B2B growth is relatively straightforward than a consumer business, at least in the early days. It is more so if you have access to your target customer base through personal networks and other channels such as social media and so on.
That being said, B2B sales could be a complicated matter if you don’t have a strategy in place and don’t have an understanding of how B2B sales works. Often B2B sales require introduction and access. For example, you are building a real estate management company but don’t know anyone in the real estate industry, it would be wiser for you to not get into that market. To that end, having a playbook regarding how to approach acquiring customers in the early days is critical for every B2B startup.
The predominant starting channel for B2B sales, in the early days, is personal networks. You reach out to your friends and colleagues and you begin there. As your business grows, you look for other channels to explore and expand your reach. But it inevitably begins with your personal networks. This is where customer obsession and the importance of building a great product comes in. Once you reach out to your personal network, you convert a small number of users who start using your product. If your product is of high quality and your customers are happy with your support, they will tell other people regarding your product leading to more users and growth.
The most successful B2B companies today found their early growth using a number of strategies that have lately become a playbook for B2B growth in the early days. It begins with tapping into your personal network of friends, peers, and colleagues and then gradually moving up to reaching out to your customers in various channels such as LinkedIn, Facebook, community groups, and so on.
Once you find a small number of users who are happy, the next dominant strategy most successful B2B companies use is powering a system to fuel word of mouth and referrals through a combination of customer support and product improvements.
We can break down the playbook into three parts:
1) personal network
2) social channels and online and offline communities where your customers hangout
3) referrals and word of mouth.
4) do things that don't scale
1) Personal network: The nature of B2B sales makes the personal network tremendously important. Often B2B purchase decisions come from the top. Unless the decision-makers understand and believe in your product, your chance of making a breakthrough is slim. This is a major blockage for most startups because in the early days you don’t have many credentials in the market and people seldom take you seriously. To that end, personal networks come in handy. If you know people who might benefit from your product, and if you have direct access to them, it makes it easy to convert. This has been the case with many successful B2B companies. Founders tapped into their personal networks to bring in initial customers. Take this example from Asana, the productivity and team management tool, on how they got their initial customers:
“Almost all of (our first ~15 users) are people we are personally close to. We're currently focused on making them really happy with their experience – rounding out the feature set, responding to their feedback, fixing bugs, and improving performance,” wrote Asana Co-founder Justin Rosenstein in a Quora answer. “As that continues, we'll continue to roll the alpha product out gradually to more and more people. There probably won't be any particular floodgate moment, more of a steady influx of new users.”
Stewart Butterfield echoed the same strategy in an interview with First Round Review: “We begged and cajoled our friends at other companies to try it out and give us feedback. We had maybe six to ten companies to start with that we found this way. The pattern was to share Slack with progressively larger groups. We amplified the feedback we got at each stage by adding more teams.”
If you are building a B2B business, it would be wise to invest time in building a personal network that can help in acquiring customers. You could also find ways to build personal networks such as partnerships, joining a community, bringing in an investor, and so on.
2) Online and offline communities: Often personal networks get exhausted pretty quickly. The next stoppage for B2B growth is often the places where your target customers spend their time. For example, LinkedIn and Facebook groups and online forums such as the WordPress community, etc. There are ample examples of companies exploiting these forums for achieving initial growth in B2B business. Here is Segment founder Peter Reinhardt:
“At the very beginning, we actually launched as an open-source library on Hacker News. It took off there, blew up basically overnight. Our first customers were the folks hanging out on Hacker News. It was basically small companies for the most part. Founders who were looking for better ways to instrument their web applications and mobile apps with this sort of analytics tracking.”
3) Referrals and word of mouth: Referrals is another widely used strategy B2B companies use for growth in the early day. Once you have exhausted your personal network and communities where your customers' hangout, the next natural destination is building out a strong referral program and taking advantage of word of mouth. Now referral and word of mouth come naturally if you have built a great product, your initial users are happy with your product and support. Many companies also apply a systematic approach to developing referral programs such as rewarding referrals, building a community, developing membership programs, etc. But the most important aspect is that your product has to make your customers happy.
Patrick Collison of Stripe put this beautifully: “Our first user actually became one of the first employees at Stripe. I had known Ross Boucher for a couple of years. We were working on a payments system, and he needed a payments system, so I just suggested, hey, do you want to try this out? I didn’t emphasize how early on it was. What indicated to us that there was something interesting here was that our friends who were using it asked if they could invite their friends, and those people invited their friends, and it spread through word of mouth.”
4. Don’t look for scale or outsource sales: In his beautiful essay titled Doing things that don’t scale, Paul Graham suggests that founders must do the hard work, do things by hand, and push personally to grow a business in its early days. He suggests that in your early days, hiring a salesperson does not help, instead, you have to do the sales and then once you have some success, you can go on to build a sales organization. You can’t simply hire a salesperson to do the sales or run Facebook ads to acquire customers. In the early days, you have to do these things by yourself, go door to door, sell, and take feedback. It is useful to embrace your scrappiness in the early days and do things that every company should do.
Read Paul Graham’s Do things that don’t scale here.
From 0 to $1B - Slack's Founder Shares Their Epic Launch Strategy here.
How to Grow Your Business: Lessons from Zero to $100k/month in 2 Years here.