Why I choose B2B over B2C for my startup

A broken prototype of a community news site, my initial shot at a startup while at Kellogg.

When I first arrived at Kellogg, I had an idea for a business -- a community driven news site. The idea was that people in local communities would write news for each other. For example, there are already a number of bloggers at the Kellogg School. Why not aggregate their content? Beyond those who blog, why not allow contributions directly on the community news site from anyone in this community (verified with their email address, for example). I was so excited by the idea, I even got a prototype together, which is limping along to this day.

I had some ideas about how to make money. In hindsight, these ideas were all just fantasy, because I had not even got the opinion of the stakeholders these ideas relied on. My ideas included charing everyone: advertisers who wanted to target the Kellogg community, writers who wanted to promote their work into more prominent positions on the site and even charging readers, who might be offered extra "premium" content. As my first quarter at Kellogg came to close, reality hit me.

If I was really going to create revenue - enough to create a sustainable business - I would need lots and lots of users - whether they be advertisers, writers or readers. I would also need all these users to pay money. But how much would they really pay? $5 once a year? Except perhaps a few advertisers, I had a hard time imagining users imparting as much as even $500 on an annual basis. If I was really going to create revenue, I need a business where the users - the customers - are willing to pay a lot of money, and I also not need many of them to generate a decent level of revenue.

During my second quarter at Kellogg, I started looking at B2B businesses. I realized that in B2B environments, though making a single sale might be more difficult, many of these single sales could lead to a reasonable level of revenue in a reasonable period of time. B2C is sexier - you're building businesses with consumer facing brand recognition. Who doesn't want to be building a brand such as Google? For my purposes, though, I just need a business with a reasonable chance of creating a reasonable level of revenue.