B2B Consulting: Can Consulting Help You Build and Validate a Business Faster?

Maybe the most challenging part of the customer development process is being able to get enough face time with prospective buyers.

It’s challenging because it means:

If you can’t do that, your business will have a hard time gaining momentum.

Overcoming Inertia with B2B Consulting

“Speed of learning creates speed of growth.”Jason M. Lemkin, Entrepreneur and Investor

Now, what if there was a way to drastically cut the time it takes to get this information from organizations?

Although they’re often kept separate, B2B consulting and tech entrepreneurship don’t have to be mutually exclusive. In fact, consulting may be the fastest way to learn about a market or a business opportunity.

In its simplest form, product-market validation means…

  1. Finding 5 early adopters in organizations;
  2. Pre-selling them on a standardized pilot project;
  3. Delivering on the value sold;
  4. Iterating on feedback;
  5. Reaching product/market fit;
  6. Leveraging case studies to attract additional customers.

Seeking out consulting engagements within a single vertical (e.g. construction, banking, etc.) allows you to do customer discovery while working, map the organization, build trust and relationships with influencers, and hone in on their specific pain points. All that while actually getting paid for work.

If your expertise is related to the product or technology you’re hoping to build, B2B consulting engagements give you a first crack at validation. Can you (at least) get paid by organizations if you solve their problem manually?

B2B Consulting: Can Consulting Help You Build and Validate Your Business Faster?
Can B2B Consulting Help Speed Up Product-Market Validation?

No Idea, No Problem with B2B Consulting

Once you’re in the organization, you’ll have the opportunity to ask questions, test hypotheses, map processes, and dig into their business problems.

With several clients in the same vertical, you’ll also be able to learn about the commonalities between client accounts, map the spending, and understand the rationale for selecting specific vendors or solutions.

Casual chats will help you uncover both explicit and implicit problems; the problems business stakeholders are aware of and actively looking for solutions for, and those they may not be aware of.

Keep your eyes out for the most painful problems, those with a high potential impact on the organization and a buyer with budget and buying authority.

B2B Consulting: Productized Services vs Technology Products

Whether you’re looking to turn your B2B consulting into a productized service – a value-added, systemized, “done-for-you” service, packaged as a product with a defined scope and price – or software, the key thing you’re looking for is repeatability.

Are there ways to provide the same value…

  • …to different organizations?
  • …to different departments within the same organization?
  • …in a repeatable manner – monthly, quarterly, yearly, etc – to the same organization?

Starting off with a service business will help you understand how to reach the buyers and create an effective distribution strategy.

In B2B, more proximity and face time with buyers and organizations means faster learning, testing and validation.

B2B consulting allows you to generate income, explore multiple organizations at once, and build relationships.

If your goal is to bootstrap your business and keep your costs low, validation through B2B consulting may very well be your fastest path to product-market validation.

More on B2B Consulting

How to Find Business Opportunities by Analyzing B2B SaaS Pricing Pages

There’s a lot that can be learned by studying B2B SaaS pricing pages.

Once you’ve homed in on a market, you can find business opportunities by analyzing the technology landscape, looking at what business customers already buy.

You can speed up product-market validation by identifying gaps in the product offerings on the market and capitalizing on those opportunities. This is what this post is all about.

What You Can Learn by Analyzing B2B SaaS Pricing Pages

B2B SaaS pricing models are usually representations of the companies’ business models.

The features, plans, price points and omissions all say something about the way the business delivers value to its customers. In other words, every line in a pricing table is intended to get a certain reaction from prospective customers.

By going through different pricing pages in the market you’re targeting, you can learn about:

  • The features that are most-valued by customers;
  • The “whole product”, or the features that customers expect;
  • Customer segments and the functionalities they value and pay for;
  • Typical engagement length and churn rates.

