Three things a PM needs to succeed in a B2B company

by Jenny Hepworth

The other day we had Ben Foster, VP of Product Management and User Experience at OPOWER come talk to us. It was a useful discussion, and got me thinking about some of the differences between product management in a B2B versus B2C setting. Here I’ll discuss some of those differences, and the implications for product managers.

1. In B2C, your users don’t have to use your product

This is why there’s been so much crappy enterprise software built in the past. In a B2C space, everything you build has to be useful, useable and probably beautiful (though the most popular newspaper online, the Daily Mail proves this isn’t always necessary). If you fail to create a great experience, there’s plenty of other places your users can spend their time, in contrast with the B2B world where your audience is almost certainly captive once the product’s been sold.

2. In B2B, you sell the product, in B2C it has to sell itself (nearly)

In B2B you’ll likely have multiple contact points with potential customers before they convert to a sale, so processes and marketing assets must be developed, tested and refined to pull leads down the funnel. For a B2C product, the focus will be much more heavily focused on SEO, SEM and virality, with the goal being to convert a prospective customer the first time they hit your site. Again, this points to creating a useful, useable and probably beautiful product.

3. You can’t make mistakes in B2B…

With millions of potential users in the B2C space you can end up with a really delicious omelet by breaking a few eggs in the early stages of product development. The cost of mistakes/failure is generally low, either because it only affects a tiny percentage of your total potential user base (so most of the people you care about will never hear about it), or because the task at hand isn’t mission critical, or both. However, in a B2B space your total potential user base is probably many, many times smaller AND you’re much more likely to be performing tasks which have a material impact on your user if mistakes are made.

4. …Which is cruel, because compared with B2C you’re wearing a blindfold

With a consumer product, you can release, test, learn and iterate based on relatively large datasets from very early on in your product development process. For most B2B products there’s no such luxury, given that you’ll have far fewer users, and it’s a much harder sell to bring them on board.

In light of these differences, I see three big take-aways for product managers in a B2B environment versus a B2C environment (and I’m interested to hear others, so please comment).

Create discipline internally

Given that you have a captive audience there’s less incentive to ensure your product is useful, usable and probably beautiful, beyond what is required to make a sale. This lack of external pressure on old school enterprise software giants has opened up fantastic opportunities for B2B companies with a B2C attitude towards user experience. A great B2B PM therefore has to have the discipline to create an environment for great products to be built without the stick of short term user flight in order to prevent new entrants taking customers in the long term.

Manage greater tensions within the organization

Given that you have to sell the product, PMs will not only have to manage tensions with engineering and design, but also with a sales force. Most frequently, this means calls from sales for customized features which deviate from a product roadmap. PMs must not only have a good sense of when to customize (if ever) but also be able to bring the organization with her once the decision has been made.

Work more closely with customers

Given the lack of data available to inform iterations and the lower tolerance for mistakes, PMs need to work even harder for feedback from users. Marty Cagan* recommends setting up a Charter User program, whereby you persuade a collection of 5 or so companies to act as customers as you develop your product. They get the chance to add their input into a product with the potential to solve important problems for them, and you get invaluable insight into their needs and behaviors. They’ll also make great references when it’s time to start selling. Note: make sure they understand from the beginning you’re not building custom software especially for them – you’re building a broadly applicable solution.

* How to Create Products Customers Love, Marty Cagan, 2008