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My web application offers subscription service to both individuals and groups. The subscription is per user basis. Most purchasers will buy on behalf of his company (individual or group). When estimating market size I used number of users as a metric rather than number of companies. Is this a correct approach? Or am I misleading everyone including myself? |
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VCs like to put their money into projects that can generate revenue & grow in value. If the problem you're solving applies to businesses besides individuals, focus on them as much as you can because they are far more willing to spend money on solutions. Also, if your product is for individual use in work environment, it's still a B2B product because of its purpose. The definition of B2B vs B2C depends on the environment, the intended use, and the entity that covers the expenses rather than the literal user. |
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Consider that B2C and B2B are two completely different focus areas. B2B market usually implies longer sales cycles and a different approach to ops. For example, a large part of Cisco's revenue is from their B2B ops. However, Cisco has a B2C ops as well (i.e. Linksys brand). VCs make investments similar to how investment banks make investments and as such, there has to be a sizable return in their portfolio. This implies that VCs are going to make investments that will succeed or fail. However, there should be a positive return in the long run. B2B and B2C are orientations to help quantify and qualify the market opportunity. Both businesses and consumers spend money on products and services. However, businesses are more likely to spend money on products/services designed to grow their business while a consumer might spend their funds on a wider variety of goods and services. At the end of the day, the addressable market is more important than business orientation. A B2C business might have a larger addressable market than say a specialized B2B firm. Similarly, of the addressable market, greater competitors could indicate higher cost of entry and higher cost of doing business. A new market may carry more risk, but offer greater returns due to lack of competition. I personally focus on what I'm selling, how I'm selling it, how much money (gross and net) I'm going to make and when (cash flow), and how much people/businesses are willing to spend. |
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You've pretty much answered your own question:
However, this raises other questions about how you're positioning your product. |
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