The B2BigB Syndrome: How Large Corporations Quietly Kill Startups

In the late 2000s, I worked at a software publisher and one of my colleagues started a company. It was a kind of corporate Second Life, where an avatar could move around and trigger discussions with other people.

I don't remember the details anymore, but with hindsight and probably lots of exaggeration, I'd say it was like Gather but 15 years ahead of its time.

The application seemed to work well and the company was lining up meetings with major corporations that seemed super interested in rolling it out across their enterprise. We're talking about big banks, major energy suppliers, really serious companies.

Except it dragged on. A month. A quarter. A year. Then two. And eventually the company died waiting for an actual signature and, incidentally, some cash.

My friend unfortunately ran into the infamous B2BigB syndrome, this curse (a French one?) that tends to kill a lot of companies every year.

So if you're starting a company today or thinking about it, I invite you to think twice before prioritizing this segment, and that's what we're going to talk about today.

B2BigB

First, I need to define this acronym. In the business world, we tend to segment companies based on the customers they target:

• B2C (Business to Consumer), that's the general public.
• B2B (Business to Business), that's selling to companies.

For example, Netflix is B2C and Jira is B2B.

Among all this you have plenty of nuances. Microsoft sells in both B2C and B2B, for example. You have C2C platforms (exchanges between individuals).

But let's keep it simple and just talk about B2C and B2B.

Except "B" is broad. Between a 5-person company and a 40,000-person conglomerate, the way you sell to the two is very different. And in this category, there's a category of death: large corporations.

It's hard to really say when a large corporation begins, but you recognize them easily. A large corporation starts when a decision requires a ton of meetings, a quarter, a steering committee and board approval or a purchasing department sign-off.

In practice, you can even have 500-person companies that behave this way, even if it's more common starting at 1,000. But in any case, it gets worse with size. A quarter can become a year, or even 2, or even 5 (and I swear I've seen sales cycles that long).

Anyway, that's what I call the BigB (the big B's).

The big advantage of BigB's is, in theory, the ability to buy expensive because we're talking about deployment across an entire large corporation, so volumes that make most startups' eyes light up.

Except that, it's often a mirage. The moment you start looking at costs and margins, not to mention all the associated risks.

Gigantic Costs, Thin Margins

Working with a large corporation is often synonymous with complexity, and that complexity is financed by specialists.

You have to respond to costly processes (a 200-page security questionnaire, legal questionnaires, framework contracts, ISO certification this and that) that often requires a lot of specialists (lawyers, security experts, finance people, etc.). And that's just to get through the first step of the sales cycle.

To sell to a large corporation, you need to be prepared to spend a fortune.

By the way, it's worth noting that this doesn't prevent these large corporations from regularly appearing on the monthly data breach list. Because no, churning out Excel questionnaires is not synonymous with security quality.

After that, you're quickly going to fall into the spiral of quarterly meetings with a bunch of people you'll only see once in your life, some of whom will take advantage of their temporary power to take out their frustrations and pet peeves on you. And since you'll be in a weak position, well...

This time is time not spent on the product. Of course it's normal to spend time on sales, but we're talking about quarterly meetings to prepare, with McKinsey-style PowerPoints (you sometimes even see scale-ups calling in consulting firms to fill out these documents) that will require weeks of preparation.

Again, to sell to a large corporation, you need to already be prepared to spend a fortune and wait ages.

But let's imagine you've finally got the green light to deploy in a large corporation. The contract is signed. Now it's up to you to figure out adoption.

Actually, this is the beginning of a second nightmare.

A year has passed since the beginning of the sales cycle. All your previous contacts are gone. They might have been contractors who left the company. Or executives who got transferred to other branches of the group. And now you have to find the people capable of helping you deploy your software because without a doubt your revenue depends on how much the software is actually used. No deployment, no money.

So you're going to need a dedicated team of salespeople capable of navigating complex bureaucracy to find the right contacts, and maybe even a dedicated implementation team. Your costs are going to explode and you still won't have made anything at this stage.

With a bit of luck, and because you were smart enough to get a payment at signature, you'll eventually issue your first invoice. That will be paid 8 months later, end of month. The first 3 months having caused countless incidents because a purchase order needed to be signed and you had to go through 3 different departments for that. Bad luck, your cash flow is starting to choke.

You reach the end of the first year and then the purchasing department will come see you to renegotiate the contract, knowing full well that, in theory, they're your biggest client so it would be natural to do them a favor.

In short, 2 years later, you've spent a fortune, your cash flow is negative, and your margin has melted like snow during a World Cup ski race in Saudi Arabia.

OK, let's say I'm exaggerating and that despite everything, this contract allowed you to instead cross a threshold, to have an impressive signature to put forward and life continues for your startup/scaleup.

Actually, you don't know it yet, but you've invited a Trojan horse into your company.

The Loss of Innovation

Working with a large corporation means accepting the complexity inherent to that business. If it took you 2 years to sign a contract with them, imagine that everything else takes the same time.

Your product has to evolve to fit their way of working. You'll be asked for 12-level approval workflows, software integrations with ERPs, broken enterprise SSO, integrations with legacy systems from the 90s. And every company has its own internal jargon that you'll be asked to force into your software. You'll invoice in units of work, have a "purchasing" role in your RBAC schemas (authorization systems), in short, in reality, you're going to develop an extension of your first client's IT infrastructure with all its constraints, its complexity, its slow onboarding, and its costs.

