You're starting a SaaS company. One question will define everything about your business:
B2B or B2C?
The choice isn't just about who buys your product. It affects your product development, pricing, sales, marketing, funding, and even the kind of team you build.
I built both types of companies. B2B company sold for $50M. B2C company reached 10M users but struggled to monetize.
Here's everything I wish I knew before choosing.
The Fundamental Difference
Before we dive deep, let's understand the core distinction.
B2B: Selling to Businesses
You sell to companies, not individuals. Your customer is an organization with budgets, procurement processes, and multiple stakeholders.
Examples: Salesforce, HubSpot, Slack, Zoom, Atlassian
B2C: Selling to Consumers
You sell to individual people. Your customer is a person with personal preferences, limited time, and individual purchasing decisions.
Examples: Netflix, Spotify, Duolingo, Headspace, Robinhood
The Spectrum
Most SaaS companies fall somewhere on a spectrum:
| Type | Customer | Example | Sales Model |
|---|---|---|---|
| Pure B2B | Enterprise companies | Salesforce, SAP | Enterprise sales team |
| SMB B2B | Small/medium business | Mailchimp, QuickBooks | Self-serve + sales assistance |
| SaaS B2B2C | Companies serving consumers | Twilio, Stripe, SendGrid | Developer/API sales |
| Self-serve B2B | Small teams, individuals | Notion, Linear, Loom | Pure self-serve |
| Consumer | Individual consumers | Netflix, Spotify | Consumer marketing |
Product Development Differences
What you build and how you build it differs dramatically.
Product Focus
Dimension | B2B | B2C |
|---|---|---|
| Primary goal | Productivity, efficiency, ROI | Happiness, health, entertainment |
| Success metric | Time saved, cost reduced, revenue gained | Engagement, retention, enjoyment |
| Design priority | Function over form | Beauty and delight matter |
| Feature depth | Deep, configurable functionality | Simple, focused experiences |
| Integration | Critical (works with existing tools) | Nice to have |
| Customization | High (enterprise wants control) | Low (opinionated UX) |
| Mobile | Secondary (desktop first) | Primary (mobile first) |
Development Team Structure
| Aspect | B2B | B2C |
|---|---|---|
| Team size at $1M ARR | 5-15 engineers | 3-8 engineers |
| Key roles early | Full-stack, infrastructure, API | Frontend, mobile, engagement |
| Design importance | Medium (UX matters) | High (delight is differentiator) |
| Data team | Important (enterprise analytics) | Critical (engagement optimization) |
| Infrastructure | Enterprise-grade, compliance | Scalable, low-latency |
Pricing Strategy Differences
Pricing is where B2B and B2C diverge most dramatically.
Pricing Models
| Model | B2B | B2C |
|---|---|---|
| Per user/month | ✅ Very common | Less common |
| Flat rate | ✅ Common for teams | Rare |
| Usage-based | Growing (API, infra) | Common (streaming, rides) |
| Freemium | ✅ Common (limited users) | ✅ Common (limited features) |
| Contract/negotiated | ✅ Enterprise standard | Almost never |
Price Point Comparison
| Category | B2B Range | B2C Range |
|---|---|---|
| Entry level | $10-50/month per user | $0-15/month |
| Mid-market | $50-200/month per user | $10-30/month |
| Enterprise | $200-1000+/month per user | $50+/month (rare) |
| Annual contract | $10K-500K+/year | Almost never |
Revenue Per User (ARPU)
| Stage | B2B ARPU | B2C ARPU |
|---|---|---|
| Early stage | $50-200/month | $5-15/month |
| Growth stage | $200-1000/month | $10-30/month |
| Scale stage | $1000+/month | $20-50/month |
Key insight: B2B ARPU is typically 10-50x higher than B2C. This affects everything from sales model to customer support costs.
Sales & Marketing Differences
How you acquire customers is fundamentally different.
