Innovation Expert Daniel Almodovar on Why Companies Can’t Just “Wait and Buy” Startups


Innovation Expert Daniel Almodovar on Why Companies Can't Just Wait and Buy B2B Startups

Daniel Almodovar leads the business validation practice at World Class Center Innovation and Design. There, his process includes documenting the initial business idea, extracting and prioritizing hypotheses, validating problem, solution, market demand, profitability, measuring, learning and adjusting the solution. Depending on the client’s interest, they can provide training, mentorship or externalization of the validation.

In this exclusive interview, we talk about why companies need to innovate (and can’t just buy startups):

Etienne Garbugli (EG): Could you tell us about your work at World Class Center Innovation and Design?

Daniel Almodovar (DA): We are part of Altran, a leading firm in engineering and R&D. Within the company, we represent the global team for innovation and design, addressing projects that cover the whole lifecycle of innovation: trends & technology radar, customer insights, creative problem-solving, invention, prototyping, business validation, UX/UI design, and product realization up to manufacturing of small series. We also have transformation programs for organizations to boost their innovation potential. Our clients are medium and large corporates from all industries, with national and multinational footprints.

I participate in projects of nearly all the practices. I particularly enjoy cases in which we run an invention project that generates new promising concepts and then we continue working in their business validation, moving them towards reality.

Altran - World Class Center Innovation and DesignAltran’s World Class Center Innovation and Design in Madrid

EG: How did you get into the innovation space initially?

DA: I had been part of the Vodafone Group R&D team for many years and, there I had not only executed many innovation projects but also tried different innovation methodologies, to the extent that I became an internal consultant. It was a natural transition for me to move to Altran’s innovation team.

What I like the most in this career change is the opportunity to live innovation in so many different sectors: finance, insurance, chemical, industrial, energy, automotive, aerospace, urban services, consumer goods… This helps you realize that innovation shares common issues everywhere.

EG: What are some of the methodologies you use in your work?

DA: I mainly use the Lean Startup framework, Business Model Canvas, some Design Thinking tools, and a methodology called Synectics, which provides a strong basis for successful human interaction in creativity and problem-solving.

Rather than being tied to a single methodology, I believe that what works is to have a varied toolkit from which you select the right tools for every project and client need. For instance, sometimes I have also used the Jobs-to-be-Done framework, Google Design Sprint, or the Innovation Games set.

EG: What are some of your best practices when it comes to innovation?

DA: Innovation is carried out by people. For me, the ideal innovation project is when the people that participate in the project live a personal transformation and acquire a new mindset that can apply from that moment on in their future projects – and even in their lives. This happens, for example, when they get to experience the benefits of understanding their customers, releasing their creative thinking or validating the critical assumptions behind what they want to build.

In the same way, it’s essential for people to understand purpose. Why are we doing this innovation project? Why are we using this tool or doing this activity? How will all this contribute to a goal? The innovation facilitator must always make sure it is clear for all participants.

The facilitator also has to explain the differences, in terms of mindsets and rules, between the operational world and the innovation world. This prevents the premature killing of promising concepts because they’re applying the operational mindset. The key is to manage the transfer from the innovation space to the operational space.

EG: How important is innovation and innovation management to organizations today?

DA: What comes to mind may sound very cliché: the “VUCA” environment, the increased frequency of disruption in every sector, the decrease in companies’ lifespans… You simply cannot afford to ignore innovation. And at the same time, you must operate your core business, what currently brings in the money. I agree with most innovation thinkers that carrying out innovation and operation in parallel is the biggest challenge that companies have to overcome nowadays.

EG: How do you see it evolve over the next 5, 10 or 15 years?

DA: I think that, during the next years, we will see a gradual process in which organizations will learn from success cases and will get better in being “ambidextrous”, executing their core business and exploring new businesses at the same time – with effective transfer from the second activity to the first.

In addition, I’m also very curious about the evolution of internal vs. external innovation, i.e. on the one hand, internal innovation projects or intrapreneurship; on the other hand, open innovation challenges or engagements with startups (which is so popular today and for some companies seem to replace internal innovation). I think that both have pros and cons and that the right approach is a mix. Actually, the binary division internal vs. external is quite simplistic, and changes when you start including other dimensions such as ideation and implementation (see model below).

In-Out Innovation Approaches for when to Build vs Buy Startups
In-Out Innovation Approaches

EG: What are the main challenges faced by innovation experts in the industry today?

DA: If I wanted to make a joke based on what I have experimented frequently, I would say that the fact that nearly every company applies a reorg every 6-9 months! This changes the points of contact for innovation and/or freezes innovation projects due to re-prioritization of activities.

More seriously, the answer would be related to the previous questions, i.e. companies applying only the operational mindset or taking care exclusively of short-term results and fast return on investment – indeed, the most common complaints I hear from participants in innovation projects are “I don’t have time for this as I’m very busy with the daily operations” or “This activity is not in my objectives”.

