[wdewind]

For those of us not working on cat photo sharing products for the ever shifting consumer market there is considerably less luck, throwing random stuff at the wall, and pivoting involved. B2B SaaS is pretty nice. Join us on the dark side :)

[timr]

"For those of us not working on cat photo sharing products for the ever shifting consumer market there is considerably less luck, throwing random stuff at the wall, and pivoting involved."

...but how do you know that? The principal disadvantage of B2B is that the long sales cycle greatly increases the time until you get feedback that your product sucks, so you either succeed (in which case, of course, you say "it wasn't luck"), or you fail (in which case, it's attributed to bad luck). Also, even then, it takes a fairly self-aware set of founders to admit that the reason that the product isn't selling is because it sucks, and not because (say) the sales team is bad, or because BigCo isn't buying this quarter, etc.

Say what you will about consumer startups, but the ability to pivot quickly in the face of consumer feedback is a feature, not a bug. You can sort-of get around this by doing a direct-sale B2B service (i.e. what you're doing with justworks), but in that case, you're still a consumer startup -- you're just selling a "professional" product with a niche market.

[wdewind]

> the ability to pivot quickly in the face of consumer feedback is a feature, not a bug.

I couldn't agree more, but I'm not sure you're right about the feedback cycle. We did a ton of "lean startup"-ish stuff including launching minimal products to trusted beta users and expanding based on customer feedback.

But there is exactly a 0% chance that Justworks will ever fundamentally "pivot" to being a different product. The concept that this is even preferable is kind of crazy. A pivot should be a last chance "we got it wrong but we've got some money left so let's try something else" - not a matter of course.

In terms of knowing whether or not the product sucks vs. the sales team sucks, this is, of course, an eternal question in SaaS. Luckily our product is selling, but I would say that regardless trust and high amounts of communication between sales and product development is absolutely key. At any sort of level of maturity this is your prime feedback loop with the customer and we take it very very seriously.

[timr]

"A pivot should be a last chance "we got it wrong but we've got some money left so let's try something else" - not a matter of course."

Eh...perhaps "payroll" is a bad starting point for a pivot, but I think that if your product weren't selling, you'd be more eager to find a related product that did sell. Pivoting isn't a gratuitous thing, but neither is it a complete overhaul of your business model. Hence, the name: you change direction, keeping one foot firmly planted in your current business.

I think the devil is in the details of how you define "pivot" -- done correctly, it's just an intelligent reaction to new information. If you look at it that way, it makes no sense to avoid it.

[ef4]

> The principal disadvantage of B2B is that the long sales cycle greatly increases the time until you get feedback that your product sucks

Waiting to sell until after you've built something is just as foolhardy in B2B as in B2C.

The equivalent winning strategy in B2B is to pitch the idea to the first customers before it's even built. If you can't convince them to commit, you pivot. If you find excited customers, they become your close feedback through the whole dev process.

Atypical early adopters may steer you wrong, but that can happen in the consumer space too.

[bjelkeman-again]

Some days I just think my world, B2B but governments and multilaterals rather than businesses, is just too slow moving. Other days I think that it is really quite interesting to see that quite simple tech can be hard to implement in organisations that haven't understood tech to be important until recently.

It is nice though to move people from paper processes to mobile/SaaS/cloud and near-real time data collection and see the lightbulb go up. Feels decidedly light-side.

[wdewind]

> Feels decidedly light-side.

Possibly, but doesn't quite have the ring to it :)

[wlievens]

The big question is: how do you discover and identify a good b2b problem that needs solving in the first place.

[wdewind]

A lot of the "throw it up there and see what happens" movement comes from young engineers who literally lack the life experience to know what problems to solve. Given that scenario, and the intense pressure that comes from SV for young people to succeed, the approach makes sense, but there is a longer term, more considered approach to things. Especially for B2B startups, the best way to come up with an idea is to work at larger businesses and see what problems they are facing. Of course, if you are a young person who knows they want to start a startup, this seems like a roundabout approach, and one that requires a lot of faith. It's hard, and I see why people are attracted to "release, iterate, release," but I don't think it's the best approach.

This doesn't mean you don't iterate. A lot of the lean startup stuff is still useful to us (a/b testing for more focused UI etc.). But generally speaking, we know where the product is going, and our customers' needs, often better than them.

[wlievens]

Most people here mention "larger businesses". But aren't exactly those much more likely to buy their solutions from established software houses, for regulatory reasons, or higher guarantee of continuity? I don't see how a bank, pharma producer, shipping company or publishing house would buy software from an ISV...

[wdewind]

Just because you learn from certain businesses doesn't mean you need to start off selling to them. Many businesses start by meeting the needs of smaller businesses and work up to larger ones.

[NhanH]

PG is one of those who strongly advocates for "throw it up and see what happens". He is probably more influential to the movement than any young engineers, and he is decisively neither young nor inexperienced.

[jacquesm]

SV is but a very very small slice of the tech world and is not in any way representative, despite the fact that that is what you are hearing all the time. The linked article has a nice line about that.

