
What is an MVP for a B2B startup? - evrimfeyyaz
https://evrim.io/mvp-b2b-startup/
======
dantiberian
B2B encompasses a very wide range of buyers, with very different allowances
for risk. The article talks about what would be commonly known as Enterprise
Sales, which is marked by long sales cycles, high prices, and a lot of legwork
in selling. It is possible to sell B2B software where the buyer is a single
person within an organisation, or a small team.

Those are much easier to sell to, because there is a much smaller amount of
buy-in needed from the organisation as a whole. Because the stakes are so much
lower than in an enterprise-wide deal, an MVP may be perfectly acceptable to
your customers.

~~~
mstank
You can have an MVP even in enterprise B2B if the problem is very apparent and
easy to define, and the MVP is easy to deploy.

I've created an MVP for a B2B product and have success in selling it by making
it as easy as possible to deploy. This reduces the amount of stakeholders
required to sign off on the product. The key is to be able to deliver value
(solve a problem) without a huge man-hour investment on the customers end.
After demonstrating value, I can shift the focus to a deeper integration and
have more success because I have more people on my side to push it internally.

------
a13n
I think the author actually means "Enterprise B2B" when they say "B2B".

I run a B2B SaaS company. We sell to businesses. Most of them have 5-500
employees (SMB/Mid-Market). Last year we built a very simple MVP and quickly
started selling it.

If you want to do this too, the buyer and idea must be compatible. The idea
also has to be something the buyer wants.

Buyer: As far as I know, hotels aren't big on buying new, simple services from
startups. Try brick & mortar / mom & pop stores, startups, tech companies,
etc.

Idea: Tablets are a big startup cost. You're asking your first customers to
pay a lot more than ours did. Or you're taking a big loss. This immediately
makes it harder to get going.

Demand: Do hotels / guests even want tablets in rooms? What burning problem is
this solving, how did you learn that, and why is this a great, cost-effective
solution?

~~~
AznHisoka
As a guest I would love the ability to order room service/food through a
tablet, rather than calling the phone, and hoping the other person can
understand what I'm saying.

As a hotel owner, yeah, I'm not too sure... it might just be an additional
cost, and not worth the ROI.

~~~
a13n
Yeah, but you could achieve the same value with an app/website on the guest's
phone. Sure it's a tad more friction, but way cheaper and potentially worth
it.

~~~
AznHisoka
I would then need to know I could do that via an App. I guess if the hotel
left a message in front of my room/desk, then yeah it would be the same
effect. But then I probably would wonder if ordering through an app would
relay reliably to them. With a tablet, it feels more 'real-time'

~~~
jharger
I would also want to be sure that someone else couldn't order something to my
room. You'd need some sort of one-time use code/key or something, and then the
friction gets even higher.

------
wpietri
The funny thing is that every Lean Startup founder who delays shipping
struggles with excuses like this. Most customers in any market (consumer, SMB,
enterprise) do not want to take a risk. He's ignoring the important advice in
Moore's _Crossing the Chasm_ [1] and Blank's _Four Steps to the Epiphany_ [2]:
the people who will buy a very early stage product are a tiny fraction of your
total market; you have to aggressively find them.

That process is definitely different in an enterprise market. For whole-hog
adoption, giant companies will want a mature solution. So instead you find
ways to derisk it. Maybe it's a pilot program with a larger player. Maybe it's
proving out the technology in an SMB context. Maybe you just find one mom-and-
pop hotel who pays you not in money but in their time and data. Maybe you
start with a single floor or even a single hotel room into which you
preferentially book people who you think will be early adopters.

The M in MVP is for Minimum, and that applies not just to the product, but to
the context of use. You start as small as possible, just enough to test your
hypotheses. The smaller your tests, the faster you learn.

He makes another rookie mistake here: "I still need to buy the same number of
tablets to rent to hotels, and can’t even really discount the product that
much." Lean Startups are not cheap startups. It cost Toyota millions to build
the first Prius, but they did not sell it for millions. That's fine, because
the point of your early MVPs is not to cover the expenses. It's to learn
things, including about what people will pay. In Lean thinking you price based
on _value_ , not cost, and then work hard to minimize costs while maintaining
value.

[1]
[https://en.wikipedia.org/wiki/Crossing_the_Chasm](https://en.wikipedia.org/wiki/Crossing_the_Chasm)

[2] [https://www.amazon.com/Four-Steps-Epiphany-Steve-
Blank/dp/09...](https://www.amazon.com/Four-Steps-Epiphany-Steve-
Blank/dp/0989200507)

