What ails B2B startups?

I met with a leader of a digital program recently. His company pushed the digital envelope really hard. And he preferred working with an ecosystem of some of the best B2B startups, run by some of the most brilliant minds you can find on the planet. Very agile, nimble partnerships with near zero red tape on both sides. Project done, product launched, cakes cut and champagne poured. All boxes ticked.

But two years into the program- sadly - the returns fell far short of the expectations.

When I met this leader and had a conversation, it was so apparent that the startups that worked with them have quietly faded in his memory and what remained with him was a plethora of problems and a lot of distrust. The leader thought he ended up with a lemon, or much worse, a poisoned fruit, in spite of all the good intentions and technology talent from both sides.

I asked whether the startups who developed and actually even continued to support the product remotely, know what was going on now? Barely. It became very apparent that they have moved on to the next big thing and the older clients have become probably 'uncool' for them. Or simply, they did not know how to manage the account.

I come from a world of IT services where 'Account management' was the primary - and many times the only - investment made apart from some fancy looking buildings in Bangalore. No products, rarely any innovation, and we asked 'how high?' and not 'why', even before the client asked us to jump. But that was one extreme I must confess.

Account management, in simple words, is making the customer succeed. In the short, medium and long term. Period. Even it it means that you take a hit in the short term. It is not sales, its not delivery, its not technology. And its not about milking the client to meet your quota either.

The B2B startups across the world seem to have everything else in plenty - Salespeople from the best management institutes, technologists from MIT/Stanford, and surprisingly, even excellent delivery project managers. But they seem to lack, in my observation, the basic principles of account management. Its a boring job for many, as Dilbert says. You need a very different temperament to keep an eye on the client, ear to the grounds and you need to even some times defy your own religion to make sure the customer succeeds. It doesn't naturally fit into a geeky environment. If you are an account manager in a cool startup, you are a perennial complainer with a low IQ compared to the smart techies.

A few years back an automation startup came to us and made a sales approach that would rarely fail. They courted our CEO and came from the top, took us for Michellin star dinners, sponsored events, gave eye popping presentations and ultimately got us to sign a partnership. One year later, they moved on to cut many more partnerships by citing ours. But we stood high and dry with a spaceship that never left the launchpad. A promise that remained sorely unfulfilled.

It will be wrong to say that they did not care. They did. They were very polite. They flew in super techies when we demanded . But they did not have any one who had the mindset to work with a single minded determination day in and day out, to see us succeed. The one who ironed out the boring stuff like helping us select the right use cases, work the best solution for our clients, work the ROI, transfer learning from other projects and so on. And smile when we won and feel the pain when we did not.

But then I realise that account management is not an intuitive skill. It doesn't come by wishing well or by reading a book. Its the most difficult cultural aspect amongst all the things I mentioned above. It takes a lot of cultivation and support in an organisation. It has to be built in from day one. The problem is that B2B startups seem to think that they can establish themselves by doing 'cool' things first and if and when they become 'big' they can retrofit fancy wings like account management. Thats why, in my humble opinion, many of them either fail or get stuck at 10 - 25 Mn top line forever. Then on, its a race to the bottom.

When you engage a B2B startup next time, ask this age old question: "Who is the one person who is going to fly or die with me for the next two years?". If the CEO or the CTO says "Oh!!! It's me. You are SO important to me", close the discussion. She can't do it. It just means that she doesn't want to invest in an account manager. Period. I have now seen enough of these promises fail.

Also, as an aside, I see a tremendous opportunity for mid sized IT services companies (200Mn - 2 Bn USD), who are less saddled with legacy workloads than the behemoths, but have mastered the art of account management, to possibly do what the B2B startups failed to do. And some of these companies are starting to invest in superior technologies and even products without creating a 'class divide' among the old and new. Maybe the next dark horse will be from this stable.