Another challenge would be companies thinking that they don’t need any innovation system or process and that they just have to “wait and buy” the innovation that happens externally.

EG: What do you feel are the challenges of innovators operating in a B2B environment?

DA: Many challenges are common to the overall innovation space. However, you must be very aware of the specifics of B2B, such as the fact that you have “fewer shots”, or that you have different client-people within the same client-company requiring different value propositions or that experimentation must coexist and not disturb the ongoing business. All this is very well explained in the Lean B2B book. :-)

EG: What value did you get from reading Lean B2B?

DA: It was really helpful for me. I had read most of the Lean Startup literature (Eric Ries, Steve Blank, Ash Maurya, Cindy Alvarez, etc.), but I was missing a comprehensive explanation of the specifics for the B2B space. In Lean B2B, I found confirmation of many of my previous thoughts or intuitions about applying Lean Startup in B2B, as well as many new clarifying and useful ideas. It is really well structured both in the overall chapter distribution/narrative and in the checklists, tables, sidebars, tips that every chapter includes. I bought the paperback edition and it is now full of pencil marks and underlines, pointing to pieces of knowledge that I have used in my projects.

If I had to choose one powerful idea I extracted from the book and soon internalized, it would be the fact that Lean Startup in B2B is strongly linked to strategic selling and must consist of building a trust relationship. Many other concepts or pieces of material in the book have become part of my personal toolkit, such as the “jury”, the “money map”, “Value = Benefits-Costs”, the interview templates, or the tips for first pilots, case studies and discounts.

EG: How have you been using the ideas from the book?

DA: When I got the book I was actually running a project consisting in mentoring a client’s team through a Lean Startup process in the B2B space, so it was a great help to reinforce the B2B specifics beyond the general Lean Startup framework. Afterwards, I have used the toolkit I obtained from the book when running any project or initiative that involves B2B. This refers not only to projects with external clients but also with internal clients (e.g. to help Altran R&D projects go to market) or within our own innovation team (e.g. to expose our new innovative offerings to our customers).

EG: What innovation advice would you give to organizations operating in competitive industries today?

DA: I would advise not to let innovation happen just as a spontaneous activity that depends on the personal initiative of a few employees; instead, start creating and nurturing an “innovation system” like the Innovation Model Canvas, something that continuously fuels the company with ideas for new businesses and validates them so that they can become a reality.

EG: Thank you for your time.

DA: Thank you.

Innovation Consultant Rene Bastijans on Uncovering Your Product’s True Competition

Innovation Consultant Rene Bastijans on Unlocking Growth for Lean B2B Startups

Innovation consultant Rene Bastijans had his dream job. In 2011, he was working in the small corporate R&D team of the largest education company in the world researching emerging technologies, developing prototypes for next-generation learning products and running workshops with intrapreneurs.

The company, Pearson, had been hit hard by the arrival of the iPad and other e-readers. They wanted to figure out what to do with new technologies.

Fast forward to 2015, Rene had moved from London to sunny Portugal to join Beta-i, the number one entrepreneurship and innovation organization in Lisbon, where he led their corporate startup accelerator Protechting. Out of a passion for The Lean Startup, he started teaching early-stage startups how to apply Lean Startup principles to validate their business models.

Rene now helps Software-as-a-Service (SaaS) companies understand how to build and sell products customers will buy through Jobs to be Done research. The insights gained from the research allow his clients to uncover revenue potential, create effective marketing messaging to make their products stand out and generate demand for their products in sales conversations that will win them new business.

I really enjoyed our discussion. In it, you’ll learn:

  • Why businesses often fail to implement an evidence-based innovation process.
  • Why companies are – more than ever – feeling the pressure to innovate.
  • Why Rene focuses on two frameworks: The Lean Startup and Jobs to be Done, and how both frameworks can work together.
  • How to use Jobs to be Done to uncover the wants and struggles of your target customers.
  • Who truly determines the value of your software.
  • How to rethink your product’s competition.

You can listen to the full interview below:

Etienne Garbugli (EG): What are some of the methodologies you use in your work?

Rene Bastijans (RB): I am pretty much focused on two. What I use from The Lean Startup is the fast experimentation, helping people create experiments that are lean to replace guesses about the business model or the product. From Jobs to be Done, I like the customer interviews. It’s recreating the customer purchase timeline from what prompted them to start looking for a solution working towards the purchase. I like experimentation on the one end and customer interviews talking about the events that led up to a particular product purchase.

EG: Does the Job to be Done framework help feed the experimentation or is it more the reverse?

RB: I would say the the outcomes from Jobs to be Done research fit in very nicely in The Lean Startup. That’s why I like these two a lot. Also, Design Thinking addresses the question what jobs could our products help the customers get done. With Lean Startup, it’s more about should we build the product in the first place? The outcomes or outputs of Jobs to be Done research fit in nicely into experimentation. Are we addressing the right job here, the right thing? People tend to be solution-driven. They start off with a solution and then try to mend it to a customer segment instead of thinking are we addressing the right struggle in the first place?

