A lot of times innovation happens in one silo and jumps over the fence to another. For example, there were consumer social media sites and then someone started Yammer, an internal corporate focused B2B social network that was bought by Microsoft.
Slack, Trello and the Chicago Techstars company Tribe are all business focused apps that will eventually make the jump to consumer. Usually, if there is a need case in one silo, there can be a need case in the other.
Why don’t companies attack both?
The reason is resources and market size. Consumer markets are usually really big and fragmented. They are hard to roll up. There is a lot of noise, and it takes resources to connect with customers. Sales cycles tend to be short and consumers can be fickle. There can be a lot of churn.
In the B2B world, customers are often in silos. They are to reach, but sales cycles are longer and tougher. Corporations can be very tough to deal with. By the time you think you have made the sale, your champion is relocated to another job or left the company. Small and Medium size businesses are an inviting target but exhibit many of the same characteristics of the consumer market.
One other problems startups have in the B2B world is sustainability. When a startup pulls up to a big corporate customer, the corporate customer is reticent to buy anything because they don’t know if the startup will be in business in two years. It increases supply chain risk. When the technology is novel, there are no trade offs or substitutes. Once the target customer sees it, they can’t afford to run out of supply. They also need to make sure the technology is serviceable so if it breaks it can be retooled or replaced easily. Hardware startups have gotten a lot of funding in the last few years and I am sure they are running into this problem.
Often, the B2B market is more specialized. Operating conditions can be much tougher. How do you use an Apple iPad on an oil rig in the middle of the ocean? But that specialization means that profit margins are higher.
This morning, I saw that Zebra Technologies ($ZBRA) is bringing out a tough tablet for demanding conditions. Apple and the Droid tablets all make nice products. But they aren’t durable. They don’t work with gloves. They certainly don’t work with water. The Zebra tablets cost $1800 compared to an Apple iPad at $700.
I invested in a company based in Chicago that has this technology. UICO has tech that let’s you integrate touch into a tablet with gloves. When water runs on it, the tablet still works. Here is a video of it working with a watch.
When the weather gets cold, and you have gloves on, see if you can do this with your phone
There is more at the UICO website. They have the best capacitive touch technology in the world.