What is an MVP for a B2B startup?
evrim.io
evrim.io
Those are much easier to sell to, because there is a much smaller amount of buy-in needed from the organisation as a whole. Because the stakes are so much lower than in an enterprise-wide deal, an MVP may be perfectly acceptable to your customers.
I've created an MVP for a B2B product and have success in selling it by making it as easy as possible to deploy. This reduces the amount of stakeholders required to sign off on the product. The key is to be able to deliver value (solve a problem) without a huge man-hour investment on the customers end. After demonstrating value, I can shift the focus to a deeper integration and have more success because I have more people on my side to push it internally.
I run a B2B SaaS company. We sell to businesses. Most of them have 5-500 employees (SMB/Mid-Market). Last year we built a very simple MVP and quickly started selling it.
If you want to do this too, the buyer and idea must be compatible. The idea also has to be something the buyer wants.
Buyer: As far as I know, hotels aren't big on buying new, simple services from startups. Try brick & mortar / mom & pop stores, startups, tech companies, etc.
Idea: Tablets are a big startup cost. You're asking your first customers to pay a lot more than ours did. Or you're taking a big loss. This immediately makes it harder to get going.
Demand: Do hotels / guests even want tablets in rooms? What burning problem is this solving, how did you learn that, and why is this a great, cost-effective solution?
As a hotel owner, yeah, I'm not too sure... it might just be an additional cost, and not worth the ROI.
First of all, the product is more successful the more guests use it. Using a TV with a remote is not as good a user experience as using a tablet while you're lying in your bed. I'm hoping that allowing hotels to try the tablets for free for a few months while we're collecting ROI data will be able to convince them this is a good investment, but we'll see.
I'm also developing the client in React Native, and I will create an Apple TV version. I'm planning on first giving in-room tablets a try, and if it doesn't work maybe try to get in with TV apps first.
Thanks a lot for the thoughtful response, I appreciate it.
I’ve stayed in a dozen or so hotels that have given me an iPad with apps for room service book spa appointments etc. Probably close to a month of time total.
I never look at. Ok I have twice. Because they said there was an app of local business (I quickly bounced and opened yelp on my device). Usually I toss it on my table or nightstand and never touch it. So, how do you change that behavior? The fact that I have my own devices is key. Mine is set up how I like it. Why would I use yours? I’m not casually using your device and then maybe stumble into the food app to order room service.
The tv however I use casually multiple times a day in a hotel. Usually around times that coincide with meal times, if I’m in room at all. I am always exposed to services like spa food etc. I just need a easy way to book at that moment. Picking up a foreign tablet to do so is a bad UX IMO.
Most guests are not tech oriented people. The advantage of a slick tablet UI isn’t going to win you much. Providing the right functionality at the right time in a half as good way will be more valuable.
Of course this is all conjecture and personal opinion but wanted to give my two cents. Good luck with the demo and I hope you get good feedback / roi
It's really interesting to hear your experiences with in-room tablets. I definitely agree that one of the biggest challenges is getting the guests to actually use the tablets. There are in-room tablet providers with user experiences not even close to what we have designed, and they claim to have a good amount of user interaction each day, but they might be lying or exaggerating. There is only one way to find out, but if it turns out that TV apps are more profitable than in-room tablets, that would actually be good for me.
Regarding your other point on allowing the guest to use his own device during stay, that is an important feature we are considering. I also agree that it is very important.
Thanks a lot again for all the input, I appreciate it!
The room was expensive though, I prefer AirBnB with super hosts.
So definitely not a feature that alone would get me to come back.
Source: I stayed there.
Hotels are definitely tough buyers, not the most tech-savvy customers. My initial idea was not in-room tablets, I hoped to achieve the same thing through apps that guests could download on their phones. I approached hotels, and even got one to pilot it, but there were many issues with that, I can go into details if anyone's interested. I pivoted into in-room tablets after that.