~~~
evrimfeyyaz
> The funny thing is that every Lean Startup founder who delays shipping
> struggles with excuses like this.

Honestly, that's the whole reason why I wrote that article. I'm struggling
with that thought as well, but I don't think you're completely right on that.

> Maybe you start with a single floor or even a single hotel room into which
> you preferentially book people who you think will be early adopters.

This is exactly the plan I'm going with actually. But still, sourcing tablets,
sourcing funds to buy them, and then developing an MVP takes time. It can't be
too simple that it will be detrimental to their guest satisfaction, finding
the balance is key, that's why the initial version is only room service.

> Maybe you just find one mom-and-pop hotel who pays you not in money but in
> their time and data.

Again, that's what I'm going after. Some people say that I should already
charge them, and finding hotels that would pay for that at this stage is a
waste of time, that's the point I was trying to make in the article. Finding a
hotel that will pay with their time and data is exactly what I'm going after.

~~~
wpietri
Ok? I'm glad you're doing more than is described in what you initially wrote,
but I can only respond to the thing you wrote.

I think these struggles are very similar to what people doing B2C startups go
through. Nobody has a fully marketable product on day 1. Early tests of the
value prop are key, and people do all sorts of things to prove that the value
really is sufficient to build a business on before they get cash in hand.

But I think it's always important to keep in mind that until somebody actually
does pay, it's all just a fantasy. And it's also important to keep in mind
that as entrepreneurs we really want to preserve the fantasy. You know your
market better than anybody here, and it's your money you're spending, so use
your best judgment. This could be the optimal way forward.

However, the inability to find early adopters could also be evidence that
there isn't really a market, that you're selling a nice-to-have. Or it could
be evidence that your company doesn't have the sales capacity to move the
product, even if you end up making something good. Until you actually make
some sales (and more importantly, recurring sales), you won't know for sure.
So every time you find a reason to delay that moment of truth, you should be
suspicious.

~~~
evrimfeyyaz
Thanks a lot.

> So every time you find a reason to delay that moment of truth, you should be
> suspicious.

I couldn't agree more with this. My worry is that this thought is going to
make me approach hotels a bit too early that will be a waste of time. Finding
the right time and the right stage is the key.

One thing that is not mentioned in the article is that my initial idea was to
develop white-labeled app for hotels that their guests could download. I got
someone to introduce me to a hotel owner, and he got me into his hotel. At
that stage, I didn't have an app. I'm a software developer, but I didn't even
know how to develop for iOS. After they agreed, it took me about one and a
half months to learn iOS development, develop the client and develop the back-
end. They kind of lost interest. Without getting into much detail, there were
other issues with that idea, evident from my other visits to some other
hotels, so I pivoted into this. And this time, when I go to a hotel, I want it
to be at a stage where it's useful to the hotel, and where I can collect ROI
data.

> However, the inability to find early adopters could also be evidence that
> there isn't really a market, that you're selling a nice-to-have.

