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I have come up with a lot of ideas to solve business problems, but I am reluctant to implement them for the concern that selling to such businesses would be a far more difficult problem than simply creating something that works better than what they are currently using. Business often make stupid decisions based on relationships with sells people or brand recognition more than merit of the solution. Of course, this problem exists in the consumer space as well, but the market is so much larger (everyone is a consumer, not everyone makes decisions on what solutions to deploy in a business).

In my experience, you have the difficulty backward. It's just fear of the unknown that keeps too many technical people from attempting it.

If your product has a demonstrable return on investment, then it is far easier to sell to businesses. Because businesses actually make decisions based on ROI, and consumers mostly don't.

Remember that to make a fair comparison, you need to do it per dollar, not per sale. Even if it's 10x easier to sell to one consumer than one business, if a business customer pays 100x more money, then it is still vastly easier to sell to businesses.

This is only true if there is a cost-effective way to reach the businesses in question. Sometimes there is, sometimes it's less clear.

Sure, but the same objection applies to consumer-targeted products. If your product is for "everyone", you may need to spend large amounts of money to get attention.

You are mostly right, but then there are other issues to consider: why would a business buy from you who is just starting out? They would like to have some guarantee you will be around after a few years..

Reputation definitely counts for something. But there's a slew of businesses that would likely buy from you in the early stages. They may be much smaller businesses, and possible not even in your long-term/medium-term target market, but it's a stepping stone.

Selling can still be a challenge. But if you have a valuable product, and an A* sales team, it's much much easier.

>Because businesses actually make decisions based on ROI

They like to say they do, but they very frequently don't. I'd say easily 80% of the software and hardware purchases I've seen corporate clients make are based on things other than ROI. Things like "the sales person for product X always takes me to nice lunches" or "everyone else is using Y so we need to use Y too".

Thus the evergreen adage, "Nobody ever got fired for buying IBM".

ie Gartner's Magic Quadrant...

That's why you need to sell first and build second. You have a good relationship with your first customer, who has a real problem and real money to solve it.

First, it should be noted that if you're actually in the industry you're targeting, chances are you have relationships that you can leverage. Your comment seems to imply that you're an outsider with no domain expertise who believes he has ideas to solve problems in various markets. If that's the case, you have the aforementioned domain expertise shortcoming.

Second, far too many technical folks seem to believe that they have to sell what they've built. That's almost never the case. There are people who make a living selling all sorts of products and services in established B2B markets. If you have a product or service of merit, chances are you'll be able to find somebody with sales experience who will be interested in selling for you.

Now here's the key: you must be prepared to invest money into your sales efforts. You're probably not going to find many good, experienced salespeople who will work on commission only. And depending on the market, you'll most likely need to budget for tools that will help your salesperson succeed (trade shows, etc.).

Bottom line: it takes money to make money. If you're not willing to put cold hard cash on the line to sell your solution, you have no reason to expect results.

you have the aforementioned domain expertise shortcoming

This seems a little harsh or judgemental.

Big Co's don't care about your 10pc better product, because it may be 10% of a cost center that is maybe 15% of revenues. That makes it a 1.5% margin business for them, which is literally not material. Given the politics of BigCos, the top guys have limited bandwidth. They typically don't want the brain damage associated with taking on operational risk for non-material benefits on the upside. Its a distraction, and a fundamental conflict of interest for them. The quality of your sales guy, is only so good as he helps develope a product with lowe operationa implementation risk and has the already-in-place-relationships with a BigCo to de-risk their adoption. even in the best case, its a tough sell. The better bet is to show up with a 10x solution. That turns a 15% cost into a 1.5% cost, and creates a 13.5% increase in profitability. Now that you are moving the needle, you will get people's attention. Even at sr. levels...Just some things worth thinking about. As petet thiel rightly notes, there are varying abstractions of 'sales' skills that come into play, not all are of the door-to-door "sales guy" variety.

> This seems a little harsh or judgemental.

It wasn't. My statement was prefaced with "If that's the case..."

> Big Co's don't care about your 10pc better product, because it may be 10% of a cost center that is maybe 15% of revenues. That makes it a 1.5% margin business for them, which is literally not material.

You're missing the point: you realistically aren't going to know what product to build, or be able to assess its value before you build it, if you have no domain expertise.

