Pulling Back the Curtain on B2B2C Go-To-Market

CAROLINE: Hey, today I’m here with Eric Thelen. Eric is the Co-Founder and CEO of Oznr. And he’s an expert in B2B2C, which is a really interesting topic for most marketers. Usually, platforms are really tricky to markets, because most of the value comes from having all the members within the platform. In B2B2C, it’s even more complicated, because on one side you have businesses that you need to sell to. And then on the other side you have consumers, and the consumers won’t want to join your platform if you do not have the businesses, but businesses will have a hard time paying for your product, if you don’t have consumers. So, it’s a tricky problem to solve. And Eric has done this successfully, not once but twice. So, I’m really, really excited to have you here today, Eric. 

ERIC: Yeah. Thank you so much for having me. And I think you hit the nail on the head with the crux of the issue for any marketplace or B2B2C business or technology is… It’s that chicken or the egg question, who do you go after first?” If you are a fledgling startup and you have limited resources, are you gonna go up to the supplier side and try to build that first, knowing that you have no equity in the bank in terms of consumers or are you goanna go on the consumer side and try to build a consumer set, a waitlist, so to speak so that you can entice the suppliers in.

And so that is the major question. And the answer is there is no wrong answer to that. There are businesses all across the world that have done both successfully. And in our experience, the last two companies that, one that I worked for and one that I founded, we addressed the supplier side first as our tactic. And I think if you go to the supplier side first, it becomes a sales tactic first that leads into marketing. And if you go the consumer side first, it’s a marketing first approach that leads into sales.

I think probably what would be helpful to you and your followers is just to give a brief background on my history. So, I was an early-stage employee of a company called Experience. It was a mobile ticketing- based company here in Atlanta. So, we worked with Ticketmaster Live Nation, the NFL, MLB, NCA Sports to essentially inject new mobile ticketing technologies into the things that they were doing. So, it’s seat upgrades, subscription access to tickets, that type of stuff. So, if you think about the sports landscape, very niche, there’s only 300 players in the entire space. So, the total addressable market is actually pretty small and there’s a lot of who you get is almost as important as how many of you get up front. So that was really important for us in our success.

With Experience, it was if you go get the Charlotte Bobcats, that’s great. They’re a great franchise, but if you go get the Boston Celtics or you go get the LA Lakers, that’s gonna make all the difference in the world because in every industry there are leaders and there are followers and a common objection, you’re gonna get is, well who else is doing this, right? So, they wanna see that the market leaders in your space are onboard. So that’s the hard part is you got to get the upper echelon of who you’re trying to sell to you on board.

CAROLINE: Yes, so how? So, I think in theory, that’s great. I think a question that everybody is gonna have is, “okay, so how do you go and get the LA Lakers when you don’t have really a strong customer base and you don’t have a lot of consumers either?”

ERIC: Yeah, so, I mean, the biggest thing is you have to be solving a problem. There’s gonna be a visceral pain point that they have that you can solve a problem for that they don’t have a current solution for. So, the industry jargon for that would be product market fit. So, you have to be solving a compelling problem that they have on their side, but they’re gonna buy it. And in terms of tactics, it’s block and tackle, it is hustle and getting in front of people, meeting them in person. And then ultimately just having someone place a bet on them. I mean, that’s really, you have to sell them, but ultimately someone’s got to buy in and be your first kind of beta partner. And you’re gonna give away the firm. I mean, that’s part of it is that you’re gonna let them use the platform for free, you’re gonna lock them in for life. I mean, your first partner is critical to your success, because they’re gonna give you the feedback that you need to build a product in a meaningful way and they’re gonna be your case study moving forward. So, as we try to sell the second, third, fourth, fifth partner, they’re all gonna go back to your first partner and say, “how’s it working?” And to be perfectly honest, your first product is gonna be bad. It’s gonna be terrible. And they’re gonna have to suffer through the bumps and bruises of working with you.

And if you think about technology or startups in general, the demand curve, the growth curve, only two and a half percent of the population are true early adopters or innovators that are willing to jump in on a bleeding-edge product. So, then you’ve got your early adopters and then you’ve got your early majority. They all wanna see case studies and logos, but that two and a half percent is who you have to target because they’re willing to jump in. They always want to be first. So, *who* you’re targeting is really important because there are some teams, especially in the sports industry that we were in, there are some teams that are always first, they always want to be first. So, you kind of know who they are. And there are some teams that are always gonna be last, right? And they’re that late majority that you’d be spinning a lot of your wheels trying to get them on board. And then the second business that I actually founded myself with two other guys from Experience is called Oznr and we are a craft beer marketplace. So, we have a native app. That’s a marketplace that connects breweries directly with consumer for direct consumer sales. So, we do pre-sales for these high-demand releases that they do. We do memberships and bottle societies. And that is a company that we started in 2017 and bootstrap that from the ground up. And actually, we were just recently acquired this August by Next Glass. So now we have a little more resources to be able to plug into the business and grow. And again, with Oznr, we chose the route of, we’re gonna go after the suppliers first, because the great thing about Oznr was, we started the company with a thousand dollars. And so, we just… If you have a lack of resources that breeds necessity, which breeds creativity in the sense that if you don’t have any money, you’ve gotta be pretty scrappy and creative with how you bring your partners on board. So really for us, our kind of launch strategy was we’re based here in Atlanta. We’re just gonna focus on Atlanta first. So, if we can kind of foster the community in Atlanta, then get them on board and stay close to the product, stay close to our consumer and keep a tight feedback loop, we can then build the product, because the product needs to get to a certain level before we try to expand outside of our own market.

