Growing a B2B Business: Insights from Thejo Kote
Thejo Kote, founder and CEO of Airbase, met with Villagers and provided a comprehensive view on growing a B2B business. His insights, rooted in his impressive entrepreneurial journey, emphasized the importance of understanding customer needs, achieving product-market fit, and building a robust go-to-market strategy.
Identifying and Solving a Real Problem
1. Understanding the Market
Before founding Airbase, Kote identified inefficiencies in managing non-payroll spending while working on his previous company. He stressed the need for deep market research and a clear understanding of customer pain points before developing a solution.
2. Validating the Idea
Instead of immediately building the product, Kote created high-fidelity mockups and sought feedback from potential customers, refining based on their feedback. Basically he pre-sold the idea to gauge interest and commitment. This approach helped refine the product concept and secure early commitments from users without heavy investment.
Achieving Product-Market Fit
3. Defining Product-Market Fit
For Kote, product-market fit involves:
- Usage: Ensuring customers actively use and find value in the product.
- Willingness to Pay: Customers are ready to pay for the solution.
- Customer Segment: Identifying the right customer segment that has the problem and can be reached effectively.
4. Early Adoption and Iteration
He emphasized the importance of getting early adopters willing to work closely with your startup. These early users provide invaluable feedback and become champions for the product. It also allows companies to start building against a specific pain point and gradually expand the product's features based on customer feedback and market demand.
Building the Product
5. Initial Focus
Airbase started with a narrow focus on solving the corporate card management problem, a significant pain point for controllers and finance teams. This focused approach allowed Airbase to establish a strong initial foothold in the market and expand from there.
6. Expanding your Offering
After gaining traction with its initial product, Airbase expanded its offerings to include AP automation, expense management, and procurement solutions. This gradual expansion helped maintain focus while addressing broader customer needs over time.
Go-to-Market Strategy
7. Founder-Led Sales
Kote personally handled the first 15 sales, learning directly from customer interactions. This hands-on approach provided deep insights into customer needs and refined the sales pitch.
8. Hiring the Right Sales Team
When expanding the sales team, Kote focused on hiring for personality traits like grit, resilience, and a learning mindset. He found that experience in similar roles was less critical than the right attitude and capabilities. As such, he recommended hiring salespeople with the right personality traits for what you need. Train them to sell the product effectively by leveraging their unique strengths and approaches.
9. Market-Based Compensation
Airbase adopted a market-based compensation strategy, paying competitively within each local market. This approach allowed them to attract top talent globally without overextending financially.
Leveraging Global Talent
10. Remote and Global Teams
Airbase operates as a fully remote company, with significant teams in India for R&D and in the US for go-to-market roles. This global approach provides access to diverse talent and cost advantages. By leveraging global talent pools, Airbase managed costs without compromising on quality. They also implemented a market-based compensation strategy to attract and retain talent across different regions, ensuring competitiveness in local markets.
11. Equitable Inconvenience
To manage a distributed team, Airbase practices "equitable inconvenience," ensuring that no single team feels like second-class citizens. Meetings and collaborations are scheduled to fairly distribute the inconvenience across time zones.
Scaling the Business
12. Continuous Feedback and Iteration
Kote maintains a focus on continuous learning and iteration, ensuring that the product and go-to-market strategies evolve with customer feedback and market changes.
13. Strategic Fundraising
Airbase raised over $200 million in funding to scale its operations, focusing on building a replicable and scalable go-to-market engine. Kote emphasized the importance of having a clear path to revenue growth and product-market fit before seeking large funding rounds.
14. Building a Strong Culture
A strong company culture that values learning, resilience, and customer focus is critical. Airbase’s remote culture and emphasis on equitable treatment help attract and retain top talent globally.
Growing a B2B company requires a strategic blend of market understanding, product innovation, and effective execution. By focusing on understanding customer needs, building a strong foundation, leveraging networks, implementing a focused sales strategy, iterating continuously, and tapping into global talent, early-stage companies can navigate the complexities of the B2B landscape and achieve sustainable growth.