Why and How I'm Moving My Startup From B2C To B2B
It's been about a year since I started Klart.co, a bookmarking service for designers. It started out as a simple way to capture and organize anything you find online. I've kept it simple but have added some sugar during the year 🍬.
Asking people for money
I've learnt a lot of things during this year. One of the things is how hard it is to ask consumers for money. I personally like to pay for software since it gives me a sense of sustainability and hope that it will still exist the coming year. However, I've found that this is not the usual case. Most people expect software to be free, or at least have a freemium model. I understand, but while this model might be sustainable for a funded company, it's hard to maintain a user base that requires support, bandwidth etc without making any money. I do think it could make sense for a bootstrapped company to offer a free plan when they are profitable, as a way to grow their business. But I think it's risky and can be misleading if you're just starting out. Misleading in the sense that if people pay, you have verified that people will pay, if they just ask for a free plan, you haven't really validated what you're worth yet, even if you have a lot of free users. Which could also be quite costly. This brings me to the second issue.
Coffee has already proved it's worth
I don't remember when I heard this but it made some sense. You might have seen something similar to "it's just $5/m, like your daily Latte ☕️" on pricing pages. For me this makes sense, but I know that's not the case for everyone. I've been trying to understand why we react so differently when paying for coffee, beer, etc vs paying for software. Is it because we've become used to software being free or because the software hasn't proven it's value yet? I don't know. What do you think?
My idea of B2B
My idea of selling to businesses is different. They have more money and make more money (well, not always...😛). While many products might not fit into B2B I think that for SaaS companies there could be a lot less pain in doing it. You can charge more money and therefore invest more time into customer acquisition. You know, calling and emailing people. And no, this doesn't scale exponentially like viral referral programs, but 100 customers paying you $100 each per month is still $10000/m, no magic tricks involved. Compare this to reaching 1000 consumers that will think 20 times before paying you that $10/m. Sure it's doable and proved successful for a lot of products and it also calls for different methods and skills. I'm just saying there might be a slightly more straight forward way to creating a profitable business.
For Klart, I will try to establish a paid personal plan for < $10/month and an offer for teams at about $50/month. My idea is that this will allow me to be profitable and sustainable while growing in both B2B and consumer markets. Why do both? Because I have an interest in using Klart myself as both an individual and as part of a team. I also love to see people use Klart for all kinds of things and think it can be useful for both individuals and teams.
Klart used to be a consumer facing product without any collaboration features and with tags as the only means of organization. To create a valuable products for businesses I needed to add some sugar. Among other things I had to create:
- Another level of organization for projects (boards)
- Admin area to handle teams
- Multiple plans and pricing
This took some time. I think the hard part was to keep the experience intact for individuals. More specific, individuals should not feel an increased complexity in the tool. I think this is super important and it was very natural for me since both myself and people around me use Klart every day as individuals.
I went from this:
Another issue was onboarding. Should new users pick a plan when signing up or just be able to freely jump around while trialing? There might be some benefits in having different onboarding processes for different plans but since I'm still very early stage, I decided to go for the latter, with one minor change. When signing up the user clicks on the plan they "choose" and I can therefore keep some kind of track of interest in both plans 🤓.
Anyway, I still see Klart as an MVP. I love talking to my users and I'll continue to do so. I'm also going out there to talk to businesses and see if my ideas are correct and get feedback on what has to change 🤔.
Time will tell
When will I get to 100 customers? Will I ever? Honestly, I don't know and I think it's super exciting. I've been working on Klart for over a year now and I love it. Let's see what the future has to offer 🤗.