How to Come Up With a Viable B2B Startup Idea

I’ll delve into the origin stories of B2B powerhouses, and explore the spark that ignited their journeys. We’ll dissect the thought processes of founders, the problems they tackled, and the ingenious solutions they crafted.

What defines an excellent B2B startup idea?

It all boils down to 3 essential elements:

Element 1: The problem matters to people.

• Many people should be eager to spend money on solving the problem. Startups often struggle not because their idea is bad, but because the market for the solution is too limited.
• To build a sizable business, aim for a path to $100 million in annual revenue and eventually reach $1 billion.
• For a useful framework, explore Hunter Walk’s LUV. Additionally, find insights on what defines a venture-scale idea and a guide to help you assess your market size.

Element 2: An underserved market

• Current solutions must be subpar in addressing the problem.
• Kunal Shah, founder of CRED, offers a valuable framework named Delta-4: How would customers rate the existing solution on a scale of 1 to 10? How would they rate your solution?
• For your solution to matter, it needs to be +4 better. If the existing solution scores 6 or higher, replacing it becomes challenging (think Excel).

Element 3: Your passion for solving the problem

• Choose a problem you’re eager to dedicate years of your life to solving.
• In the words of Dylan Field, co-founder of Figma: “If you are, let’s say, three to four years in on an idea that you hate, you’re just going to burn out and you’re going to quit. It won’t feel good, and you’ll be hating life. Don’t just go for an idea because it’s kind of working. Go for an idea that you really care about because even if it doesn’t work, you’ll still learn from it, and you’ll still have one.”
• Takeaway: Choose an idea that solves an important, underserved problem that excites you. More guidance on how to do this and what it entails is provided below.
• “It’s essential to work on something you’re deeply interested in. Interest will drive you to work harder than mere diligence ever could. When in doubt, optimize for interestingness.”
  — Paul Graham

Discovering a standout B2B startup idea

There are 3 dependable ways to find a great idea:

1. Past pain: Spot a significant challenge you faced in a previous job — then create a solution for it.
2. Ponder and probe: Choose an area you’re keen on, brainstorm and experiment while engaging with numerous potential customers — keenly searching for challenges and interest.
3. Present pull: Recognize something you’ve already built that is gaining traction — and shift your focus entirely to that.

Let’s take a look at how the largest B2B companies today discovered their ideas:

Path 1 — Past Pain for B2B Startup Ideas

Expected this to be the primary path for great startup ideas, but it only accounts for around 40% of them.

Examples of Success:

1. Gong:
— Pain: Understanding sales process issues.
— Solution: A system capturing sales insights for organizational visibility.
— Founder Quote: “The CRM was showing me stuff, but it wasn’t anything meaningful.”

2. Retool:
— Pain: Building similar internal tools repeatedly.
— Solution: Recognizing common building blocks and creating a universal tool.
— Founder Quote: “There’s got to be a better way of doing this.”

3. Linear:
— Pain: Disappointment with Jira for project management.
— Solution: Creating Linear to address issues with existing tools.
— Founder Quote: “This doesn’t feel right, and we should do something about it.”

4. Persona:
— Pain: Inadequacy in identity tooling at Square.
— Solution: Identifying a unique approach to address identity verification challenges.
— Founder Quote: “There was a disconnect between existing identity vendors.”

5. Hex:
— Pain: Inability to find a needed solution as a buyer.
— Solution: Taking the initiative to build what was lacking in the market.
— Founder Quote: “I didn’t set out to be a founder. The idea was very obvious to me.”

Reflection Questions:
1. What valuable tools were built at previous jobs for the company or teammates?
2. What tool do you wish existed (and would pay for) from your past work experiences?
3. Identify internal products repeatedly built at previous companies.

Path 2 — Ponder and Probe for B2B Startup Ideas

Key Approach:
- Action: Whiteboard and tinker, but validate ideas by talking to potential users.
- Focus: Find a problem space with traits: (1) importance, (2) underserved, and (3) personal excitement.
- Tip: Root the idea in experience, if possible.

Examples of Success

1. Figma:
— Approach: Focused on design after narrowing down potential areas.
— Insight: Recognized the significance of drones and WebGL for new possibilities.
— Founder Quote: “It makes so much sense on the whiteboard. And in reality, zero sense.”