I definitely agree with that too. I talked to hotel managers, and they are
mostly very excited about the idea, but until they pay me, there is no way of
finding out for sure. In the end, in-room tablets might not be a thing, but
hotels will need to use technology to understand their in-house guests better,
personalize their experiences and automate many things that the staff do now,
I have no doubt about it.

~~~
wsy
IMHO the key is to not think about scaling and economics when you initially
try out stuff. You need to find one friendly hotel manager who puts one tablet
in one of their rooms, and have reception staff ask the guest on checkout how
they liked the tablet offering. That is enough for you to get a feedback loop
going. If after a few development cycles your product is exciting enough that
the friendly hotel manager considers paying for it, then you think about how
you can make it work for that one hotel (from an economic perspective). Then
you approach your second hotel.

Of course, it makes sense to have a plan about scaling, but it is a mistake to
already put everything in place to be prepared for scaling.

(Disclaimer: working in a startup, but not a founder)

~~~
evrimfeyyaz
That's an interesting point of view, thanks a lot!

------
balls187
The premise of the article is flawed.

It's a hardware startup that is selling to Hotels. There are barriers to
entry, but nothing inherent to being a B2B startup.

Bootstrapped B2C hardware companies face similar challenges.

Hotels are only one business vertical, there are hundreds of thousands of
business verticals, some of which won't require as much upfront product
investment to gain traction.

It boils down to this: hardware startups need funding to get off the ground.

Here is my unsolicited advice:

Find yourself a business co-founder who has experience in the hotel
hospitality space. If you can convince them of the value of your idea, and the
sign on, their job is to find a few hotel chains to do a paid-for pilot. This
person could even be your first investor.

In lieu of that, raise a friends and family round to generate enough funds to
get the hardware you need, and target a subset of rooms at a hotel (luxury
room suites). You won't have to buy nearly as many tablets, and their patrons
already expect a premium experience.

~~~
smel
> friends and family round ? Are you kidding ? not everybody is privileged to
> have family or friends with money to invest.

~~~
dewey
So? It's not like he said that's the only way.

------
crdoconnor
A pattern I've witnessed on some enterprise B2B startups is that they start
out with the founder having a pre-existing relationship with a decision maker
at a company.

That guy is going "my business has this problem" over a beer and the founder
goes "I can solve that for you" and they work out a deal. The founder builds
the MVP that solves the customer's problem and incorporates so they can get
paid.

The founder iterates and continues getting paid and at some point uses the
cash to hire one of those expensive salespeople who knows how to chase down
decision makers.

~~~
tnr23
Exactly the way we started our SaaS about a year and a half ago and currently
reached 68k Euros MRR with a 50% profit margin.

I am pretty sure this pre-existing contact was a great helper. Far beyond
being the first customer.

------
jonbarker
I've seen B2B startups become successful by doing B2B consulting, finding
something they can replicate aka productize, and create scale that way.

~~~
erispoe
Can you give some examples?

~~~
Radim
We did that with B2B consulting in machine learning (rare-technologies.com) =>
transitioned to B2B products (scaletext.com, pii-tools.com).

Actually, we started even one step earlier, by working on open source
(Gensim), no money involved at all.

------
harryf
This problem gets even worse with enterprise sales. How to validate a market
or use any of that "Lean Startup" wisdom when the sales process for a single
customer is 6 months+, requires multiple meetings and getting 10's of the
customers staff, across multiple departments, on-board? It's very hard to find
any single, concrete measure of success.

~~~
boffinism
Try adding a hardware product into the mix. Not only do you have to deal with
super long sales cycles, each iteration of your product takes months, if not
years, to release. You can't just whack together an MVP and make it better
over time unless you're happy to keep doing upgrades in the field. B2B
hardware products and the "Lean Startup" ethos are very hard to marry!

~~~
aaavl2821
Or in biopharma, where selling a product requires 10 years and $200M of r&d.
The model is to sell your company or go public long before that point

In this case, your "customers" are venture funds and pharma companies, and
your MVP is a well thought out experimental plan. You get more customer /
investors by doing the experiments and using that data to design another
experiment

They tried adapting the lean startup to life science with mixed success. For
biopharma as a specific life sci sector other models work better than lean

------
hobofan
The article reads like the author still hasn't tried selling it. B2B MVPs work
just as well as B2C product. Sometimes they work even better with the correct
client giving big $$$ to build some features with priority.

From a startup founder who also had a "We will perfect the product and then it
will sell itself" mentality, which was one of our major mistakes: Start
stelling! Now!

Even with a perfect product the sales process will only get only 20-30%
easier. Even with the perfect product you will need the same optimized sales
pitch and the same optimized sales presentations.