EG: That’s a great way to sum it up: Lean Startup is should you build it, design thinking is what should you be building and Jobs to be Done is why would you build it.

RB: It will help you understand the issues we want to address as opposed to assuming somebody has a problem and therefore we have a solution. It’s really understanding that, first of all, we can go and experiment and find out whether what we believe is true is actually true.

EG: How important is innovation and innovation management to organizations today?

RB: If you ask anyone, whether it’s a CEO of a startup or the leadership team in a big organization, everyone will say that innovation is important, of course. We need to be innovative, we need to do innovation because startups pop up in our industry and eat our lunch. We want to defend ourselves against those. But, when it comes to giving people the time and space to implement an evidence-based innovation process you can see it all falls down. They actually don’t believe in it. They don’t give it the attention it deserves.

If it’s a public company, they have to think about their shareholders and make sure they hit their targets for the next quarter. People think very short term and, of course, innovation takes a long time. It’s not very predictable. The biggest struggle that these companies have is that they are very good at executing on the current business model, but they are not that good at thinking ahead and giving innovative ideas the space to maybe become the next product or service.

EG: In a way, investing in other lines of business that may not be showing returns already?

RB: That’s right. Innovation is not treated differently than the current business. They don’t have the people in place. They don’t have the patience. They don’t have the metrics to measure something more innovative. They’re using the current metrics that they have for the cash cow – the main line of business – and try to apply those to innovation projects. That’s when they fail and they say, look we had this lapse for two years and nothing has come from it. What have you guys been doing? We have just been wasting money. People get disappointed very quickly because they really don’t understand it.

EG: What do you feel are the challenges of innovators working in a B2B environment?

RB: From my perspective, it’s a different setup and it’s very complex in terms of decision-making. It’s not as easy as going to a consumer who has just bought an app. You must find out who can make the decision to buy. Who has the authority to actually get a project going? There’s buyers and there’s users and people need to have a way of reaching the right people and getting that started. That’s probably the biggest challenge. They might not actually understand the process in those companies because they have never spoken to anyone in those companies. They don’t know how those purchase decisions are being made. The last time the business bought a piece of software, how many people were involved, how many layers of management had to actually sign off? What’s the budget? All this intel they can get by speaking to people within these businesses.

EG: In other words, figure out what people’s wins are with your software and what value it brings to the company? I always find interesting how different those wins can be for different stakeholders or for the employee themselves. It tends to not even always be the software itself but what is around the software that they value.

RB: Yes, and the value of your software to the buyer or to the end user is actually determined by them. Can they make progress? Can they overcome their struggles? Can they get to where they want to be with that software?

Let me give you an example. I work with a company in the eLearning space. The CEO believes that this software that they are building and selling is about sharing with your team. What turned out is that the buyers were struggling so much with having time to do their work that they were “hiring” this online learning software to be able to push people to learn by themselves so that they could actually have time to do stuff that really matters to them.

They want to get work done. There are a lot of employees leaving all the time and it takes a lot of time away from the decision-makers. An online platform that can onboard a new employee or a new sales rep is really attractive to these people; it actually buys them time. It is not about knowledge-sharing or features, it’s about getting time back so I can do the things that matter to me.

EG: How have you been using the ideas from Lean B2B?

RB: I’ve been using the customer interviews and the advice on finding early adopters from the book. I have got this idea of who my customers might be, whom might have a budget or whom might be trying some solutions already, but they’re not really getting me anywhere. How do I find these people? Something that’s actionable and practical is really helpful. I am still sharing to this date. I have got other resources now but, you were one of the contributors to give people real hands-on practical advice on how to get started looking for people I want to be helping.

EG: Do you find that problem interviews and Jobs to be Done work together hand in hand or are they for different purposes?

RB: They are very complimentary. Jobs fit in very well in the beginning when nobody is sure what kind of struggles they want to help solve. It also helps to have some questions similar to yours that you can ask in conversations with your prospects and early adopters. I pick and I let my customers also pick the questions that they think would help in getting the most out of these interviews.

EG: What innovation advice would you give to organizations operating in competitive industries today?

RB: The key for me is in the word competitive. I would like people to rethink competition and markets fundamentally. Because competition is not only restricted to the products that look similar to yours; it is defined by customers using it. Whatever they are using today that helps them with the struggles they have to make progress is your competition. It doesn’t have to be the product that’s in the same category. It can be calling my friend or pen and paper.

Understand what your customers use today, that’s your real competition. Unless you can help them make progress, they will not give up what they’re currently using. Secondly, I would say to become a bit more customer-centric by really spending time studying the customer’s lifecycle and how they experience their jobs and work. As opposed to saying: we have been in business for 20 years… we know what they want, we will build this thing and they will buy it.

EG: Thank you for your time.

RB: Thank you.

How Cobrainer Used Consulting to Bootstrap and Validate an Enterprise Product

Amelie Spath on scaling Cobrainer as a Lean B2B startup

Cobrainer is a machine-learning data analytics company focused on the analysis and visualization of expertises in organizations.