The problem I'm trying to solve is that hotels are not able to properly collect guest data and upsell to guests. And today's guests expect personalized experiences, but hotels can't offer that in scale. In the long run, it might turn out that in-room tablets are not the best platform, but there is no doubt that the hospitality industry is going in this direction. Looking at a website like hospitalitytech.com, this is pretty much all they talk about.
That process is definitely different in an enterprise market. For whole-hog adoption, giant companies will want a mature solution. So instead you find ways to derisk it. Maybe it's a pilot program with a larger player. Maybe it's proving out the technology in an SMB context. Maybe you just find one mom-and-pop hotel who pays you not in money but in their time and data. Maybe you start with a single floor or even a single hotel room into which you preferentially book people who you think will be early adopters.
The M in MVP is for Minimum, and that applies not just to the product, but to the context of use. You start as small as possible, just enough to test your hypotheses. The smaller your tests, the faster you learn.
He makes another rookie mistake here: "I still need to buy the same number of tablets to rent to hotels, and can’t even really discount the product that much." Lean Startups are not cheap startups. It cost Toyota millions to build the first Prius, but they did not sell it for millions. That's fine, because the point of your early MVPs is not to cover the expenses. It's to learn things, including about what people will pay. In Lean thinking you price based on value, not cost, and then work hard to minimize costs while maintaining value.
[1] https://en.wikipedia.org/wiki/Crossing_the_Chasm
[2] https://www.amazon.com/Four-Steps-Epiphany-Steve-Blank/dp/09...
Honestly, that's the whole reason why I wrote that article. I'm struggling with that thought as well, but I don't think you're completely right on that.
> Maybe you start with a single floor or even a single hotel room into which you preferentially book people who you think will be early adopters.
This is exactly the plan I'm going with actually. But still, sourcing tablets, sourcing funds to buy them, and then developing an MVP takes time. It can't be too simple that it will be detrimental to their guest satisfaction, finding the balance is key, that's why the initial version is only room service.
> Maybe you just find one mom-and-pop hotel who pays you not in money but in their time and data.
Again, that's what I'm going after. Some people say that I should already charge them, and finding hotels that would pay for that at this stage is a waste of time, that's the point I was trying to make in the article. Finding a hotel that will pay with their time and data is exactly what I'm going after.
I think these struggles are very similar to what people doing B2C startups go through. Nobody has a fully marketable product on day 1. Early tests of the value prop are key, and people do all sorts of things to prove that the value really is sufficient to build a business on before they get cash in hand.
But I think it's always important to keep in mind that until somebody actually does pay, it's all just a fantasy. And it's also important to keep in mind that as entrepreneurs we really want to preserve the fantasy. You know your market better than anybody here, and it's your money you're spending, so use your best judgment. This could be the optimal way forward.
However, the inability to find early adopters could also be evidence that there isn't really a market, that you're selling a nice-to-have. Or it could be evidence that your company doesn't have the sales capacity to move the product, even if you end up making something good. Until you actually make some sales (and more importantly, recurring sales), you won't know for sure. So every time you find a reason to delay that moment of truth, you should be suspicious.
> So every time you find a reason to delay that moment of truth, you should be suspicious.
I couldn't agree more with this. My worry is that this thought is going to make me approach hotels a bit too early that will be a waste of time. Finding the right time and the right stage is the key.
One thing that is not mentioned in the article is that my initial idea was to develop white-labeled app for hotels that their guests could download. I got someone to introduce me to a hotel owner, and he got me into his hotel. At that stage, I didn't have an app. I'm a software developer, but I didn't even know how to develop for iOS. After they agreed, it took me about one and a half months to learn iOS development, develop the client and develop the back-end. They kind of lost interest. Without getting into much detail, there were other issues with that idea, evident from my other visits to some other hotels, so I pivoted into this. And this time, when I go to a hotel, I want it to be at a stage where it's useful to the hotel, and where I can collect ROI data.
> However, the inability to find early adopters could also be evidence that there isn't really a market, that you're selling a nice-to-have.
