a16z Podcast: B2B2C Business Models -- Trick, or Treat?

a16z Podcast

• Episode: a16z Podcast: B2B2C Business Models -- Trick, or Treat?
• Website: a16z Podcast
• Feed URL: http://feeds.soundcloud.com/users/soundcloud:users:62921190/sounds.rss
• Duration: 00:30:57
• Published: 2017-10-28 02:55

with Martin Casado, Alex Rampell, and Sonal Chokshi One of the trickiest things to pull off is B2B2C -- which combines both business to business (B2B) and business to consumer (B2C) -- yet this business model still seems like a tempting treat for many entrepreneurs. Why? Because it gives startups the illusion of easily acquiring customers; removes the pressure of not having to invest in expensive direct sales; or provides (a false sense of) optionality for a second product/ business that "will work later" while the company collects customer data exhaust for now. Why so tricky? Because the question is... who really "owns" the customer? You stop being an entrepreneur when you don't have access to the customer: You don't know what they want, you don't know what they need, and you definitely don't have any leverage to expand that sale (which, especially in the enterprise, is one of the biggest drivers of growth). And then there's the concern that the two sides of the B2B2C could endanger one other, forcing startups to walk a very tricky tightrope between symbiotic (mutually beneficial) and antagonistic, where only one side has power (and guess what, it's not the startup). General partners Alex Rampell (who among other things co-founded TrialPay and Affirm) and Martin Casado (who was formerly CTO and cofounder of Nicira, and then SVP and GM of VMWare's networking and security business unit) draw on their backgrounds on both the consumer and enterprise side of B2B2C to share lessons learned in this episode of the 16z Podcast (in conversation with Sonal Chokshi). More broadly, they discuss how to think about "channel" -- aka the route to market for distributing product to customers -- as well as if, when, and how to build more than one product in a startup.