पाठशाला Pathshala · विचार Vichār, The idea · Lesson 17 · Build

B2B or B2C: the choice that decides your next five years

Selling to businesses or to consumers is not a label on the deck. It sets your ticket size, your sales cycle, your first hires and the capital you burn before revenue arrives.

Pathshala, The Founder Library · 11 October 2026 · 7 min read

A wild Asian elephant stands among trees in the Bandipur forest in Karnataka. — Photograph: Venkat Ragavan · Pexels

Founders often decide between selling to businesses and selling to consumers on taste. It is the most consequential arithmetic choice they will make in the first year. It fixes how many customers they need, how long each takes to win, who they hire first and how much money disappears before the revenue arrives.

This lesson sets out the arithmetic, adds what is different in India and ends with a method for choosing. The figure in the middle puts five motions side by side against the same revenue target.

The choice is a motion, not a label

The words B2B and B2C hide the variable that matters, which is how much one customer pays a year. Christoph Janz made this the basis of a much-quoted post, Five ways to build a $100 million business, in October 2014. To reach $100 million a year you need one of five herds: ten million users monetised at $10 or more a year through advertising, which he called flies; a million consumers paying $100 or more, mice; a hundred thousand small businesses paying $1,000 or more, rabbits; ten thousand mid-sized companies paying $10,000 or more, deer; or a thousand enterprises paying $100,000 or more, elephants.

Each herd needs a different kind of hunter. Flies and mice are caught by a product that spreads and marketing that costs very little per head. Rabbits are caught by self-service sign-up and inside sales. Deer and elephants need salespeople, demonstrations, pilots, procurement and legal review. A company that is built to catch one animal is badly built to catch another, which is why the choice shapes five years rather than one.

What changes: ticket, cycle and capital

The cost of winning a customer rises with the touch. David Skok’s Startup Killer, first published in 2009 and still the clearest treatment, describes a spectrum from touchless self-service through inside sales and channel partners to field sales. He reports acquisition costs from around $400 to $5,000 a customer depending on the level of touch, and as high as $100,000 for direct field sales. His two rules of thumb: lifetime value should be about three times the cost of acquisition, and the cost should be recovered within twelve months, or the business will need too much capital to grow.

The lit windows of an office building in New Delhi at night. — Selling to a company means selling to a building full of people and a procurement process. The cycle is long and the cheque is large. Photograph: Shantum Singh · Pexels

The sales cycle moves the cash. A consumer who sees an advertisement can pay in a minute. A mid-sized company takes weeks or months; an enterprise often takes the better part of a year from first meeting to signed order, and longer to first payment. Every month of cycle is a month of salaries spent before the revenue that justifies them. The [CAC, LTV and payback lesson](/library/cac-ltv-and-payback-the-three-numbers) shows how payback compounds into the cash a company needs.

The capital burns in different places. Consumer companies burn on marketing and on the scale needed before the unit economics work. Business companies burn on salespeople and on time. Neither is cheap. The difference is that a consumer company finds out quickly whether its acquisition cost works, while a business company can take eighteen months to learn that its sales cycle is twice what it planned.

What is different in India

Consumers fund most digital products by watching advertisements. The FICCI-EY report for 2025, in an EY press release, puts digital subscription revenue at about ₹16,300 crore against digital advertising of about ₹94,700 crore. A consumer founder in India should assume the flies model is available and the mice model is hard, unless the product is something people already pay for, which the [vitamins and painkillers lesson](/library/vitamins-painkillers-what-indians-pay-for) helps test.

Small businesses are many and pay little. India has a very large number of small enterprises, and most of them buy software the way consumers do: on price, through someone they trust and often by UPI. The rabbit motion works when the product is sold through the channel that already reaches them, a distributor, an accountant, a supplier, and when the onboarding is close to self-service. Sajith Pai of Blume Ventures asked in The Indus Valley Playbook whether a Bharat SaaS play is possible with every customer in India, and answered yes, by pairing software with transactions so that revenue grows with the customer’s business rather than a fixed fee. The same essay notes that many Indian software companies went abroad after finding greater willingness to pay in the United States.

Large customers pay slowly, and the law offers some help. Large Indian buyers often ask for long payment terms. A startup registered as a micro or small enterprise has a statutory lever: under the MSMED Act, as the government’s MSME Samadhaan portal sets out, a buyer that does not pay within 45 days of accepting the goods or service owes compound interest at three times the bank rate notified by the RBI, and the supplier can file the case on the portal. Knowing this changes how a founder negotiates payment terms. It does not shorten the sales cycle.

Divide the target by what one customer pays. The number you get decides the company you will have to build.

A worked example: one idea, two motions

A team in Hyderabad has built a nutrition coaching product: a dietitian on WhatsApp, a meal log and a monthly report. They can sell it two ways.

To consumers at ₹499 a month, about ₹6,000 a year. To reach ₹100 crore of annual revenue they need about 1.7 lakh paying customers at once, which means winning nearly 2,800 a month for five years before churn, and churn in consumer health is high. If each customer costs ₹2,000 to acquire, payback is under a year and the acquisition spend in front of the target is over ₹33 crore, more once churn is replaced. The team needs a performance marketer first and a dietitian bench that scales by the hundred.

To employers as a benefit at ₹1,000 a year per enrolled employee, with an average customer enrolling 500 people for ₹5 lakh a year. Now they need 2,000 companies, about 33 a month for five years. Each costs perhaps ₹4 lakh to win with a salesperson, a pilot and a procurement process, the cycle is four to six months, and the first hire is someone who can sell to an HR head. Counted from the first meeting, payback lands about a year and a half later.

Neither path is easy. The consumer path needs more customers than the team has ever thought about. The employer path needs a sales skill the founders do not yet have. Put both into the figure and the choice becomes a question about which constraint the team can more plausibly overcome.

How to choose with your eyes open

Answer five questions in writing.

How many customers does the target need, and have you ever reached that many? If the number is in lakhs and no one on the team has built a consumer distribution engine, that is a hiring problem before it is a product problem.

Who on the team can sell? Enterprise and mid-market motions need a founder who can run the first fifty sales personally. The [founder-led sales lesson](/library/founder-led-sales-first-hundred-calls) is a fair test of whether you want that job.

How much capital can you get, and when? A motion whose payback plus sales cycle runs past eighteen months needs patient money. A motion that needs crores in marketing to prove its acquisition cost needs a large first cheque. Match the motion to the money you can raise, or to what you can fund from revenue.

Is the cost of a customer back within a year? Skok’s twelve-month rule is a fair first filter. If neither motion passes it in the figure, the price or the channel has to change before the choice matters.

Can you avoid straddling? A product built for both consumers and businesses usually serves neither. If you must do both, sequence them: one motion until it works, then the second with its own team.

A quarterly check: is the motion still the right one?

Every quarter, rerun the figure with real numbers instead of assumptions: the revenue per customer you actually earned, the cost per customer you actually paid and the cycle you actually observed from first meeting to first payment. Write three lines beside it. The number of customers the target now needs. The number you won this quarter against the number the plan required. And the months from first meeting to payback. If the third number has grown two quarters in a row, the motion is getting harder rather than easier, and that is the moment to ask whether a different herd would be cheaper to catch.

The worked example and the figure’s defaults are illustrations. Statutory provisions were checked on the MSME Samadhaan portal in October 2026. Nothing here is legal, tax or investment advice.