And when you have a client representing 80% of your revenue (and even from 20% onwards it really starts to matter), you can hardly say no. So your roadmap is regularly hijacked by salespeople dedicated to this client, and globally a product that drifts away from the mass market.

And that's normal, hey, I'm not throwing stones at that team. If you've dedicated people to a client, it's normal they try to influence how you build the product and even if the requests are absurd. Because that team doesn't have the perspective needed to judge.

And when the roadmap is regularly sidetracked, it's also a huge amount of customization debt that will end up slowing the entire product. This big client may have allowed you to double your headcount. But 3/4 of the company will end up working for them, and will develop their own software culture, less UX sense, less sensitivity to product performance (no point working on acquisition or conversion, for example).

All enterprise software has terrible UX, because first, that's not what drives sales, and second, because after burning money in the sales process, certification and onboarding, you have to make savings somewhere, often on the product which is no longer really central to the relationship with this client. They'll try to reassure you by saying no, it's important, but actually, the product at that point has become a cost center that needs to be optimized to not lose more margin. Margin eaten by the consulting firm that helped you determine your deployment strategy and pricing...

But even when you "improve" your product for this client, you're going to continuously degrade it for all the others you thought you'd attract next by showcasing this win on your beautiful landing page. Because again, you're going to impose their complexity on all the other companies that could have been interested in your services.

I'm obviously painting a dark picture. And there are companies that specialized FROM DAY 1 in large corporations, that tailored their commercial offering taking into account all the associated costs. Deployments are priced at 100k, contracts impose minimum usage, everything was framed from the start because the strategy was always to expand exclusively here.

But for all the companies that think "just" doing a BigB to get a validation badge, but who actually target the entire SMB market and are looking for volume. It's rarely a good plan.

The Alternatives

At the beginning I said: "this curse (a French one?)". Why do I say it's a great French curse? Actually it's probably a magnifying glass effect and I'd certainly see the same thing in every country.

But every year, I see companies that die after quarters of waiting for that famous contract with a large corporation (just yesterday I was talking to someone who told me the exact same story). So I think there's something a bit different about us. We like to be different.

Partly, I get the sense it's related to the size of our SMB market which is less important than in Germany (the German Mittelstand seems bigger). We go faster from SMB to large corporations.

Obviously, then, in terms of credibility, it's easier to sell a product once you have the logo of a large corporation than a bunch of logos of unknown companies.

What's certain is that culturally, there's the CAC 40 and everything else. The CAC 40 has been basically the same companies for 30 or 40 years. By contrast, look at the S&P 500, in 1990 it was Exxon, GE, Philip Morris, IBM. They've all given way to Apple, Nvidia, Amazon, Google.

In France, the large corporations in the CAC are structurally stable and dominant, which makes them all the more attractive as clients for startups. They have budgets, longevity, legitimacy. But these same large corporations aren't springboards to a global market — they're markets closed in on themselves.

And conversely the SMB market can work. If I look at Pennylane, Qonto, Indy, Payfit, Spendesk, Livestorm, it's precisely by targeting this market that they've managed to go far.

By contrast, I have real questions about the strategy of a company like Mistral which seems to position itself only on large corporations (on-premise deployment, Azure partnerships, etc.) and seems to be neglecting the mass market.

I hope it won't be the future DailyMotion, which favored big media and telecom operators while missing the opportunity to become the B2C media platform that YouTube managed to become.

You'll have gathered, if you're starting a company today, I'd tend to advise you to not see "B2B" as a single big playground. I'd tend to tell you to avoid B2BigB which is often destructive for startups and often ends up leading to a dead end.

It's still possible, but you need to be armed for it. And if that's your choice, I'll only say one thing. Good luck :)

Targeting large corporations (and the public sector) obviously gives you access to larger markets. But I'd tend to recommend tackling that step later, when the company is already solid.

When DJI (Chinese drones) attacked the professional market, they already had a huge foothold in the B2C market. They came with an expertise and know-how that allowed them to be sovereign over their decisions.

Now if you're tempted anyway, the recipe for having a chance is above all a question of seniority of leadership: you need to know how to say no firmly, you need to stop chasing every rabbit that passes by when you see a so-called "low hanging fruit", the expression that has replaced "quick win" as one of my most hated expressions.

There's no such thing as effortless gain. Everything has a cost, even when it's hidden.

And you need a good financial and reputational foundation to impose these conditions, hence the advice to already have a good base on the other segments. It's easier to say no when a client represents 2% than when they represent 20%.

One strategy I've seen work several times is to create software with great UX, get adopted by the teams, then go see the purchasing departments of the companies in question and put the usage figures under their nose: "See, you already have 300 people using it, wouldn't you like to set up a framework contract and better understand usage at your company?"

That's interesting because you've created a product whose adoption happened from the teams, you didn't modify your roadmap, and you're in a strong position with procurement to improve your presence without being pressured on everything else. In short, make a good product, track usage, wait until you have enough footprint, and then go negotiate.

Anthropic (Claude Code) by first targeting individual developers (indie hackers, side projects) and small teams was pushed to constantly improve its product which became number 1 in its category (at the time of writing, this passage might age poorly :)). Today, they're selling enterprise licenses.

Good companies are able to do volume and then move up the chain, small companies then large companies. I've rarely (never?) seen the reverse. When you do large corporations, you don't know how to come back to the rest of the segments.