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

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 Product-Market fit is harder than I thought.Ben Yoskovitz, Lean Analytics Co-Author

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.

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.

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.

How to Leverage Your Team And Advisors to Build Credibility in B2B

There are many ways to build credibility for your startup, but the fastest and most effective way is to leverage your team’s network or to recruit advisors who have already earned the respect of your prospects.

With the right expert on board, it is possible to sell a product on credibility or social proof alone.

When we decided to target the employer brand market for my last startup, HireVoice, we spent a lot of time looking for great advisors.

We were looking for employer brand thought-leaders who had established credibility, influence and a wide professional network. We were lucky to be introduced to Mario Bottone.

Mario was a marketing veteran who had played a significant role in the development and growth of online job boards Workopolis and Monster. He had a large focused international network, was active in the industry and had been teaching marketing for McGill’s prestigious MBA program for over eight years.

In just a few weeks, he was able to help us understand the market opportunities, identify the players and open many doors that would have remained closed if not for him. Having his name on our presentations gave our company credibility, which we were able to leverage successfully.

Finding the right advisor can really help warm up the market to your offering. With the right professional network, it can also significantly speed up market adoption.

How to Work With Experts to Build Social Proof for Your B2B Startup

One of the most promising companies in America. – Forbes, on enterprise survey company Qualtrics

How much credibility do you think a quote like this would give to your startup?

A recommendation from Forbes, Forrester Research, Gartner or another well-respected industry analyst can help burst open the doors of the enterprise for your startup.

For any mature market, there are experts who have worked hard building a network, establishing credibility and gaining influence over your prospects. Since most of them are consultants, they’re usually trying to get found. Working with these experts can help validate your business model, point to emerging market needs and build tremendous credibility.

Although these experts will not do something that negatively affects the personal brand they’ve built over the years, with the right incentives, they can be made to care about your product.

Innovative and outspoken industry analysts love to get in early on industry-changing technology because it helps maintain their image as thought leaders.

Read the story of how Vincent Guyaux of Mindready Solutions built social proof in the car industry.

Why You Want to Consider Doing Pilot Projects With Your Customers

You need to think small, not big. Basically, your goal should be to get an initial project that gives you a chance to prove your value and establish a relationship with someone in the company.Jill Konrath, Selling to Big Companies Author

Although you may decide to sell a product without doing a pilot — an experiment or test before introducing something more complete — pilot projects help you understand the risks prospects take by trying your technology.

It’s always best to know early whether the sales, implementation or legal aspects of the solution might be issues. Pilot projects are designed to help you and your prospects learn and grow into a relationship.

Once a pilot project has been sold to customers, you have a foot in the door. If you’re playing your cards right and adapting to their needs, you should be able to turn a pilot into a paying customer.

Because of the level of service involved with pilot projects, there’s a risk of becoming a professional services company; you must be aware of that going in.

You want to offer higher value and service to learn what works (not necessarily discounts). This can save you development work, but you must make it clear that you’re not building a custom solution.

For your pilot, do not to be too stiff with the revenue model. A revenue model is not just the pricing, and Software as a Service (SaaS) is not the only revenue model.

A revenue model describes how a business generates revenue streams from its products and services. There are many alternate B2B revenue models to explore:

  • Commerce and retail: Selling physical goods, digital products, services for a fixed price or services for future use like product credits.
  • Subscriptions and usage fees: Monthly or yearly subscription fees (SaaS), on-demand usage, storage or volume fees and rentals.
  • Licensing: License of use of patents, technology or certifications like the McAfee SECURE Trustmark.
  • Auctions and bids: Auctioning or bidding systems like Google AdWords.
  • Advertising: Less frequent in B2B, includes banners, affiliation, promoted content or sponsorships.
  • Data: API data usage like Twitter.
  • Transactions/Intermediation: Brokerage, transaction fees or marketplaces.
  • Freemium: Paid version without restrictions or with additional features.
  • Financial services models: Interest revenues or asset management fees.

Take time to consider alternative revenue models. Like Salesforce who brought Customer Relationship Management software (CRM) to the age of SaaS, choosing the right revenue model can give you an edge in a stagnant industry.

A pilot project is a good way to overcome objections, reduce friction and establish strong customer relationships with your prospects.

Can You Validate Multiple Products At the Same Time in B2B?

After completing a second round of problem interviews with my previous startup, HireVoice, my business partner and I had identified that the core problem for Human Resources (HR) specialists was candidate attraction. In the year to come, our prospects were planning to invest in sourcing, social media recruiting and hiring through their employee network.

We believed we could provide solutions to help attract talent via social networks and employee networks, but we were unable to tell which product would be most valuable. Instead of testing one solution with 12 prospects, we decided to multi-track the solution interviews by testing two products with six prospects each.

In the same amount of time it would have taken us to test one solution, we had enough data to be able to put a product on hold (employee network referrals) and focus on another more promising product — social media recruitment.

The same could have been done with problem interviews. Although it’s important to keep in mind your team’s focus, it is possible to speed up validation by researching multiple prospect groups in parallel (e.g., recruitment agencies vs. HR generalists).

It comes at a cost, but there are benefits to testing different products in parallel.