Is B2B or B2C a Better Route for New Software Companies?
If you've worked in software development for any length of time, you'll likely already know the terms B2C (Business To Consumer) and B2B (Business To Business). Where many new developers stumble is in treating these markets too similarly, which is why we're looking at the core concepts of each here, as well as some things to think about if you're planning to get started yourself.
B2C
The B2C model is the one that the general public would be most familiar with, and basically covers every kind of software made for personal use. The most common types of monetization are subscription-based services such as Spotify and many other mobile apps, or in-app purchases more common to interactive entertainment.
The key to B2C is understanding that sales are always going to be on an individual basis, meaning that every separate sale will matter. Also, in most cases, the end user is not going to be an expert at using the tech, so ease of use and the overall user experience need to be core parts of the design process, often above mass functionality in terms of importance.
B2B
B2B software is anything designed to be sold to other businesses to make use of, either internally amongst their own staff or to support their specific business venture. Depending on the business scale of each group, sales could be singular or include licenses for hundreds of users at once. In most cases, subscription is the standard model, whether that's for design packages, HR platforms, or basic office packages.
One thing that typically appeals to companies is the all-in-one approach of turnkey software, ready to go with minimal input from the company itself. For instance, a white-label casino integration solution for online gambling sites can include everything from web hosting to payments and just needs basic branding to get up and running. For a business model that relies heavily on offering lots of variety to users from the get-go, the ability to launch over 10,000 games quickly can be a major asset. This kind of ready-to-go option is popular with all sorts of companies looking for a fast and minimal-effort solution, and turnkey software is a shoo-in in the B2B world for that reason.
Which is Better?
Naturally, if you already have a software concept in mind, it will organically suit either B2B or B2C already. If you're looking for a niche, however, there are some core differences to consider. For example, B2C software can very often be managed by a small team or even a single person, but income is naturally less stable as you're working with individual users. Design and marketing will essentially make or break your chances of success.
B2B, on the other hand, will usually need a greater initial input of resources, but once contracts are secured, they tend to be more stable thanks to businesses being less inclined to switch services due to the expense and hassle. Business connections may be critical for the start, and to land particularly lucrative contracts, a long time building reputation will be needed.
Being aware of what resources you have available to you as well as market trends should ultimately decide which direction you choose to go. Just don't forget that, in either case, research on top of research will do wonders.
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