What started out as a project for academia in Munich, Germany soon found traction in project management, product collaboration and innovation management.

Now, their clients range from Deutsche Bank to Boehringer Ingelheim. Although Cobrainer co-founder Amelie Spath had worked for large enterprises before, she had to learn how to target enterprises from the outside to push the company forward.

I caught up with Amelie as her team is re-focusing the product and preparing for scale.

I got a lot out of our discussion. In it, you’ll learn:

  • How Cobrainer transitioned from being an academic project to targeting large enterprises
  • How they got their first customers and how they motivated early adopters to work with them
  • How the business got its start bootstrapping and the challenges they faced
  • How they conducted problem interviews to identify the best customer segments
  • How they raised funding and pivoted the product to be able to build a scalable business
  • How they focused on understanding the enterprise reality and the impact it had on their growth

You can listen to the full interview below:

Etienne Garbugli (EG): How did your team go about selecting a product/market opportunity initially?

Amelie Spath (AS): Three of my co-founders are researchers. We always found that for any research project at Universities you need an interdisciplinary team. How do I find the expertises I need to make my project a success? There was really no mechanism to learn from past projects, which expertises they combined to make it work and which people have those expertises.

My co-founder, Martin, who is a machine-learning scientist said, well that’s a problem we could actually analyze with technology. And this is how we started out analyzing all the research projects at our University here in Munich and creating an expertise map. And then we pitched the whole thing at a conference where there were a lot of enterprise managers from large companies in the audience. And one of them told us: “Hey, what you’re doing for academia is actually really interesting for the enterprise… but they’d pay you money. So, why don’t you pivot and go in that direction?”. That was pretty much the start of the company.

EG: How did you go about validating the opportunity?

Amelie Spath (AS): This manager became our first customer and then we found a second customer, and with these two, we started developing the product. There was a lot of collecting requirements, understanding the enterprise context, getting feedback, iterating with the users and this is how we got started. We built the first version of the product with paying customers from the start. They took a big leap of faith.

EG: How did you motivate early adopters to work with Cobrainer initially?

Amelie Spath (AS): So, they really had this problem of not knowing which expertises were in the organization, how to best leverage all of this implicit tacit knowledge that is there. But employees cannot access this (data) and there’s no real strategic way or no direct way to collaborate with people you don’t know in your organization. They realized that with digitization, new business models and shifting dynamics in the industry, they really had to do something. They could also position themselves as thought-leaders trying new technologies like machine-learning. So, they really felt like okay, we take a leap of faith here but it’s extremely relevant for us.

EG: What were the core challenges faced by Cobrainer in the early days of the business?

Amelie Spath (AS): We started out bootstrapping and basically being revenue-financed from the start. On the one hand, that was great for us because it forced us to deliver a product that is useful to our customers. But on the other hand, we were really prone to accepting customization requests. It destroyed our focus because, when you have to make revenue, you have to make revenue. And if you have to stretch or go a bit outside of what you actually want to do to make those revenue, you do it. The real challenge was feature creep. Machine learning and AI, it’s a powerful technology. Almost everyone we talked to had new ideas of where to apply it or new use cases that we could do with expertise analytics.

Initially, we were thinking: “Hey, this is awesome. There’s so much opportunity, so much potential”. And then at some point we were like, “No. Hey stop! This is not going to work.”. And then our mantra became okay, what is the smallest product we can build.

EG: How did you know that Cobrainer had found product-market fit?

Amelie Spath (AS): We realized that the very core thing that we do is the data analysis and the expertise intelligence. We understood that this should be the core product. But then there came all of this enterprise customization on top. It was a full-stack product and then we decided to modularize it, build an API only for the core analytics engine and everything else was now coming from third parties. And now we’re considering that we have product-market fit. Before that, there was too much customization to really say this.

EG: What value did you get from reading Lean B2B?

Amelie Spath (AS): I think one of the key things is really how to properly do user testing in B2B. How to avoid lying to yourself when people say “interesting” and really drilling down on understanding the processes of the organization. The buying mechanisms, the buying centers, all of these things in the enterprise and how to engage customers even when you don’t have a product.

EG: How have you been using what you’ve learned from the book?

Amelie Spath (AS): I think one of the things we used the most extensively is the user journey. We conducted around 50 problem interviews. We had ideation sessions and design thinking workshops with the team to map out user flows, processes and come up with solution ideas around our technology. We went back to these 50 people to collect their feedback. It was now a solution to address their problems. And so we really full-on went through this process from the book.

EG: After having been through it yourself, what validation process would you recommend to entrepreneurs starting in B2B?

Amelie Spath (AS): I recommend for other machine-learning / AI companies wanting to go in B2B to really invest time and brains in understanding the enterprise processes and legacy systems used by your target users because that’s the reality your users have to work with. And even though companies are fed up with it and want to change, they cannot change it overnight. It takes probably two years to replace a legacy system. So, in the meantime, you either don’t work with that company or you accept that reality and make the product work in their context.