What SV does have is a very large percentage of the successful internet start-ups. But there are so many more lines of business where untold billions are being made by companies that go for non-sexy non b2c approaches.

What works for YC and what works on the web is a very visible very thin slice of the software world as a whole. In a way you're making your life harder if you pursue that particular niche because even though that's where all the easy PR and the most visible success stories are it is also where the competition is fierce.

B2B is a lot less likely to make you billions. But it is more likely to make you tens of millions. So if you want to reduce the luck factor and increase your chances of success then b2b would seem to make good sense. It also works better if you will have to work without access to capital or a presence in a place like SV.

[YZF]

There's a big difference between an idea that makes it past many filters but you still don't know if it'll work and between a million random ideas that don't have a chance in hell in the first place.

You want to validate your business assumptions sooner rather than later and there's nothing wrong with that. You should also tweak your business based on the real world. Nothing wrong with that. Nothing really that new about that either. Other than that maybe Pivot is the new Agile?

[joeyo]

An VC only needs k of N start-ups to succeed, and it doesn't particularly matter which ones do. The high-variance approach ("throw it up and see what happens") may be optimal for the investor without being optimal for the founder.

[DirtyAndy]

Two ways I can think of. 1. You do a real job for a while. Work in a large organisation, see what pain points they have, which ones are probably similar to other businesses and which ones probably don't involve terabytes of proprietary data that they would never be able to shift to an SaaS solution (by never I mean politically not technically). And I don't mean working for tech firm. Be on an IT team for a pharmaceutical company, a food company, packaging company, logistics etc. Be open and offer to help people (outside of IT) and you'll be amazed what ideas they give you.

Way 2. Mix with people in the real world that work in the companies above. Listen to their problems, offer solutions, offer to pop in after work one day or on a weekend and look at their problems.

[freshhawk]

Got some great pithy advice about this a while ago: find something still being done with paper and fax machines.

There are a ridiculous number of them out there.

[GFischer]

There are some interesting legal barriers to overcome in some of those cases.

In my country, faxes are legally recognized as evidence, but email isn't, so there's a strong incentive to fax documents.

A law recognizing electronic signatures might help things, but it's still pretty cumbersome.

I tried to build a solution for "escribanos" - the U.S. approximate equivalent is notaries, but they're specialized lawyers actually - and the legal hurdles proved impossible to overcome.

Stuff that is being done with fax machines out of ignorance would be a better place to start, but there you have to face conservatism (an admittedly easier barrier than legal obstacles).

[DirtyAndy]

Add Excel spreadsheets and Access databases to that list. Best thing, someone else has already proven their is a need for the system and a working solution!

[PhantomGremlin]

That's good advice. In fact, this HN discussion has a "ridiculous" (in a good sense) amount of good advice.

The only problem is it's a lot easier to post, comment, kibitz, criticize than to actually do. It's nice to read the good advice here, but at the end of the day it's still necessary to do something useful in a startup. This isn't a criticism of your post, it's a general observation.

[YZF]

Some good ideas here already. The way I see it good products are born in the intersection of the industry problem space and the technical solution space. Often you will have people in some industry doing something without knowing there is a better technical solution and you have technical people unaware of problems their technology can solve. This is especially true for new technologies that enable new things that couldn't be done with older technologies. == "Disruption"

The best entrepreneur IMO brings a combination of the technical expertise with understanding of the problem, preferably a personal/deep understanding. If you want to understand specific business problems for some specific businesses/industries you need to read about them, talk to people from the industry and/or work in the industry. Some problems are generic and cut across industries. Some b2b problems are the same problems individuals have in performing their work.

Some problems are easy, e.g. have easy solutions, everyone knows about them. Some problems are hard, a lot of work to solve. Some problems are very niche/specific, no one knows about them...

[silverlake]

You work in that industry until you understand it intimately and develop connections.

[lifeisstillgood]

Speak to upper-mid-level managers in every enterprise who will go for coffee. Start narrowing down on the problems you hear. Be industry specific, rather than "generic" (a solution to a regulatory requirement beats "a calendar app"

In a month you will know which problems stand out

Start marketing around that problem, build an audience, evangelise something valuable.

Take your own good advice :-)

[AndrewKemendo]

You probably have to have actually done the job to know where the pain points are. B2B problems (that aren't also consumer problems) are not something you can easily find in my experience.

[wdewind]

Again, try working for a larger company and see what they spend a lot of time/frustration on. It's the same skill you'd use to spot consumer level opportunities. I'd say it's much easier, in fact.

[AndrewKemendo]

Agreed, definitely easier if you are doing your job right

[guelo]

Exactly. It's the same. You throw up an idea and start pivoting. If you have a more staid business model some startup will eventually find your niche and out hustle you.

[wdewind]

No, not really. In our (Justworks) case, our founder had to setup payroll, benefits and compliance for multiple companies (Adtuitive and Etsy) and so was intimately familiar with the problem when he started it.