How to build a B2B start-up

The challenges of forming a start-up in the B2B space

Building a successful start-up is always a challenging experience. And building one in the business to business (B2B) space brings its own special challenges, according to Glen Coates.

Coates, an Aussie ex-pat working in the US, is the CEO of Handshake: A New York-based start-up that produces an iOS and Web app for B2B sales and order management, allowing sales reps to write and receive orders on their iPad or iPhone. "What we're trying to do is bring that really visual really convenient modern experience to a market that doesn't really particularly get served that well," Coates says.

"There's a lot of tools out there for B2C [business to consumer] in that space but B2B is not particularly well served, so we're trying to be the leading solution in that space."

Techworld Australia recently caught up with Coates to discuss the lessons he has learned while trying to build a B2B start-up.

Development of Handshake began in mid-2010 and it hit the iTunes app store in November that year. It ran as an open beta until July 2011, when it converted to a $25 per seat subscription model.

Although the company's product is stable, development hasn't ended: "We're always iterating; it's always improving and there are always more features to come. We've definitely got a stable product that's being used by hundreds of reps around the world to do their jobs every day — it's sort of post-1.0, I guess."

Now that Handshake has a product, it finds itself dealing with a new set of problems. The company intends to build up its team over the next half year. "It's a lot easier to execute on milestones when you don't have users," Coates says.

"[It's easier] when you don't have users generating support and asking for things that weren't in the order you were going to [develop them]. Once you have real users you need more horsepower to keep hitting your milestones."

Coates studied computer science at the University of NSW, following which he worked as a developer at BigWorld, a Sydney company developing middleware for MMOs. "That was really interesting and really challenging, but I kind of wanted to move to America and I also realised that even though we were building this amazing tech, I had been working on the same stuff for a while and wanted to move on from game development."

At the end of 2007 an old high school teacher of Coates's contacted him. The teacher asked if Coates would work for his company, Envirosax, aiding the company's expansion into the US. Coates moved to California and ran operations and IT for Envirosax for three years.

"I learnt a lot about how B2B commerce works between brands and their retailers and about the relationship between brands and their sales reps and also what the reality of working a trade show is like," Coates says. "After a few seasons of doing trade shows, I was just like, 'Why isn't there something for iOS to do the job of being a salesperson at a trade show?'

"It's seems like every time I go to one of these fairs there's a few thousand people who are writing orders on paper still, even though most of them have iPhones."

There were other solutions out there, Coates says, but they were mainly designed for legacy platforms — "Palm Pilot era stuff" — and it seemed to him to be a gap in the market.

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