beta with 50 users (youth athletes, coaches, parents). We learned that while youth athletes love the product, the coach demographic (usually >40yo) is enormously skeptical about tech/privacy. So, now, we have an acquisition problem. Even though anyone can download the app and create a team, it is the coach who is the "admin".

We're experimenting with several marketing channels (1:many emails, 1:1 emails, IG, coach-to-coach selling, referrals, viral feature) to find what sticks. I've researched other B2B2C growth stories from Doordash, Caviar, Instacart, etc. with limited luck. This a16z post is insightful: https://a16z.com/2018/05/17/b2b2c-business-models-rampell/ , but it does refer to "proprietary acquisition channels" in a B2B2C context.

Would love to hear from other B2B2C startups how they overcame the "B in B2B2C" acquisition problem.

on June 27, 2020
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    In the case of food delivery startups, the pattern seems to be:

    1.) Acquire initial "C" users by offering B's product via a better experience at no extra cost, and without telling B. The orders placed on your site just get manually called in.
    2.) Approach B only after enough Cs have changed their behavior and are ordering through you. Now you have a much better negotiating position, and you can ask B to give you a commission on each sale, or else being locked out of your marketplace.

    This basically requires operating at a loss for a while, burning through capital while you try to establish a position between the Bs and Cs, while also competing against other food delivery services in a land grab.

    It remains to be seen whether this is a sustainable model for food delivery, nevermind whether it is generalizable to other areas. One reason why it seems well-suited for food delivery is that consumers can make a new buying decision every single time they order a meal, which is an opportunity for the middleman to influence that decision and extract their cut.

    I don't think the same is true of youth sports leagues. I suspect there's virtually no risk that a teenager will switch to a different league mid-season based on the quality of the software experience.

    I also don't think leagues see themselves as being in heavy competition with each other for enrollment. Maybe things have changed since my youth sports days. Do they have marketing budgets? The amount they're currently spending on marketing would be a good indication of how much they'd be willing to give up in order to win in a competitive marketplace.

    For these reasons, I don't think food delivery startups are a great model for your market. Again, I'm not currently in that world, and perhaps some of my starting assumptions are wrong.

    A closer match might be Slack, especially in its early days. They appealed largely to developers, who would spin up their own Slack workspace to use at work. As it proved its worth, and as employers wanted to retain control over work-related communications, companies started paying for paid plans, and Slack usage expanded to other parts of the enterprise.

    There's a similarity with food delivery, in that they got the "C" first, but there's also a big distinction in that they are not trying to insert themselves into pre-existing transactions between "B" and "C", and they don't try to exert any leverage to potentially hurt "B" by sending "C" elsewhere. In this way, I think they are both a "nicer" business, and more likely to match your market. So maybe some research into Slack growth stories would give you some ideas.

    Supposing you did follow their lead, and offer a free version to your Cs that then gets up-sold to the Bs after the Cs have found tremendous value. There still remains the problem that youth sports leagues probably don't care very much about "owning" the communication channel used by athletes, coaches and parents. There has to be some other kind of value generated by a paid plan that would convince the leagues to purchase. Once you've got all those Cs, what can you offer the Bs to save them money, make them money, reduce risk, etc.?

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      Matt - Thank you. That was thought provoking (in a good way). Let us know if you'd be open for a quick 30 min call. We'd love to learn from you!

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        Ok. As I said, I was making a few assumptions about this market, and I'll be interested to find out what you've learned about their reality. We'll have a much more interesting conversation if you can tell me about these leagues' budgets and how they currently spend that money. Feel free to take some time to collect this data if you need to, and DM me on Twitter to set up the call.

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    Seems tough, because youth sports teams are usually pretty small. You could consider selling at the league level to get buy-in from lots of coaches simultaneously.

    If leagues are as skeptical as coaches, maybe try going bottom up and allowing players to be app admins and then bring in their coaches later. Or try sports with larger teams (e.g. football) who might have more coaching assistants, who I'd guess are young, bored, and are therefore are easier to convince of something like this. Coaches might go for it if they can offload management to an assistant.

    As for channels, I'd probably stick with one-one conversations until I learned more about what works. It's hard to get great feedback with 1-to-many channels or viral channels (although you might need viral if you go bottom up).

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      Thanks, and I agree. We're investing in bottom-up 1:1 channels for now, and learning as much as possible. Selling to leagues = B2B enterprise sales process = hire sales reps, build sales org, etc. This is what competitors have done, but there are ceilings in this model and the ROI is unattractive to VCs. We're consumerizing a traditional B2B market. There are powerful moats once we are successful.

      Great idea on the football team. I'll see what the team thinks!

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