I definitely agree with that too. I talked to hotel managers, and they are mostly very excited about the idea, but until they pay me, there is no way of finding out for sure. In the end, in-room tablets might not be a thing, but hotels will need to use technology to understand their in-house guests better, personalize their experiences and automate many things that the staff do now, I have no doubt about it.
Of course, it makes sense to have a plan about scaling, but it is a mistake to already put everything in place to be prepared for scaling.
(Disclaimer: working in a startup, but not a founder)
It's a hardware startup that is selling to Hotels. There are barriers to entry, but nothing inherent to being a B2B startup.
Bootstrapped B2C hardware companies face similar challenges.
Hotels are only one business vertical, there are hundreds of thousands of business verticals, some of which won't require as much upfront product investment to gain traction.
It boils down to this: hardware startups need funding to get off the ground.
Here is my unsolicited advice:
Find yourself a business co-founder who has experience in the hotel hospitality space. If you can convince them of the value of your idea, and the sign on, their job is to find a few hotel chains to do a paid-for pilot. This person could even be your first investor.
In lieu of that, raise a friends and family round to generate enough funds to get the hardware you need, and target a subset of rooms at a hotel (luxury room suites). You won't have to buy nearly as many tablets, and their patrons already expect a premium experience.
For large rounds, sure. Probably helps.
If you struggle to raise $20-50k from your own network, then do you have the necessary social and networking skills required to be successful at running a business?
> target a subset of rooms at a hotel (luxury room suites)
This is exactly the strategy I'm working on.
That guy is going "my business has this problem" over a beer and the founder goes "I can solve that for you" and they work out a deal. The founder builds the MVP that solves the customer's problem and incorporates so they can get paid.
The founder iterates and continues getting paid and at some point uses the cash to hire one of those expensive salespeople who knows how to chase down decision makers.
I am pretty sure this pre-existing contact was a great helper. Far beyond being the first customer.
Actually, we started even one step earlier, by working on open source (Gensim), no money involved at all.
I let them know that I build software and am interested in their industry. I asked them if they would be willing to try my app and provide feedback. They said yes!
So, I got to work formulating a MVP feature list. I presented it to them and we iterated back and forth for a while. Then, I started building. More months of feedback and iteration ensued.
Once they’d been using the product for ~6 months we launched to the public.
Fast forward 4 years and we have ~1k customers.
It can be done! The first step is to talk to people, relate to them, and empathize with the issues they face in their business.
If you ever want to chat one on one, my email is in my profile.
One example is you can arrive at a simple and focused problem that has enough value that the customer would be willing to sign a paid pilot.
But I'd advise you try your best to shortcut the long and complex sales cycle unless you have lots of upfront cash to burn.
In this case, your "customers" are venture funds and pharma companies, and your MVP is a well thought out experimental plan. You get more customer / investors by doing the experiments and using that data to design another experiment
They tried adapting the lean startup to life science with mixed success. For biopharma as a specific life sci sector other models work better than lean
From a startup founder who also had a "We will perfect the product and then it will sell itself" mentality, which was one of our major mistakes: Start stelling! Now!
Even with a perfect product the sales process will only get only 20-30% easier. Even with the perfect product you will need the same optimized sales pitch and the same optimized sales presentations.
You're spot on with this. I worked in a small B2B startup for a bit over 18 months and that was always our route to market. Develop the stem of the idea, polish it enough to make it convincing in a demo, and approach a big company. They sponsor development by buying licenses, and in exchange they get a say in the development process, the features we prioritize/drop, etc. The result is a win-win: they get a product that fits their needs, we get funding and credibility.
Well, this is exactly what I'm working on. What I was trying to say in the article is, many times in B2C startups, you can create an MVP that is very unpolished, it takes a bit more polishing in enterprise B2B.
