Consumer or Enterprise Service? Who do you want to be?

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2007 saw plethora of startups launching their consumer portals – some of them have folded, some of them are still standing strong and some of them have taken a different route – the enterprise route.

While there is no defined success path, I strongly believe that sometimes, consumer portals need to revisit their strategy and see if there is a value in playing the enterprise game.

For instance, if you are a company collecting local business data, then should you build your consumer portal or just sell the data to Justdials of the world?

While there is no right or wrong strategy regarding the two markets, it’s important to understand the pros/cons of the same:

Sales

In consumer products, you need to acquire the user and then upgrade them to customers status (i.e. paying users). In enterprise products, you need to spend time on business development/sales process – and you will have paying customers.

User or Customer - Just Hold them (tightly)

Marketing Cost

Consumer services aren’t built overnight – you need to spend time/money on marketing/brand building, while selling your service to enterprise doesn’t entail so much of brand building (it does, but not as much as consumer business).
At the same time, word of mouth, if you get lucky drives major of your marketing effort (only if you get lucky) in consumer business, while enterprise is all about ‘asking’ for referrals.

Fame?

If you are the kind who loves fame and wants to get all media attention (interviews etc), consumer portals is the way to go (but I’d really question your reasons for this).
For instance, Desiya positioned itself as a B2B player (was sold to Travelguru for Rs. 100 crores), while they never had any significant consumer footprint – infact, most of the travelers (as well as media) aren’t even aware of the company.

Money?

It’s not fair to weigh consumer vs. enterprise services in the scale of money, but if you look at the value chain – consumer business gets difficult when two most important entities are not the same – i.e. users (thrive on freebies) and customers (who pay you for the value creation).

For instance, if you are building content site, you will give away the portal to users for free (or maybe, freemium if you can), while you charge advertisers (so they are your customers).

In enterprise sale, they are the same, though cracking a deal is time consuming and ain’t so easy (decision maker is different from user).

How about both?

Sure. Why not? If you start your product development thinking of enterprise in mind, you do have a winner – you can sell white-labelled products/license services and at the same time, market your own consumer service (e.g. asklaila/msn portal).
Point to remember is that a journey starts with first step – so decide who you want to be.
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At the end of the day, a startup needs to decide whether they see a consumer play vs. whether they can crack the enterprise market – but ensure that decisions are based on one’s capability and not plain interest.

So tell me, who do you want to be? Consumer or Enterprise service ?

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Also see: Freemium is dead? Yeah, if you didn’t get it right!