How to Analyze B2B Pricing Pages

You’ll need 3 things to successfully analyze pricing pages in your market:

  1. A clear definition of your vision: When you know what you’re trying to achieve it’s easier to define competitors and solutions worth including in your analysis;
  2. A list of the players in the space: You can find B2B SaaS products competing in your space (or related spaces) using Google or by querying sites like AngelList and Crunchbase;
  3. An idea of which businesses are successfully selling in the space: For this analysis, it’s best to focus on businesses generating actual money. You can use directory sites like Capterra, G2Crowd or GetApp to get a feel for a business’s customer base. Alternatively, some businesses might have published revenue numbers you can use.

Select the 10 to 12 most relevant products’ pricing pages. For each of these pages, we’ll look at value metrics, expected features, plan differentiations, add-ons and price points. It’s all below.

How to Find the Value Metric in a Pricing Table

A value metric is the main reason why customers buy a subscription (e.g. number of users). It’s also often the reason (e.g. ‘we need more user accounts’) why they upgrade to a higher-priced plan.

In the context of a multi-axis pricing model (e.g. number of users and features), it tends to be the main axis along which customers make purchase decisions.

As an example, project management tool Wrike (below) has both feature and seat differentiations for each of its plans:

B2B SaaS Pricing Pages – Wrike Pricing Page
Wrike’s Pricing Page

To find the value metric, look for the main benefit that fluctuates in either quantity or quality from one plan to the next.

Knowing what the value metric is tells you what businesses expect to pay for (e.g. users), and how they evaluate purchase decisions for this type of software.

How to Define “the Whole Product” with B2B SaaS Pricing Models

Typically, the common functionalities across the different pricing plans are part of the whole product – the things that must be put in place just so your startup can be considered a valid vendor by your prospects.

B2B SaaS Pricing Pages – Wistia's Standard Features
Wistia – Standard Features

Those features are important enough to be listed, because they have an impact on the buying decision, but they’re not strong enough to get customers to upgrade to a more expensive subscription.

You’ll probably have to build all of these features just to be able to compete with the specific product.

How to Analyze Plan Breakdown

A well-designed pricing page helps prospects quickly self-qualify:

Pricing Pages – Leadpages Upgrade Path
Leadpages – Upgrade Path

A well-designed pricing page also makes it easy to understand the transition from plan to plan, by making the differentiating features and benefits crystal clear.

For the above example (Leadpages), a company would upgrade from Standard to Pro for:

  • Unlimited A/B Split Testing;
  • Online Sales and Payments;
  • SMS Campaigns;
  • Email Support.

They would also upgrade from Pro to Advanced for:

  • Advanced Integrations;
  • More SMS Campaigns;
  • Priority Support.

SMS campaigns seem to be a distinctive feature (possibly the value metric) that helps move customers from one plan to the next. For larger organizations, deeper integrations, advanced support and personal customer success drive upgrades.

Plan differentiations give good insights as to what different types of organizations and buyers value.

Are There Add-ons?

According to ChartMogul, roughly 20% of B2B SaaS businesses sell unbundled add-ons on top of their pricing plans.

B2B SaaS Pricing Pages – MailChimp Add-On Feature
MailChimp – Example of an Add-on Feature

Add-ons are features or feature groups that may only be valuable to a subset of the customer base. Those customers are generally willing to pay a premium for theses features.

These features hint at the existence of a sub-segment within the business’s core market. They’re opportunities to build niche products.

How to Analyze the Business Model

In SaaS, price sets perception. If the product is expensive, it may appear premium. If the product is inexpensive, it may attract a large number of smaller customers.

By displaying monthly prices first, the price point looks lower. By defaulting to annual plans, the price point looks higher. This can be a form of pre-qualification.

On top of the additional cashflow, annual plans help lessen the impact of churn or cancellations. Businesses heavily promoting Annual or Quarterly plans often do so to reduce a high churn rate.

The price points and plans most highly recommended say a lot about what a business’s ideal customer profile is.

SaaS Pricing Pages – Survey Monkey's Default Yearly Plan
Survey Monkey – Annual Subscription by Default

Bonus Tip: Revisit Past Versions of B2B SaaS Pricing Pages

You can use Wayback Machine to revisit past iterations of pricing tables. This will allow you to see what businesses have learned about their business models.