2. Vanta:
— Approach: Explored team collaboration and security, going deep to find the biggest pain.
— Insight: Avoided the abstract by choosing specific spaces to explore.
— Founder Quote: “Pick one or two spaces and go really deep.”

3. Notion:
— Approach: Began as a no-code website builder, pivoted to focus on docs and wikis.
— Insight: Discovered user preference for collaborative features in the editor.
— Founder Quote: “Peeling the onion…we should double down on docs and wiki.”

4. Zip:
— Approach: Explored multiple ideas, eventually focused on procurement.
— Insight: Sought large markets with entrenched but subpar companies.
— Founder Quote: “Look for a market that was large and had entrenched companies that weren’t great.”

5. Databricks:
— Approach: Identified underutilized technology (Apache Spark) and aimed for a transformative impact.
— Insight: Realized the gap between academic projects and enterprise-ready solutions.
— Founder Quote: “Maybe we can really actually ourselves make it happen.”

Reflection Questions:
1. What emerging but underserved trend can you identify (e.g., security, collaboration)?
2. What transformative but underutilized technology could you leverage (e.g., data scalability)?
3. How many potential customers have you engaged with regarding your idea?
4. On a scale of 1 to 10, how important is the problem to potential customers?
5. On a scale of 1 to 10, how underserved is the current market, and where does your solution rank? Aim for a delta of at least 4.

Path 3 — Present Pull for B2B Startup Ideas

Key Approach:
- Action: Identify features or functionalities within your current projects that exhibit strong user pull.
- Focus: Pivot fully towards the aspects showing clear signs of demand and interest.
- Tip: Be attentive to what users are gravitating towards within your existing work.

Examples of Success:

1. Amplitude:
— Approach: Recognized a gap in analytics tools while developing a voice recognition app.
— Insight: Found market demand by sharing insights with others.
— Founder Quote: “They were like, ‘Wow, that’s amazing. I really need to understand that about my business.’”

2. Sprig:
— Approach: Initially exploring one startup idea, pivoted based on market demand.
— Insight: Used outcome-driven innovation to add rigor to product development.
— Founder Quote: “I’ll pay you for this. This was the market pull I was looking for.”

3. Loom:
— Approach: Evolved from two failed video-related projects, identified unexpected user pull.
— Insight: Discovered potential through a unique feature during client interaction.
— Founder Quote: “That made it clear to us that we should double down on this new direction.”

4. Segment:
— Approach: Created Analytics.js as a growth hack, noticed positive user response.
— Insight: Discovered potential in being an ‘API layer’ for data tools.
— Founder Quote: “That day, it goes straight to the top of HN, and the rest is history.”

5. Slack:
— Approach: Transitioned from an unsuccessful video game project, identified effective communication tools.
— Insight: Leveraged IRC features that users gravitated toward.
— Founder Quote: “We spent a long time working on reference letters…while we were thinking about what we might want to do next.”

Reflection Questions:
1. What feature or functionality in your current projects is exhibiting the most user pull?
2. What problems are you currently facing in your startup that you wish someone would solve? Consider solving them yourself.
3. Is there a side project you’ve been wanting to build but haven’t yet? Explore its potential and user interest.

In a nutshell, if you’re aiming for a standout B2B startup idea:

Look for ideas that are (1) important (2) underserved, and (3) you’re excited to solve.

Choose one of these paths and consider these questions:

Path 1: Past pain
- What valuable solutions did you or others create in previous jobs?
- Identify a tool you wish existed (and you’d pay for) in your past workplaces.
- Reflect on recurring internal products you built in previous companies.

Path 2: Ponder and probe
- Identify emerging, underserved trends (e.g., security, collaboration).
- Recognize transformative yet underutilized technologies (e.g., data scalability).
- Gauge the importance (1 to 10) and underserviced nature (1 to 10) of the problem you’re exploring.

Path 3: Present pull
- Pinpoint the one feature gaining the most traction from what you’ve built.
- Identify a problem in your current startup that needs solving; consider solving it yourself.
- Explore the side project you’ve been wanting to build but haven’t.

You’re onto something promising when you detect signs of pull and pain. Now armed with this framework, assess whether your idea is worth a full-fledged commitment.