But yeah, I mean, I’ve got kind of the three things that stuck out to me when you initially reached out about B2B2C, and this will obviously predominantly be focused on starting with the supplier side first. And I’ve kind of already touched on a few of these things, but the first ideas are what I call the pyramid of inventory. So, when I talked about getting the Celtics or the Lakers first, or within Atlanta, it was Monday Night and Three Taverns. In our market that’s important because one, if you get the right partners first that consumer side will follow, right. If it’s a high demand brewer or a high demand sports team, they have a big following. When they launch something and they’re committed to you and they start promoting it, their consumers effectively become your consumers.

So, when we launched with Monday Night, we had our first couple hundred consumers come into our product. That was a really exciting time. And what that gives you leverage for is going to the other consumers or the other suppliers in your market and say, “Well, now we’ve got 250 consumers on the platform and one case study.” Had we done that with a lower tier brand, maybe you only get 10 consumers in the platform and then your proposition isn’t as compelling.

So, it really matters that you get those industry leaders, those innovators in the space that other people aspire to be first. And then what you’ll start to see kind of leads into my next point is what we call the hub- and-spoke model. So again, we’re a marketplace, so geography matters for us. And so, as we continue to build out Atlanta, we got our first partner, I think we now have probably 25 or 30 different partners within Atlanta, you hit a point of saturation. And so, then you say, “Okay, what’s the next market?” And where I think a lot of businesses fail is, they set their sights too far. So, they’re like, “Okay, great. We’ve lost Atlanta. Let’s go launch five to 10 new cities.” For us, it was very calculated. we said, “Okay.” For us it was actually Charlotte because it was within driving distance and we didn’t have the money to fly, but let’s get to Charlotte, let’s put boots on the ground let’s get the best brewery in Charlotte and build out that market.

So, in the hub-and-spoke model, you’d be very focused on who your next market is, where your next kind of geographic region is. And once you kind of sign that first marquee partner, double down and put all of your resources into building out that market ’cause you’re always gonna have more success. If we have 15 partners in one market versus 15 partners across the nation, the impact for your marketplace or your B2B2C business is gonna be that much better, because you have that saturation.

And then the last piece is really just talking about what I talked about earlier is when you go the route of suppliers, it is sales first. And in the startup world, they kind of have this mantra of do things that don’t scale, right? So, from your first partner to your 10th, when you get to your 10th partner, that is essentially what people qualify as having product market fit. People see enough value in your product to pay you for it. And there’s something there, right? And then when you go from 10 to 50, now you’re trying to figure out what’s your business model, how are you gonna charge for pricing? And then once you get from 50 to 250, you’re starting to think about scale. So upfront, it is sales, it’s relationships. It’s doing things that don’t scale, like handling all their support, going above and beyond to create marketing materials for them to give to their consumers, to help them better implement the technology. And then as you start to grow, there’s gonna be a tipping point where sales are gonna convert more into marketing.

So up front, no one knows who Oznr is. We have no brand equity. We’re trying to build that over time. But once you get to 250 partners, a hundred partners, start to become more of a household name. So, your marketing doesn’t fall on deaf ears. But if I email someone and say, “Hey, you should check out Oznr,” and they have no idea who we are, they’re never gonna open that email, they’re never gonna respond to us. But if they’ve seen us in the space, if they know that we’re in their market already working with somebody that they respect, that’s certainly gonna open the door for us. So, realizing that upfront it is sales, it’s hard work, is trying to get your partner count up to a point where people recognize you and then it’s flipping it to driving people to your website, having a demo link in there so that people can kinda enter the top of your funnel and then building out your sales team to do online demos and getting people set up in a more systematic manner.

CAROLINE: All right. All right. Great. Well, you make it sound easy, which it is not.

ERIC: No. Exactly.

CAROLINE: But yeah, I think it was really, really good practical advice. And thank you so much for sharing all of this with us today.

ERIC: Absolutely. It was my pleasure.