Sales Models
| Model | B2B | B2C |
|---|---|---|
| Enterprise sales | ✅ Core for enterprise | ❌ Never |
| Sales development reps | ✅ Standard | ❌ No |
| Self-serve | Growing (SMB) | ✅ Standard |
| Product-led growth | Growing rapidly | ✅ Standard |
| Channel/partner | ✅ Common (resellers) | App store distribution |
Customer Acquisition Cost (CAC)
| Metric | B2B | B2C |
|---|---|---|
| CAC (typical) | $500-5000 | $10-100 |
| CAC (enterprise) | $10K-100K+ | N/A |
| Sales cycle | 30-180+ days | Minutes to days |
| Decision makers | 3-10+ people | 1 person |
Marketing Channels
| Channel | B2B Effectiveness | B2C Effectiveness |
|---|---|---|
| Content marketing | ⭐⭐⭐⭐⭐ Critical | ⭐⭐ Nice to have |
| SEO | ⭐⭐⭐⭐ High | ⭐⭐⭐ Medium |
| Paid ads (Google) | ⭐⭐⭐⭐ High intent | ⭐⭐⭐ Good |
| Social media | ⭐⭐ LinkedIn focused | ⭐⭐⭐⭐⭐ Critical |
| Influencer marketing | ⭐⭐ Limited | ⭐⭐⭐⭐⭐ Core |
| Email marketing | ⭐⭐⭐⭐ High (nurture) | ⭐⭐⭐ Medium |
| Events/conferences | ⭐⭐⭐⭐ Very important | ⭐⭐ Limited |
| Viral loops | ⭐⭐ Team invite | ⭐⭐⭐⭐⭐ Critical |
Unit Economics Comparison
The math of your business depends heavily on B2B vs B2C.
Key Metrics
| Metric | B2B | B2C |
|---|---|---|
| LTV (Lifetime Value) | $10K-500K+ | $50-500 |
| CAC (Customer Acquisition Cost) | $500-5000 | $10-50 |
| LTV:CAC Ratio | 3-10x (healthy) | 2-5x (healthy) |
| Payback period | 6-18 months | 1-4 months |
| Gross margin | 70-85% | 60-75% |
| Churn rate (monthly) | 2-5% | 3-8% |
Growth Efficiency
Growth Factor | B2B | B2C |
|---|---|---|
| Growth speed | Slow and steady | Can be explosive |
| Viral potential | Low (team invite only) | High (network effects) |
| Organic growth | Content, referrals | Word of mouth, virality |
| Network effects | Moderate | Strong |
Funding & Timeline Differences
How you raise money and when you hit milestones differs.
Funding Requirements
| Stage | B2B | B2C |
|---|---|---|
| Pre-seed/Seed | $500K-3M | $1-5M |
| Series A | $3-15M (ARR: $1-5M) | $10-30M (MAU: 1-5M) |
| Series B | $15-50M (ARR: $5-20M) | $30-100M (MAU: 5-20M) |
| Valuation multiple | 10-30x ARR | 5-15x MAU or revenue |
Timeline to Key Milestones
Milestone | B2B Timeline | B2C Timeline |
|---|---|---|
| First 100 users | 3-6 months | 1-3 months |
| $1M ARR | 18-30 months | 24-48 months (harder) |
| Product-market fit | Clear signals (NPS, expansion) | Viral growth, engagement |
| Scaling phase | 30-50 months | 18-36 months (if successful) |
Team Structure Differences
The people you hire and when you hire them.
Early Team (Pre-Product Market Fit)
| Role | B2B Priority | B2C Priority |
|---|---|---|
| Engineers | ⭐⭐⭐⭐⭐ Critical | ⭐⭐⭐⭐⭐ Critical |
| Designer | ⭐⭐ Important | ⭐⭐⭐⭐ Very important |
| Sales/Marketing | ⭐⭐⭐⭐ Critical early | ⭐⭐⭐ Growth phase |
| Customer support | ⭐⭐⭐ Important | ⭐⭐⭐ Important |
| Content/SEO | ⭐⭐⭐⭐ Very important | ⭐⭐ Nice to have |
Scaling Team
Team Size | B2B Structure | B2C Structure |
|---|---|---|
| 10 people | 5 eng, 2 sales, 2 marketing, 1 support | 6 eng, 2 marketing, 2 design/ops |
| 50 people | Sales 40%, Eng 35%, Marketing 15%, Other 10% | Eng 50%, Marketing 25%, Other 25% |
| Key hires at scale | VP Sales, SDRs, Customer Success | Growth lead, Community, Influencer |
Risk & Reward Analysis
The upside and downside of each path.