EG: What advice would you give to new entrepreneurs starting in B2B today?

Amelie Spath (AS): I definitely encourage new entrepreneurs to go talk to people in the enterprise. Even if you don’t know them, go to conferences, talk to relevant people, cold call if that’s the only way. Don’t be afraid to show a product even if it embarrasses you. Don’t make too many assumptions about how the people in the enterprise are, what they want or how their day is. Really understand the reality of enterprises; what’s a matter of life or a matter of fact in the enterprise.

EG: Thank you for your time.

AS: Thank you.

How Jupl Creates Better Healthcare by Building Products for their Customers’ End Users

Alan Brannigan on validating Jupl as a Lean B2B startup

I first became aware of Alan Brannigan’s work a year and half ago. At the time, his business was called Vigil Monitoring. Late last year, the company rebranded as Jupl.

Jupl provides independent living solutions for elderly people. It enables care from family members and professional carers through data analytics using triggers, looking for trends and setting up alert notifications. Their customers are fairly large enterprises like care providers, health insurers or medical alarm emergency response teams.

The company has been growing extremely fast this past year. After the successful launch of their Samsung Jupl watch at Cisco Jasper’s Mobile World Congress in March, they’re now expanding outside of their original market of New Zealand into the Australian market.

I’ve learned a lot from our interview. In it, you’ll hear about:

  • How Jupl got its start and how they raised their initial funding
  • How they partnered with large organizations early on and the impact it had on their growth
  • How they realized that their service was B2B2C and the challenges that came along
  • How they navigate politics and get to influence the appropriate stakeholders
  • How they design products for the enterprise
  • What being Lean in the enterprise means for them

You can listen to the full interview below:

Etienne Garbugli (EG): How did you guys go about validating the opportunity – validating the product and validating the market fit?

Alan Brannigan (AB): We came at it very much from a device perspective first; maybe that was my failing given my background as an electrical engineer. We knew it was meant to be a cloud platform, but it was hard at the time because in the healthcare and tele-care there’s quite a lot of standards that you have to adhere to. So even the gateway, the box that has to collect all that stuff in the home, there was nothing off the shelf that we could see that could do everything we wanted to do and also comply to these standards. So, we actually had to build it and we probably went a little overboard with that.

One of the big learnings is that we were taking feedback from our customers which were these enterprise organizations, expecting that they knew what they wanted. And not realizing that, we’re B2B2C, we actually have to go to their customers, the end users and figure this stuff out because these enterprises, they don’t know anything about Lean Startup.

We had assumed that the specifications they were giving us were what was actually required, and moving in, it wasn’t. So, about a year in, we reset everything. We ditched the whole idea of building the wearable, but we still had to build the box.

On that journey, we came to the realization that our customers’ customers were in two part. There’s the end-user, who in this case would be the elderly person, and then there’s two groups of carers. There’s family members who for the most part are children. And then you’ve got your professional carer which might be a registered nurse, a GP or community care service provider. And so, what was the benefit for them?

It’s very, very hard to get continuous funding and make that work with the ever-eroding cuts to the health sector. And so, we were looking at what’s a sustainable model we can build this off, not only for us but also for our customers. So, we’ve actually started in that private payer sector. The children are paying for the most part, they just subscribe for these services, there’s 24-hour call center monitoring if Mom and Dad need assistance, they push a button or there’s some sort of alert generated. So, we really locked in on that. What’s in it for the carer? Or what’s in it for the child or family member?

We really did a lot of experiments and interviews around what a carer would want and we landed on that. And then bringing it back into the enterprise, we then had to provide an evidence-base to various stakeholders within those companies to show that actually this is what the industry wants and this is the price point, etc.

EG: How did you go about motivating all these people to work towards the same objectives that you guys were trying to achieve?

AB: We’re starting to learn now that the one who controls the balance sheet from the business is the one you need to win over really. And also, the one who’s in charge of implementing the IT systems. And so, you have to tick the boxes from a data safety and security perspective and also provide a strong business sense. So, it’s a typical group of 5-6 people you’ve got to win over and I think a lot of what I do now is very much commercial and critical lobbying within those organizations to get them over the line.

EG: Ok, so in that case if I’m understanding well, the bar for creating the whole solution is actually quite high. There seems to be a lot of things you guys have to build just to be considered as a possible vendor by these organizations?

AB: We’re involved in the startup community here in New Zealand and people who are developing apps very much B2C-focused, they don’t see what we do as particularly Lean. But in the world of enterprise, it is. There’s an education process where our design team who are focusing on the B2C are actually working with the product team and the marketing team within those organizations to teach them how to iterate. There’s a big education part. And there’s a willingness for them to get there – a lot of these organizations recognize they need to change.

Presentation of Jupl during the keynote at Cisco Live in June 2017 (Clip starts at 1:02:48)

EG: What brought you to Lean Startup in general if you’re operating in a world where that’s traditionally not been the norm?