~~~
jclos
> Sometimes they work even better with the correct client giving big $$$ to
> build some features with priority.

You're spot on with this. I worked in a small B2B startup for a bit over 18
months and that was always our route to market. Develop the stem of the idea,
polish it enough to make it convincing in a demo, and approach a big company.
They sponsor development by buying licenses, and in exchange they get a say in
the development process, the features we prioritize/drop, etc. The result is a
win-win: they get a product that fits their needs, we get funding and
credibility.

~~~
evrimfeyyaz
> Develop the stem of the idea, polish it enough to make it convincing

Well, this is exactly what I'm working on. What I was trying to say in the
article is, many times in B2C startups, you can create an MVP that is very
unpolished, it takes a bit more polishing in enterprise B2B.

------
hboon
Actually, it's not uncommon for enterprise sales to involve signing an
MOU/contract without the software being ready. You don't even need an MVP.
Maybe a POC or strong reference customers of related nature.

~~~
chatmasta
Yep. A client of mine is approaching it this way now. I’ve been building the
prototype/MVP for the past couple months. The founder (my client) is an ex-
lawyer and the customers will be law firms like the one where he worked. The
product pricing will be in the range of $50-100k per customer. The sales
strategy is to pitch the early customers with the MVP, get them to commit
$50-100k for the mature version of the product delivered in two months, and
use that money to fund further development. We talked to some companies that
successfully approached b2b sales in the same way. I’m interested to see how
it works for us.

------
nartz
"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."

Not worth the expected return? This sounds like a case of you wanting 'instant
gratification' and to be making huge amounts of money from the start, which is
bogus. With a few customers you will:

1\. Be getting the use cases, bugs, feedback directly from your customers

2\. Show you can get _some_ funding and are building something people will pay
for (or if they drop you, you'll understand why)

3\. Have numbers, knowledge, and customer referrals which will VASTLY help
getting more customers. I.e. when you are in the sales pitch, saying "X hotels
have been using this for a year, and have generated Y additional sales, and
have learned Z metrics about their hotel guests" etc.

~~~
evrimfeyyaz
As I mentioned in the article, being a solo-founder doesn't help.

There are two things I can do with my time.

1\. I can go ahead and talk to as many hotels as I can, halting development.
At this stage, there isn't even anything that is actually working. I have
dealt with hotel sales before, finding decision makers, convincing them, etc.
take a lot of time.

2\. I can work on finishing the MVP (which is only room service).

Going with the first route, the expected return is way too small. Let's be
optimistic, and say one in 30 hotel managers thinks this is super cool, and
decides to pay for this thing way in advance. Talking to 30 hotels, arranging
meetings, getting them to respond, etc. would take months.

Instead, I can get it to a point where I have an MVP that can be put in a
hotel room, which can calculate the ROI it brings, which I can use to justify
the cost of the product. This is the path I chose.

(I obviously talked to hospitality professionals to get their feedback, but I
wasn't selling them.)

------
levisegal
I work at a travel B2B SaaS company, and we roll out MVP products to our
clients all the time. I think the key difference between selling to businesses
and consumers is the appetite for risk.

So assuming you have a good product, you have to consider two things:
commercial terms and SLA. This is a delicate balancing act when you're trying
to shop your MVP. You don't want to underprice because implicitly you're
saying the product isn't ready for production. You don't want to overprice,
and set expectations too high. You also want to be careful about what kind of
level of support you're agreeing to with your product. If it's an MVP, are you
going to drop support after 6 months if your business can't support itself?

Good businesses consider these things before they sign-on for an MVP product,
make sure you have good answers to these questions.

