Last month, Forbes Contributor and Author Alejandro Cremades, wrote an article entitled, If You Answered Yes to Any of These Questions Your Startup Will Get Funding. (See article in our May Recommended Reading here)
This is a great article and I highly recommend you read it. Alejandro discusses 10 questions that startup founders if they can answer Yes to, are likely to acquire venture capital funding.
For those of you looking to sell to business customers (aka B2B), I would like to take a look at 4 of Alejandro’s questions and what will be required to be successful in a B2B context.
Do You Have The Best Team To Execute? Do You Have a Track Recording of Achieving Milestones?
Having a strong team is critical to the success of any B2B start-up.
Potential investors will want to have confidence that your team is capable and highly driven. A highly capable team is what can make even an average idea a great success.
What does this mean for B2B Start-ups?
You need to instil confidence in potential investors by really highlighting the strengths and capabilities of your team. Therefore, be sure to:
- Show the ability to come challenges
- Demonstrate how team members have successfully run companies before
- Call out the experiences team members have had in operating in corporate environments and have been successful in negotiating deals and achieving complex sales
To further increase your chances of funding consider establishing an Advisory Board.
Do You Have Product Market Fit?
Attaining product market fit is one of the most crucial and also most challenging requirements for start-ups to achieve. Achieving product market fit is essential for attaining Series funding.
What Does This Mean for B2B Startups?
Achieving Product Market Fit is no small feat. The dynamics of business-to-business markets creates even further challenges. Hence it can take considerable time and effort to achieve. Here are some key considerations and steps involved to achieving Product-market fit in a B2B context (Please note: There is a great deal involved with tackling each of these:
- You must develop a detailed understanding as to who the BUYERS in the industries and markets you are going to pursue. Who are the buyers? What are their strategic priorities? WATCHOUT: You must demonstrate to how your product/service offering will enable them to meet their objectives. This is critical to gain initial corporate/enterprise sales let alone gaining scale! If start-up is developing a revolutionary or disruptive product that is completely new to your target industry, demonstrating the link to buyer priorities could pose as an even more critical and also more challenging task
- Steps you will need to undertake to achieve
Product Market Fit include:
- Identification of key decision makers (i.e. The Buying Group)
- Discovery of buyers’ strategic priorities, requirements and challenges
- Development of Business Customer Solutions (meeting Buyer and User Needs)
- Buyer Enablement to Drive Sales
Do You Have a Scalable Business Model?
As Alejandro points out in his article, later and bigger rounds of funding are reserved for the scaling and expansion of businesses that have a sustainable business model. However, in the early stages, your start-up may have to do things in the beginning that do not scale so that you can achieve the BUYERS and funding.
What Does This Mean for B2B Start-Ups?
Some of the critical activities that you will need to undertake in order to develop solutions that will be sought after by corporate/enterprise customers include:
- Customer Advisory Board
- Strategic Customer Reviews
- Customer Development interviews
While these activities require a significant amount of time and effort upfront, they will provide you with the knowledge and confidence to develop the product and Go to Market strategy to enable your start-up generate momentum and initial sales to develop a scalable profitable business model.
WANT TO KNOW MORE?
Check out www.listeninnovategrow.com where you can access a range of resources including articles, videos, podcast interviews, toolkits and more!