AB: This is where I came across your book. Because we naively came in and said we’re gonna disrupt this industry and we’re going to do it in our own style and fashion. I had worked in B2B and very much in an electronics background that provide OER technologies into aircrafts. I recognized that we need to help clients in different ways so I was looking at all sorts of education avenues. And Lean B2B did seem to be a good fit, I gave your book to a number of the stakeholders within the company we were working with.

EG: What value did you get from reading Lean B2B?

AB: I think it was really just breaking it down and recognizing that there would be longer cycles. I need to iterate the business model with the CFO or the balance sheet owner, as much as I do with the marketing team. Recognizing that the system that they have is currently depreciating to zero and so what’s the compelling reason for them to change as much as the person who is excited about the new service and problem they can solve for their customer.

I gave them the book and said this is actually how we’re going to go about it. It helped me articulate to them what we’re trying to do rather than just coming in as a fluffy startup that was gonna throw every buzz word at them. It took it from a different approach completely.

EG: In a way, you were able to position yourself really as a partner in their success and walk them through the process to get them to adopt the solution?

AB: Yeah and I think by running them through it, it showed them that we were familiar with the issues that they were facing as much as just what overall the solution could provide for their business. And one of the recurring things, particularly with the champion that you get who is more often than not the person in the transformation business. You need to provide me with a collateral that I can sell this with within my own organization.

And once we did that, the CFO really just wants the numbers and you can make the numbers work if you got that guy over the line. The worst thing that you can do is go over them – if I learned anything is don’t go to the CEO. I’ve been introduced at the chairman and CEO level – that would have then a project killed because I didn’t work with the executive team who are ultimately responsible for delivering the project. A CIO killed it in one company and I had the head of independent living on a national scale kill it. It was a done deal at board level and CEO level, but then I got them off the side.

EG: Looking at that after 4.5 years, how would you approach the validation process differently if you could start over again today?

AB: I would spend more time with those coffees and pastries with the team before I even wrote one line of code or did anything. And just make sure we got all that right, make sure that they understand what the organization is trying to achieve. There might be one group within that business that has understood, but they’ve got to get other people over the line. That they also understand that we’re not going to deliver a final product in one go for a release. So, I would just spend more time doing that and really understanding the commercial and political nuances within an organization. You really got to understand the relationships between these people. Who doesn’t like who, who got passed over on that promotion from the other person. All that stuff’s relevant – ultimately people are people and we all have our biases and strengths and weaknesses.

EG: What advice would you give to new entrepreneurs starting in B2B today?

AB: I would say first understand the cadence of the industry you’re in. It just might not be the industry or the world you’re currently in. And understand that the scale or the inertia that’s required to overcome within the company that you’re selling to. And it might be that you’re selling into small or medium enterprises and that’s fine. Or it might be you’re selling into Blue Chip or Forbes 500 organizations. And if you’re transparent about… and that’s the other thing, just don’t bullshit anybody. You don’t have to share how weak your balance sheet is, but you explain the issues you’re facing and demonstrate that you understand the issues that they’re facing and usually there’ll be a way forward.

EG: So, in a way it’s building that trust relationship with your stakeholders?

AB: Yeah, absolutely. If you break that, you’re done. Cause you do need all those stakeholders over, and they all have their own reasons.

EG: Thank you for your time.

AB: Alright! Thank you for the book, it really helped.

13+ Conferences for B2B Startup Founders Seeking Growth in 2017

It’s sometimes hard for B2B startup founders to see the forest for the trees. They get consumed by a business problem and can’t seem to find the solution.

Conferences are a great way to take a step back. Interacting with other founders, specialists and experienced entrepreneurs can lead to fresh insights, new opportunities and a renewed mindset to accelerate growth.

Sometimes, seeing what’s out there is all you need to find a solution.

To help founders find the best conference for their needs, I put together a list of the best events in B2B:

General Conferences for B2B Startup Founders

  • SaaStr Annual – February 6-8, 2018 / San Francisco
    Founded by entrepreneur and investor Jason Lemkin a little over 4 years ago, SaaStr Annual brings together more than 10,000 SaaS Founders, VCs and Executives. It’s a great event to network, make deals, and discuss software as a service (SaaS), fundraising, enterprise sales, customer success and metrics.
  • Dreamforce – November 6-9, 2017 / San Francisco
    Dreamforce is Salesforce’s annual event. It was one of the first B2B conferences and it’s, by far, the largest B2B event with 170,000 participants, 2,700 sessions and lots of corporate money. It’s a good place to learn, but a better place to make deals.
  • SaaStock – September 18–20, 2018 / Dublin, Ireland
    The European SaaStr. It covers a lot of the same topics as SaaStr (Sales, Customer Success, Growth and Funding) with a lot of the same speakers, but it’s a great opportunity to network with European founders and investors.
  • Revenue Summit – March 7-8, 2018 / San Francisco
    Organized by SalesHacker, Revenue Summit focuses on sales, marketing and the intersection between both disciplines. With a strong emphasis on sales processes, account management and technology, it’s a good opportunity to go a bit deeper into B2B sales.
  • Marketing Nation Summit – April 29-May 2, 2018 / San Francisco
    Marketo’s 4-day conference covers all things marketing with a strong focus on B2B. It’s an interesting alternative to Dreamforce especially if your startup sells to marketing departments.
  • Business of Software – September 18-20, 2018 / Boston
    A single-track conference kept small on purpose, the Business of Software conference focuses on creating quality networking opportunities and teaching participants how to build better software, be better entrepreneurs and grow more successful businesses.
  • Inbound – September 25-28, 2017 / Boston
    Hubspot’s conference has long attracted thousands of marketing and sales professionals. It’s a great place to network with now more than 19,000 attendees and learn about B2B content marketing, marketing automation and account-based selling from some of the leading authorities in B2B.
  • B2B Rocks – September 28, 2017 / Sydney, Australia
    Interesting newcomer. B2B Rocks organizes events in Paris, France and Sydney, Australia. It brings together different crowds with a strong focus on local experts. At the event, you’ll learn actionable tactics to grow your B2B SaaS.
  • Hyper-Growth – September 25, 2017 / Boston
    Another new event in 2017, Hyper-Growth is Drift.com’s conference. The event is held on the first day of the Inbound conference (also in Boston). It attracts a similar crowd, but Hyper-Growth focuses more on marketing and customer-centricity than the Inbound conference.

B2B Conferences Around Pain Points

Many B2B startups have created their own conferences around their customers’ pain points. If you share these challenges, or wish to dive deeper into expertises like customer success or content marketing, other great conferences are available for you:

Customer Success

B2B Content Marketing

Industry Events for B2B Startup Founders

Events and conferences are shortcuts to communities and target markets. To speed up product-market validation or increase your growth rate, you can attend your target market’s events or visit your customers’ watering hole.

Whether it’s the HR Technology Expo if you’re targeting HR professionals or the DIA 2018 Global Annual Meeting if your market is pharmaceuticals, networking with your target market is always a great way to create new opportunities.

No matter your goal, conferences are all about networking opportunities. By asking yourself, what kind of people will this event attract and seeing how that fits within your strategy, you’ll make sure to always have return on investment when you attend an event.

53 VC Firms and Angel Investors to Fund Your B2B Startup

If you want money, ask for advice, and if you want advice, ask for money. – Unknown

When raising money for your B2B startup, it’s important to realize that, beyond terms, investors don’t all bring the same value to your business.

Some investors will be very involved while others will not. Some will open gates for you, help recruit top employees, show you the ropes and remain solid partners all throughout the life of your startup. And again, some will not.

In B2B, the best investors understand how B2B and B2C startups differ, they have connections in your industry and know what it takes to win in B2B. Those investors can significantly improve your odds of success.

To help you find the right partners, I’ve put together a list of Angel investors and partners at leading VC firms actively investing in B2B SaaS. This is a list I wish I had when we raising money at Psykler.

Angel Investors Investing in B2B Startups

Name Location B2B Investments
Alex Khein London, UK Automatic, Talkdesk, MediaCore
Andy Yang Toronto, Canada TribeHR, Kera, Fuse Powered
Auren Hoffman San Francisco Aardvark, Flowtown, Rapleaf
David Cancel Greater Boston Area Rapportive, Help Scout, Appcues
David Hauser Las Vegas Intercom, Buffer, Unbounce
David O. Sacks San Francisco Palantir Technologies, Yammer, PayPal
Dharmesh Shah Greater Boston Area Hubspot, Appcues, Buffer
Francois Gaouette Montreal, Canada Taleo, Airborne Mobile, Amilia
Francois Gilbert Quebec, Canada Taleo, Coveo
James Geshwiler Greater Boston Area Influitive, TimeTrade
Jean-François Gagné Montreal, Canada Element AI, Planora
Jerry Neumann New York City Taleo, Simple, DataHero
Jim Moran Greater Boston Area Paydiant, MixRank, Edocs
John Landry Greater Boston Area Unica, docTrackr, Jingle Networks
Magdalena Yesil San Francisco Salesforce.com, 3Ware, Securify
Mitch Kapor Oakland Optimizely, Twilio, Asana
Rasool Rayani Victoria, Canada Unbounce, MediaCore, Versly
Robert Shaw New York City Box, Streem, Revolve Robotics
Roham Gharegozlou San Francisco Intercom, ToutApp, Zozi
Ty Danco Greater Boston Area Crashlytics, CardMunch, Incentive Targeting
Victor Belfor San Francisco Influitive, MixRank, CodingTechnologies

