Uber Economy and the Vanishing Line Between B2B and B2C

A lot of SaaS companies are asking:

Are we a B2B company, or should we focus on the consumer market?

10 years ago, this was a completely valid question. There was a stark difference between the way consumers made purchases and the way businesses made purchases. And your marketing and sales efforts needed to be different depending on which group you wanted to target.

But the line between “business” and “consumer” isn’t nearly as clear as it once was.

There are two major trends driving the change:

Trend #1: Bring Your Own Device and Bring Your Own Service

Most people don’t want to carry two phones — one for work and one for personal use. Instead, they want one phone they can use for both work and personal activities.

The convenience of a combined work/personal phone propelled the “bring your own device” (BYOD) trend into mainstream adoption.

A newer trend called “bring your own service” (BYOS) also emerged. This trend is where employees use personal cloud accounts to accomplish their work tasks. BYOS is growing just as rapidly as BYOD did. Back in 2012, one study found that one in five employees used Dropbox to transfer their work documents.

At cloudHQ, we’ve experienced this trend first-hand.

We have cloudHQ users at almost every major S&P 500 company. Some use the service through a company account, but many are individuals who just want something that helps them do their job better.

Trend #2: The Uberization of Our Economy

The idea of Uber changed the way people are choosing to work.

When the financial crisis happened in 2008, record numbers of people turned to the gig economy, using independent contracting to make ends meet.

A few innovative companies took advantage of the trend, setting up business models that used independent contractors in new and unique ways.

Uber is the most famous example, of course. And now we’ll often hear of a new startup that’s trying to be the “Uber of X” for some new industry.

It’s having an impact within established companies too. From writing to accounting, tasks that were once performed by employees are now being done by contractors.

As more companies shift to the Uber model, we can see the impact it’s having on the workforce:

• A lot of workers stuck in part-time purgatory when they might rather be employed full-time
• Less full-time work
• America’s most independent workers are empowered as never before

4 Strategy Changes SaaS Companies Urgently Need to Implement

There are several things SaaS and cloud computing companies need to do to stay competitive in this new economy:

1. Drop the B2B vs. B2C Mindset

In the past, we sold to the B2B and B2C markets differently. We assumed emotional factors played a large part in B2C purchasing decisions. And we treated B2B purchases as if they were less emotional and more task-oriented.

But in today’s world, “business” decisions also have a personal element, especially business decisions which involve cloud computing.

You don’t have different iPhones — one for your work as a Lyft driver, and one for your personal life. You have one phone, and you use it to access both work and personal accounts.

Services like Facebook are further blurring the line between personal and business activities.

What if you’re a real estate agent? You’ll want to promote yourself on Facebook as a “brand.” But you’ll also want to share photos of your kids so your family can see. And you’ll do both activities from the same device, using the same Facebook account.

As our work and personal lives continue to converge, so will our technology.

In a world of Uber and Bring Your Own Service, people make “business” purchase decisions the same way they make personal purchase decisions: with emotion.

That means whether you’re selling to a consumer or a business, you should be using both emotion and reason in your marketing messages.

2. Useability

Software companies haven’t always designed their products to be easy to use.

“We’ll train people on our software,” they often said.

The “training” approach doesn’t work anymore. Companies that use the Uber model for their workforce aren’t spending time training employees — because they’re not actual employees.

That means the user of a service is more empowered than ever to choose which service he or she would like to use.

The more useable your SaaS product, the better off you’ll be in this new competitive landscape.

For example, look at the explosive growth of Slack. It’s an application designed for business, but it’s incredibly easy to use, which is why so many people have now adopted it.

3. Support

In the old world, you could make a SaaS product for a consumer population and not provide direct support for it. It was a “consumer” service, and people seemed to understand those kinds of products didn’t always come with a help desk phone number.

Today, that approach isn’t enough. People are now relying on personal cloud computing accounts to accomplish work tasks. That means when they get stuck, they need help immediately. A great reference is Apple. Its Genius Bars are constantly full, but they also just recorded their most profitable quarter ever, reporting a $11.1 Billion in profit.

The correlation between on-demand customer service and profit isn’t a fluke. Consumers expect customer service.

4. Privacy and Security — The Elephant in the Room

Finally, it is no longer acceptable to say that “business” solutions have better security and privacy than “consumer” solutions.

Why do consumers (individuals) need less security and privacy than businesses? It doesn’t make sense.

It doesn’t matter who uses your product. Cloud applications require privacy and security, period.

The Future — Where We’re Headed

The world of work is changing. People are switching jobs frequently, they work for multiple companies at once, and increasingly, millennials are choosing to become full-time independent contractors.

Make no mistake: high unemployment was a major cause for these trends, along with advances in technology.

The economy has been good the last few years. Still, if we learned anything from the Great Recession, it’s that markets don’t stay in growth mode forever.

The next recession will come. Soon. When it does, I expect it will only make the trend toward “Uberization” that much more common.