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LaunchMotive
Questions founders ask

Should I sell to companies or to individuals?

The short answer

Sell to whoever feels the problem most and can pay to fix it, and pick one to start. Companies usually pay more and decide more slowly, through more people. Individuals decide faster but pay less, so you need more of them. Trying to serve both at once usually means a message that fits neither.

The difference

How are they different?

When you sell to a company, the person with the problem often isn't the person with the budget, and there may be a contract and a purchase order to get through. Prices are higher and decisions take longer.

When you sell to individuals, the buyer and the user are the same person, spending their own money. Decisions are quicker and prices lower, and you need many more clients to earn the same income.

Choosing

How do I choose?

Look at where your track record is. If your experience is in fixing a problem inside organizations, a company buyer will understand it fastest.

Then ask who feels the problem every week, and who has the authority to spend money on it. If that's the same person inside a company, that's a strong start. If the person who feels it is an individual paying their own way, price and package the work for them.

Later

Can I do both later?

Yes. Plenty of practices start with one and add the other once the first is steady. It's starting with both that causes trouble.

A worked example

What this looks like

Maya, an imaginary founder, spent years in hospital finance and now helps independent dental practices recover money lost to rejected insurance claims.

Maya knows hospital billing best, so hospital systems looked like the obvious buyer. But in a hospital the person who feels the problem isn't the one who approves the spend, and buying goes through several people.

At an independent dental practice, the practice manager feels the problem every week and signs off on small purchases herself. Maya started there. Hospitals can come later, once she has results to show them.

Read next

Where this fits

Who has the problem is the second question in the first layer of the Proof Path, the foundation. Read about the foundation.

Related questions:

Your next step

An honest read on where your idea actually stands.

The Startup Readiness Assessment takes most people under ten minutes and looks at the eleven parts of a business in the order they need to be solid.