~~~
evrimfeyyaz
Thanks a lot, I definitely agree.

------
sharemywin
you probably should have at least a chain lined up to work with. or find a
var/re-seller that focuses on hotels. unless you are a hotel owner you don't
know what their hot buttons are.

for instance if one of your features is guests can see their bill in real-
time. that might not be a feature to the owners. they might want the extra
revenue of customers not knowing their bill and getting cought up in the
experience. the point is you don't know.

your adding features you want not the person buying. again unless you are
working with a hotel owner or have sold similar systems or were one in the
past.

------
Blackstone4
There's an interesting point to be made about B2C vs. B2B products.

There's a thesis out there, that in order to test the market you can put up a
simple website adverstising your yet-to-be-made product and see if you get any
subscribers. I feel like this applies to B2C products and low ticket B2B
products (i.e. $10 per user per month).

The playing field for a serious B2B product is very different and the MVP
needs to be in good shape in order to win and keep clients.

~~~
louisswiss
I strongly disagree with this comment (needing an MVP). For a serious B2B
product you need a team, sales process and social proof/track record that
convinces the customer you will deliver on your promises.

But above all, you need a product which solves a tangible, significant problem
for the customer!

If the willingness of a customer to sign a prelaunch sales agreement comes
down to the quality of your MVP, something has gone wrong in your sales
process and the customer is just looking for an excuse to decline.

~~~
siddharthdeswal
I think parent is saying something similar to you, but you've just laid it out
in more detail. They didn't say the other things you've mentioned don't
matter. They said that the product can't be a scrappy MVP.

~~~
louisswiss
Perhaps. I understood _' the MVP needs to be in good shape in order to win and
keep clients'_ as meaning _' in order to win (and keep) clients, you need a
(good) MVP'_.

I was objecting to the idea that you need an MVP at all to win clients
(although obviously retaining them is a different story).

------
jonwachob91
Requiring a customer to spend hundreds of dollars to use an MVP doesn't sound
like an MVP...

Evrim doesn't clarify what his product is that needs a tablet, so it's hard to
offer any specific advice. _BUT_ he should be finding a way to test his
product with pen/paper, employee or customer smart devices, or other equipment
that the hotel already owns.

~~~
cialowicz
The “V” in MVP stands for viable. If someone isn’t willing to pay for it, then
it’s not an MVP.

~~~
jonwachob91
Before the "V" comes the "P". His "P" is the software that is on the tablet,
not the tablet itself (at least that was my impression). The hotel needs to
pay for the software, not the tablet.

------
larrydag
It's unfortunate but most of the B2B marketing is done at business conferences
I imagine. It's not cheap to setup a booth and I imagine the success rate is
not very high.

~~~
siddharthdeswal
On the flip side, B2B conferences and tradeshows exist because they're able to
give vendors face time with people they couldn't easily meet otherwise.

It's not cheap, the success rate isn't high, but it can be cost-effective.
I've spent 20k USD on a small 6x3 feet booth space, but also gotten 40 to 50k
USD over the course of a few months from conversations that were initiated at
the booth.

Another point to factor in is that enterprise customers by nature have low
churn... and that makes the RoI work out in the end.

------
isalmon
It's more of a B2B2C rather than B2B. Also it's a hardware-first startup, so
it's going to be hard to iterate, no matter how good or bad the MVP is.

------
PanMan
Not one link in the article to Automated Hotel? Even if I would consider your
solution, I can't find it? That does seem like bad sales...

~~~
evrimfeyyaz
I actually have limited time working on the development side, so I didn't
create a website for it. At this current stage, the chances of a hotel
decision maker coming across the solution and deciding to buy it seemed very
low compared to the time I needed to put in to put together a decent website.

And I just wanted to rant, I didn't expect it to get this much attention on
Hacker News to be honest :)

------
at-fates-hands
If anybody doesn't know, MVP stand for "Minimal Viable Product." It's not
listed in the article.

