In some ways, yes. For all the attention paid to consumer-facing startups, there are more than 2X as many public tech companies with a B2B focus. Help

The problems with picks and shovels business models

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2023-05-25 22:30:05

In some ways, yes. For all the attention paid to consumer-facing startups, there are more than 2X as many public tech companies with a B2B focus. Helping businesses achieve their goals is a well-trod path to success.

There’s a debate if B2B = Picks & Shovels, but if you plan to pitch your business that way, here are two questions to ask:

First, asking if your product has broad utility is helpful because it helps determine how robust your startup will be to shifts in the market. Ideally, a tool has utility in multiple applications.

Using the Levi’s analogy, even though many 49'ers left Northern California empty-handed when the boom went bust, riveted denim made for relatively comfortable and durable pants well-suited for a rapidly industrializing economy.

The best picks & shovels startups can pivot to a degree. Stripe serves any startup that handles money, Shopify packages ecommerce functionality for most small vendors, and Unity provides a menu of tools to video game makers — all fairly broad customer bases.