Venture Capitalists Investing in B2B Startups

Name Location B2B Investments
Adam Rothenberg New York City Kustomer, Fundera, CrowdAI
Ajay Agarwal Palo Alto Optimizely, Kiva Systems, Symphony Commerce
Brian Christopher Yee San Francisco Box, Appirio, AuditFile
Brian Jacobs San Francisco SuccessFactors, Yammer, Veeva
Bruce Cleveland San Francisco Marketo, Totango, Amplero
Byron Deeter San Francisco Twilio, Involver, Bizo
Chip Hazard Greater Boston Area Mattermark, Crashlytics, MongoDB
Christoph Janz Stuttgart, Germany Zendesk, Geckoboard, Typeform
David Nault Montreal, Canada Lightspeed, Unsplash, Chronogolf
David Skok Greater Boston Area Hubspot, TribeHR, AppIQ
Devdutt Yellurkar Palo Alto Zendesk, Wave, Rethink Robotics
Eric Vishria San Francisco Amplitude, Contentful, Confluent
Ethan Kurzweil San Francisco SendGrid, Twilio, Skybox Imaging
Jason Green San Francisco Salesforce.com, SuccessFactors, Box
Jason M. Lemkin Palo Alto Talkdesk, SalesLoft, Pipedrive
Jean-Francois Marcoux Montreal, Canada Salesfloor, IMMUNIO, mnubo
Kevin Spain Palo Alto Veeva Systems, Zettics, VigLink
Manu Kumar Palo Alto Twilio, Indextank, Boomerang
Mark MacLeod Toronto, Canada Freshbooks, Context.io, Engagio
Mark Suster Los Angeles Burstly, Gravity, Invoca
Mike Cegelski Montreal, Canada Taleo, iBwave, Beltron
Mike Volpi San Francisco Zuora, Confluent, Optimizely
Neeraj Agrawal Greater Boston Area Amplitude, Optimizely, Yesware
Peter Fenton San Francisco Zuora, Zendesk, Optimizely
Rob de Heus Almere Stad, Netherlands Box, BlazeMeter, Streem
Scott Sandell San Francisco Workday, Tableau, Coursera
Simon Chong Toronto, Canada FreshBooks, Influitive, ScribbleLive
Stacey Bishop Palo Alto Hubspot, ExactTarget, Box
Tae Hea Nahm San Francisco Marketo, Engagio, Talkdesk
Thomas Korte San Francisco Heroku, Buffer, Periscope Data
Tomasz Tunguz San Francisco Dremio, Expensify, Looker
Vas Natarajan San Francisco Atlassian, Lightspeed, Qualtrics

I expect this list to grow and evolve over time. If you see any mistakes or have suggestions to make, just tweet at @leanb2b.

Why B2B Startups Should Target SMBs First, Not Big Enterprises

Through Lean B2B: Build Products Businesses Want, I get to talk with a lot of smart and ambitious founders.

They’ve either begun by building a MVP or by doing customer discovery within their relevant network, and because their end-game is enterprise, the opportunity only seems to make sense to large organizations or they’re hoping to gain legitimacy with key lighthouse customers, they decide to go enterprise-first.

Although large companies like Taleo and Vontu have been built enterprise first, my advice to founders is always to start smaller by targeting small and medium businesses.

Here’s why:

  1. The learning cost is higher: In the enterprise, there’s more steps just to be able to have meaningful discussions: you need to get through the door, understand the buyer groups, the decision-making process, the industry and build a relevant network.
  2. You front-load risk: Investors–especially in B2B–don’t typically want to fund customer development. It’s likely that everything you do prior to landing your first few customers will be pre-funding, on your own dime.
  3. You need a longer runway: The longer the sales cycle, the longer it will take to land your first customers, and the more cash you’ll need to tough it out. To survive, you want to reduce the time it takes to get early sales as much as possible.
  4. It’s harder to gain momentum: As a B2B founder, your chance of success is related to the proximity you’re able to have with your early adopters and your ability to react/adapt to their feedback. It’s much harder to get fast feedback loops going in the enterprise where stakeholder groups are larger.
  5. You’ll likely have to build too much: As Atlassian Head of Design Karen Cross said, in enterprise, it’s often about designing for the 100%. Without understanding the whole product, you won’t get customers to truly buy in.

Going enterprise-first is just riskier; it takes longer to build a base of revenue and get the metrics you need to raise funding. In most cases, it’s enterprise or bust.

At the time when I joined Psykler, they had a working product, several mid-to-large businesses in the pipeline, and the basis for a customer development panel. We had 10 months of runway and were committed to enterprise-first–as the software needed large sales teams to truly be valuable.

Screenshot of the Psykler Complex Sales Dashboard

The Psykler Complex Sales Dashboard

We had to retain our early customers, reach product-market fit and raise capital just to survive.

As fast as we thought we could get there, we needed a significant acceleration event to succeed.

In the end, it didn’t happen and we ran out of cash.

To go enterprise-first, you need sufficient runway to reach product-market fit, get early sales and raise money. If you don’t, your startup is probably already dead… and you just don’t know it.

Selling to small businesses is a great way to start a business. You can go up-market anytime the business has been validated.