B2B Pros and Cons
| Pros ✅ | Cons ❌ |
|---|---|
Higher ARPU (10-50x B2C) | Longer sales cycles (months) |
More predictable revenue | Smaller total addressable market |
Lower churn (annual contracts) | Higher customer support costs |
Easier to get feedback (direct access) | Sales-heavy, less product focus early |
Clear ROI for customers | More complex pricing models |
Better for raising capital | Slower initial growth |
B2C Pros and Cons
| Pros ✅ | Cons ❌ |
|---|---|
Massive potential market | Very low ARPU ($5-30) |
Can grow very fast (viral) | High churn without constant innovation |
Product can be central focus | Difficult to monetize (ad vs subscription) |
Lower support costs (self-serve) | Competitive (hundreds of alternatives) |
Strong network effects possible | Platform risk (app stores, algorithms) |
Can be acquired by big tech | Venture model requires massive scale |
Exit Opportunities
How and when you might sell your company.
Acquisition Targets
| Acquirer | B2B Interest | B2C Interest |
|---|---|---|
| Enterprise tech | ✅ Very interested (add to portfolio) | Rarely |
| Private equity | ✅ Strong interest in profitable | Limited |
| Consumer tech | Sometimes (adjacent markets) | ✅ Very interested if growing |
| Strategic buyers | ✅ Highest multiples for strategic fit | Lower multiples generally |
Exit Valuations
| Scenario | B2B Multiple | B2C Multiple |
|---|---|---|
| Strategic acquisition | 5-15x ARR | 3-8x revenue |
| PE acquisition | 4-10x ARR (profitable) | 2-5x revenue |
| IPO (rare for both) | 10-30x ARR | 5-15x revenue |
Decision Framework: Which Is Right For You?
Quick Self-Assessment
| Question | If Yes → Choose |
|---|---|
Is your product for work/productivity? | B2B |
Does it solve business problems? | B2B |
Will companies pay $100+/month for it? | B2B |
Is your product for personal life? | B2C |
Can it go viral with consumers? | B2C |
Do you have enterprise sales experience? | B2B |
Are you great at consumer marketing? | B2C |
Founder Profile Match
If You're A... | Better Fit |
|---|---|
Enterprise sales background | B2B |
Product person, love building | B2C (or PLG B2B) |
Great at content marketing | B2B |
Great at social/viral marketing | B2C |
Patient, methodical | B2B |
Fast mover, high energy | B2C |
| Technical founder | Both work |
Non-technical founder | B2B (sales-driven) or B2C (marketing-driven) |
The Bottom Line
Choose B2B If:
- You want higher ARPU and predictable revenue
- You're patient with 3-6 month sales cycles
- You have or can build sales capabilities
- Your product solves business problems
- You want better exit multiples
Choose B2C If:
- You want massive scale and viral growth
- You're great at consumer marketing
- You can build delightful products
- You're comfortable with lower margins
- You can iterate fast based on engagement
The Hybrid Opportunity
Many successful companies blur the lines:
- Product-led B2B: B2B products with consumer-like buying experience (Notion, Linear, Figma)
- B2B2C: APIs and tools that power consumer experiences (Stripe, Twilio, SendGrid)
- B2C with B2B features: Consumer products with team/organization features (Slack, Notion)
The choice isn't binary. The best companies find their position on the spectrum.
At Startupbricks, we've built both B2B and B2C companies. We know the challenges of each path and can help you choose and execute your strategy.