Framework
B2B Easy to Start, Hard to Finish
B2B is easy to start — design partners are accessible, first revenue comes quickly, and you can reach $2–3M without massive distribution investment. But finishing is brutally hard: selling to thousands of businesses at scale is one of the most competitive and capital-intensive GTM motions in software. Consumer is the inverse: hard to start (expensive distribution, long time to first 1,000 customers), but the historical outcomes, market size, and competitive dynamics favor consumer at scale.
How it works
- 180% of Y Combinator companies are now B2B — it is no longer the contrarian bet, it is the orthodoxy. The 'unsexy B2B company' is now the sexy founder narrative.
- 260% of the S&P 500 by market cap is consumer or consumer-adjacent. The biggest outcomes in business history predominantly favor consumer.
- 3B2B gives you sophisticated buyers with real budgets, longer contracts, and referral networks. Consumer gives you millions of potential users, word-of-mouth velocity, and network effects that B2B rarely achieves.
- 4The trap: starting B2B because it is intellectually correct (high ACV, design partners, clear TAM math) rather than because you genuinely want to serve that business customer for a decade.
- 5If you are going to do consumer, find a sector with B2B characteristics — recurring need, high stakes, professional context — so the unit economics work despite the acquisition cost.
Hear it on the podcast
I Already Know You Hate TaxesListen to the episodeMore from this episode
AI Should Be DeflationaryMost AI today is used to make businesses more efficient — cutting labor costs, increasing output per employee, improving margins — without passing any gains to consumers. The underbuilt opportunity is AI that lowers the price of professional services for the people who need them. A $1,200 accountant becomes a $499 AI agent. A $10,000 attorney becomes a $200 AI reviewer. The technology should compress the cost of expertise, not just the headcount required to deliver it.Meet Consumers Where They AreDo not build a new interface and ask customers to learn it. Identify the medium where your target customers already interact with this type of service — email, text, phone call — and build the product to operate entirely in that medium. The lower the adoption friction, the higher the trust, and the faster the referral loop. No app to download, no portal to navigate, no new UX to learn means less resistance at every stage of acquisition.
Get the next framework first
One email a week with the frameworks, tools, and founder stories from the podcast. Free.
More frameworks for Strategy & Moats
Market Timing via Legislative MandateThere is a critical difference between a law that creates an incentive (nice to have) and a law that creates a mandate (must do). When legislation requires businesses to do something they have no existing solution for, you are not competing for mindshare or convincing anyone they have a problem — you are standing on the other side of a requirement. This is a fundamentally different and far more favorable demand environment than ordinary market development.Culture Moves Before ScaleCulture migrates before the industry acknowledges it and before the statistics confirm it. Watch what the kids are doing — not what the valuations say. The leading indicator of where culture is heading is felt wrongness about the dominant form, not data.The Clean Break ResetWhen you've been chasing the wrong go-to-market, don't pivot — shut down, acquire the IP, and rebuild from scratch. Good money on bad money is still bad money.The Tier One Supplier StrategyDon't build the whole product. Build the critical component everyone needs. Being a tier one supplier means more customers, faster defensibility, and IP that acquirers want to internalize.The Infinite Game StrategyFrom Simon Sinek: competing without a defined end state, declared winner, or timeframe. The goal is to stay in the game long enough that short-term headwinds become irrelevant to the mission.10-Year Problem DesignBuild solutions for the problem that will exist five to ten years from now, not the problem visible today. Requires outsider perspective, first-principles thinking, and organizational structures that support multi-year investment horizons.