An entrepreneur with domain expertise is far less likely to build a product that doesn't create enough value to be viable than an outsider who doesn't understand the businesses he's targeting. In other words, the entrepreneur who actually understands what he's doing because he understands the industry probably isn't going to build a 10% better product that is 10% of a cost center that is associated with just 15% of revenues.

Sales is a bitch if you are not good in it. I complete agree that almost everyone can learn to become a mediocre sales person, yet this is not what you want foe your B2B start-up. But yes, chances are that you will ultimately find someone to sell your product. Even it is not a trivial task to do so.

The pint where I realy don't agree are relationships the typical start-up founder can leverage. My impression is that this kind of decisions are met in a, for me, not really understandable way at levels a founder that worked for a couple of years in company X in industry Y is unlikely to have. These kinds of caontacts don't come from domain knowledge alone.

Agree on most of the rest, although I would stress the importance of sales in a B2B environment even more. Would help to get really early on some good business guys for that. And I mean business in terms of I-did-sell-fridges-to-escimos sales people, not I-had-a-good-prof-during-my-MBA types.

FWIW, I am writing a book to get you some part of the way to your goal: http://www.howtofindsaasideas.com

It's about finding/extracting ideas (from domain experts) and then testing them quickly.

(Apologies for the terrible landing page)

Yes, of course if you have domain expertise and there is a need you can recognize a niche to fill with a company. I think getting domain expertise is easier said than done and could probably require quitting one's day job to go work in industry X for 5 years. Possibly just to find out that filling a niche is hard.

Not that difficult. Instead of starting a start-up when you come out of school, go work in a few IT departments. You will find something that is needed somewhere.

1. I didn't suggest that domain expertise is easy to develop. Nobody gains expertise overnight. That's the point.

2. You don't have to quit your day job to develop domain expertise. Be strategic and try to make sure your day jobs are related to a specific industry. Far too many people hop from random startup to random startup. That's not surprising: the pay can be excellent, you get to work with the latest and greatest technologies, and you get a lottery ticket in the form of equity. But many of these jobs won't provide enough exposure to a vertical to actually gain meaningful knowledge of it.

3. If you get involved in an industry, you should take the time to establish relationships, especially with folks who are non-technical. If you nurture those relationships and keep your eyes open, you will often meet highly-knowledgeable, well-connected non-technical individuals who make for perfect non-technical co-founders. These are not the "non-technical co-founder seeking technical co-founder" wantrapreneurs with no domain expertise of their own who you run into all the time in Silicon Valley.

4. If you're not prepared to invest the time in understanding a specific market, that's fine. Be the best engineer you can be, try to maximize your income and consider whether it's worth continually beating your head against a brick wall to find an "idea" so that you can create a "startup."

Great points. Any suggestions as to verticals which are particularly under served by software?

Let me put it this way: in all of the industries I've been exposed to, I've never encountered one that had a) no pain points or b) companies entirely happy with their current vendors.

Note that you don't necessarily need to find a market that's underserved. Plenty of markets are served, but not well. Sometimes, doing something marginally better and/or doing it for less than the entrenched competition is all you need to create opportunity.

The size of that opportunity will vary of course. A lot of wantrapreneurs look at huge markets and think in terms of 8, 9 and 10 figures, but if you're more realistic (i.e. you'd be happy with a six or seven-figure annual top line with healthy margins), I would suggest that opportunity is abundant. The easiest way to find that opportunity? If you meet people in unsexy markets, talk to them. Most wantrapreneurs won't give these folks the time of day.

Write articles and go and interview people as a journalist/researcher. You can do that in your spare time and you will get good access to decision makers and find out all about industry perspectives and pain points.

We recently had a hackathon with a multilateral rice science nonprofit - they had very focused challenges http://rice-hackathon.irri.org/challenges using their domain expertise - the results of the hackathon was eye-opening!

I agree that domain expertise is often lacking in startup founders, especially the "business" founder. For several years I wanted to form a recruiting startup without having built up a solid understanding of how recruiting works. After I had several years of recruiting under my belt, I was able to build a reasonably successful small business (originally a startup that couldn't scale) that exploited a nice little niche in the recruiting world. That small business wouldn't have been possible if I hadn't known a lot about recruiting.

Very valid point. That's why even in Hacker news we see a lot more items talking about frameworks instead of domain related topics.

There are fewer frameworks than there are domains out there, so audience of hackernews tends to connect over frameworks rather than domains.