Not worth the expected return? This sounds like a case of you wanting 'instant gratification' and to be making huge amounts of money from the start, which is bogus. With a few customers you will:
1. Be getting the use cases, bugs, feedback directly from your customers
2. Show you can get some funding and are building something people will pay for (or if they drop you, you'll understand why)
3. Have numbers, knowledge, and customer referrals which will VASTLY help getting more customers. I.e. when you are in the sales pitch, saying "X hotels have been using this for a year, and have generated Y additional sales, and have learned Z metrics about their hotel guests" etc.
There are two things I can do with my time.
1. I can go ahead and talk to as many hotels as I can, halting development. At this stage, there isn't even anything that is actually working. I have dealt with hotel sales before, finding decision makers, convincing them, etc. take a lot of time.
2. I can work on finishing the MVP (which is only room service).
Going with the first route, the expected return is way too small. Let's be optimistic, and say one in 30 hotel managers thinks this is super cool, and decides to pay for this thing way in advance. Talking to 30 hotels, arranging meetings, getting them to respond, etc. would take months.
Instead, I can get it to a point where I have an MVP that can be put in a hotel room, which can calculate the ROI it brings, which I can use to justify the cost of the product. This is the path I chose.
(I obviously talked to hospitality professionals to get their feedback, but I wasn't selling them.)
So assuming you have a good product, you have to consider two things: commercial terms and SLA. This is a delicate balancing act when you're trying to shop your MVP. You don't want to underprice because implicitly you're saying the product isn't ready for production. You don't want to overprice, and set expectations too high. You also want to be careful about what kind of level of support you're agreeing to with your product. If it's an MVP, are you going to drop support after 6 months if your business can't support itself?
Good businesses consider these things before they sign-on for an MVP product, make sure you have good answers to these questions.
for instance if one of your features is guests can see their bill in real-time. that might not be a feature to the owners. they might want the extra revenue of customers not knowing their bill and getting cought up in the experience. the point is you don't know.
your adding features you want not the person buying. again unless you are working with a hotel owner or have sold similar systems or were one in the past.
There's a thesis out there, that in order to test the market you can put up a simple website adverstising your yet-to-be-made product and see if you get any subscribers. I feel like this applies to B2C products and low ticket B2B products (i.e. $10 per user per month).
The playing field for a serious B2B product is very different and the MVP needs to be in good shape in order to win and keep clients.
But above all, you need a product which solves a tangible, significant problem for the customer!
If the willingness of a customer to sign a prelaunch sales agreement comes down to the quality of your MVP, something has gone wrong in your sales process and the customer is just looking for an excuse to decline.
I was objecting to the idea that you need an MVP at all to win clients (although obviously retaining them is a different story).
Evrim doesn't clarify what his product is that needs a tablet, so it's hard to offer any specific advice. _BUT_ he should be finding a way to test his product with pen/paper, employee or customer smart devices, or other equipment that the hotel already owns.
That isn't the intention honestly, they don't need to pay for hundreds of dollars to use the MVP. I probably was not very clear in the article.
The problem I'm trying to solve is that hotels are not able to properly collect guest data and upsell to guests. And today's guests expect personalized experiences, but hotels can't offer that in scale. In the long run, it might turn out that in-room tablets are not the best platform, but there is no doubt that the hospitality industry is going in this direction. Looking at a website like hospitalitytech.com, this is pretty much all they talk about.
I considered downloadable guest apps, there were many issues with that. I can get into details if anyone's interested. I also considered smart TVs, but considering I want guests to interact with this at the comfort of their bed, I thought it's not the best solution. Although I'm using React Native for the client, so creating an Apple TV version will be trivial.
It's not cheap, the success rate isn't high, but it can be cost-effective. I've spent 20k USD on a small 6x3 feet booth space, but also gotten 40 to 50k USD over the course of a few months from conversations that were initiated at the booth.
Another point to factor in is that enterprise customers by nature have low churn... and that makes the RoI work out in the end.
And I just wanted to rant, I didn't expect it to get this much attention on Hacker News to be honest :)