How B2B Is Becoming Increasingly B2C2B
Written on 25 July 2021
The concept of B2C2B is not new. Venture capitalist, Tomasz Tunguz, wrote about it in 2015—six years ago! The idea is that an enterprise startup would acquire individuals within companies as customers first, who will then get their teams or the whole company to use the product. Business to consumer, then to business.
While B2C2B is not new, I feel it will become more common as a model for customer acquisition for B2B SaaS companies.
In the past, a procurement department might buy software for the company to use. But increasingly, we are seeing individuals within companies making the decisions on what software and technology the company should use.
Developers pick Twilio for their communications infrastructure. Designers choose Figma for the design and collaboration tool. Marketers and salespeople use HubSpot to work together. Operations people want to use Notion for internal documents.
And that makes sense. The people who are experts in their area and would be using the tool regularly can better decide which option is best for the company.
B2B software for individuals
B2B software is now not just built for teams or the entire company but also for individuals. Three things have increased the adoption of such software:
Single-player: Products like Figma and Notion provide value even when we are using them alone. We do not need to be using it with our entire team or company to benefit from it. The rise of side projects has amplified this trend. Designers, developers, marketers, and the likes are testing various tools even outside of their work environment. If something works well for their side projects, they might use it for their work. And because they have already used the product for their side projects, they can more easily make a case to get a budget to try the product at work. "I have been using this product for several months now, and it works."
Self-serve: Individuals can try many of these B2B products themselves, without having to go through demo calls or talking to a salesperson. Any developer that wants to try Stripe can simply sign up for a free account and get started in seconds.
Freemium: Freemium has made the adoption of such tools even smoother. HubSpot, supposedly an enterprise SaaS company, spent the last few years creating free versions of its marketing, sales, customer service, and operations products. Now any marketer, salesperson, or customer service manager can try HubSpot without having to ask their managers for a budget. This is the same for other popular products with a free plan like Zoom, Loom, Figma, and GitHub.
The easier it is for individuals to try the product, the more likely the B2C2B model will work.
Marketing to individuals
The B2C2B trend is also changing how B2B SaaS companies are marketing. They are no longer just selling to procurement people in big, boring companies or the VPs who will not use the tool. They are also selling to the end-user, who will become the champion for the product within the company. They are not just generating leads but also driving signups.
To acquire the entire team or company eventually, B2B SaaS companies would still need to depend on high-touch channels such as organizing events, getting analyst reports, having an account manager, and so on. But they can now acquire a big volume of individuals at scale through channels such as SEO, content marketing, and ads—then upsell them. And having this base of users will make the high-touch channels more cost-efficient because the users already know the brand and product and they can also help influence the buying process.
When I was at Buffer, whenever we launch a new feature on the paid plans, many existing users on the free plan would start a trial of the paid plans—much more than non-users. We hypothesize that users, even those on the free plan, are already familiar with the brand and product, so they would be more inclined to start a trial than someone unfamiliar with Buffer.
The other benefit of acquiring a big pool of individuals is that if they are using your product, they are likely not using your competitors' product. By getting them into your "ecosystem" as quickly as possible, you have a higher chance of acquiring their team or company eventually, as long as your product or service doesn't make them want to look for another alternative. If their designs are in Figma or their customer data are in HubSpot already, they would be less likely to move to a competitor.
Over to you
What do you think about this? Where might I be wrong? Let me know!