Chicken or the egg?

November 9, 2008 By Adam,

Over the past week we met with some really great entrepreneurs putting together some new businesses and web applications. Getting their business off the ground requires reaching a point of critical mass, marketing for both b2c and b2b. Here is the challenge, the chicken or the egg:

B2B drives revenue, but to get businesses to buy in you need to have a large volume of people actively using your website
People won't use the website unless there is enough businesses signed up

Take for example Yelp. You, as a user of the site, aren't going to find value unless there are enough companies listed on the site. A business isn't going to pay for a listing unless they gain access to a large number of eyeballs. So round and round you go. So which is it? Chicken or the egg? The answer is both. You need to develop a marketing and business strategy that builds both the b2c and b2b side simultaneously until you reach that tipping point; the point of critical mass. So how do you do that?

Freemium - offer a free version to get business into the process and build things up, up-sell them when the time is right
Empower users - incentives your early adopters to promote both the b2c and b2b side
User generated content - let your users create new b2b content
Marketing - build great campaigns for both sides, b2c and b2b (insert Digital Operative plug here)

The tough part is that your website needs to have a stronger focus for either the b2c or b2b component. Figure out your strategy in the long run. If revenue is going to be advertising based, then b2c may win out. If you are selling a SaaS, then b2b may take the spotlight. A homepage with a 50/50 split can be ineffective for both sides, make it 80/20. So 80% b2c 20% b2b or vice versa. Just because your homepage has a 80% b2c focus, doesn't mean you can't still sell businesses. In fact, it may be more compelling because they can understand the value to their customers. Remember, everything to everyone = nothing to anyone. Do one thing and do it great.