  • If a feature was free and it’s now included in a paid plan, it usually means that it was driving upgrades;
  • If something was part of a paid plan, but it’s now available for free, it often means that it was a strong incentive to get prospects to sign up.

This information is valuable and can be used to define a good product positioning.

How to Find Business Opportunities from B2B SaaS Pricing Models

Once you’ve analyzed the different pricing pages in your market, you can start thinking about how to compete with the established players.

To overcome the status quo coefficient and get businesses to adopt a new technology product, you need to find an area where you can be 10x better than the known alternatives.

To find those opportunities, ask yourself:

  • Are there ways to deliver significantly more value along a similar value metric?
  • Can you offer the value metric for free (or at a discounted rate) and bring forth a new value?
  • Can you turn an add-on feature into a standalone product for a niche market?
  • Are there ways to offer more value by creating a product focused on the specific needs of a sub-segment?
  • Can you turn a differentiating feature into a core part of your business?

There are a lot of ways to position your product by focusing on a niche and emphasizing different value drivers.

Understanding what businesses pay for helps you focus on proven value propositions to speed up your product-market validation and inform your B2B SaaS pricing strategy.

More on B2B SaaS Pricing

How Much Time Do You Need to Reach Product-Market Fit in B2B?

How to Reach Product-Market Fit – Lean B2B: Build Products Businesses Want

This is a post about a missing part in Lean B2B: Build Products Businesses Want. I stumbled on this concept a little after book publication and would have loved to include it to explain product-market fit.

I’ve never seen a (B2B) company get to anything much under 18 months.Steve Wood, B2B Serial Entrepreneur

Imagine you start a B2B business tomorrow, get to product-market fit within the first 3 months, and like an Instagram, a WhatsApp or a Pinterest, business growth explodes in just 12 months. Amazing, no?

But what if it doesn’t?

In paid SaaS apps / B2B businesses, it takes time to interview customers, build a MVP, validate a need and get to product-market fit. And usually, it’s a lot more time than the founders ever imagined…

Finding P-M fit is harder than I thought.Ben Yoskovitz, Lean Analytics Co-Author

Time to Product-Market Fit (TTPMF)

Until you reach product-market fit, your startup is in limbo. It’s hard to raise capital, everyone commits to a leap of faith. That’s why TTPMF, or the Time it takes to reach Product-Market Fit, is such a key concept.

Introduced in 2013 by entrepreneur Andrew Chen, TTPMF is what decides if your business succeeds or fails.

In his words, if your plan for TTPMF exceeds your funding runway, you’re dead. If your TTPMF is more than 1-2 years, your startup will implode: fatigue sets in, the window of opportunity shifts, investors get disengaged, team and employees start getting excited about other companies… you run out of money and energy. Not good.

Getting to product-market fit takes longer than expected, but must be less than 2 years. That’s why it’s important to be lean and aware of every option you have to speed up product-market validation. Even in the early days when it feels like you have months and months of runway ahead of you.

8 Ways to Shorten Time to Product-Market Fit

Here are some of the tactics covered on this blog to speed up product-market validation:

In Minimize your Time to Product-Market Fit, Andrew Chen suggests copying the fundamentals of an existing business at product-market fit and changing 20%. It’s another strategy worth considering to decrease your TTPMF.

The ideal time to enter a market is at the Chasm, when the market need has been validated and the opportunity has been partially de-risked.

Having been at the receiving end of business copy when I was working at LANDR Audio, I can tell you that it sucks losing leads to imitators, but it’s part of the game.

When survival is on the line, you’ve got to do what you’ve got to do.

Whether you decide to copy a business at product-market fit or build your own, you’ll want to shorten your TTPMF. Figuring out how to take a product to market is key.

Pivots happen. Worst-case scenarios come to reality, so you’ll need to plan for the worst and give yourself reasonable time to pull through. It will be difficult, but stick it out. As SaaStr founder and B2B entrepreneur Jason Lemkin says, you’ll fail in SaaS if you don’t commit to spending 24 months to achieve initial traction.

More on Time to Market Startup