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What is an MVP for a B2B startup? – Evrim Persembe

Unexpectedly, there is a conversation going on about this article on HackerNews.

As a B2B startup founder, most conversations I have with other startup founders of B2C startups come to a point where they say “You should just develop a very simple MVP, and sell it to a few hotels.” When they see my half-baked prototypes, they mostly say “You can already sell this!”

Of course they all have good intentions, and for a long time, I tortured myself with these thoughts too. Am I just too scared to sell? Am I not able to control my perfectionistic tendencies?

At Automated Hotel, we’re developing an in-room tablet for hotels that allows their guests to request services, and helps them analyze guest behavior. The prototype I’m working on only allows guests to order room service, and provides some ROI data to the hotel. After a few months of development, I’m almost there.

But is this good enough to be sold? I don’t doubt that there might be a few hotel executives that are willing to bet on this, and sign up at this very early stage at a discounted price, but contrary to the belief of many others, this is really unlikely, and it’s not worth spending too much effort on considering the expected return.

At the same time, as we’re going to be providing the tablets to the hotel, even if they sign up for a prototype with fewer features, the tablet costs are the same. I still need to buy the same number of tablets to rent to hotels, and can’t even really discount the product that much. I still need the money to buy the tablets, or at least get enough investment that will provide enough cash to do so at loss for the short-term.

Most advice is for B2C startups

With a B2C startup, you can easily put together a landing page, start collecting e-mails. Be active on social media, share interesting content that your prospective customers might like. You can create a half-baked prototype, and if you get ten people to try it, you can already see how well it works.

But what many people don’t understand is, these methods don’t work with most B2B startups. For example, the person who is going to be making the final decision to buy the in-room tablets are mostly C-level executives. These people don’t go around putting in their e-mail addresses on websites, and sign up for products that cost tens of thousands of dollars a year. The buying processes are long and cumbersome. They don’t really make rash decisions, either they have to be feeling that they are really missing out by not having a certain thing (“because everybody else has it”, like websites) or you really need to justify the costs. I know this because I ran a hotel consultancy company in Dubai between 2013 and 2015. Making cold calls every day, going to events to network, trying to find out who the decision maker actually is… It is a lengthy process.

So, recently I stopped putting myself down for not being able to get to market as fast as the B2C startups around me. Being a solo-founder already slows things down (if you’re interested to partner up, I’d love to hear from you), and an MVP for a B2B startup is not the same as an MVP for a B2C startup, contrary to the belief of most people.

Update: As pointed out by some people on HackerNews, I’m definitely mostly talking about “enterprise B2B,” and Automated Hotel is also partly a hardware startup. So, this doesn’t apply to every B2B startup to the same extent.

Featured image from picjumbo.

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