Two men kissing

How will your business change in a non-binary world?

planning risk strategy Feb 01, 2022

Last week there was an interesting survey finding: only 54% of UK 18 to 23 year olds are exclusively attracted to those of the opposite sex. This compares to 66% Millennials, 76% of Generation X (clearly not living up to their name), and 81% of Baby Boomers. A parallel survey in the US had similar results, marking what the researchers call ‘a generational shift’ in attitudes towards sexuality. This is attributed to there being less pressure for people to conform, experiences of more diverse lifestyles and role models, and the ease of experimentation thanks to Tinder et al.

As we write, the UK census forms are being posted. We can expect recent trends in the growing diversity of gender identity to be accelerated. Gender identity is now fluid and remains so. Readers of Iain M Banks will be aware of his predictions that humans will be able to use drugs to change and rechange gender regularly over long lifetimes. We may also encounter species with more than two genders, like the Apices of Azad, who are spared the hassle of procreation.

What can we learn from these changes? Simply put, many traditional polarities are no longer relevant. The world is not black and white, but has many shades of grey.

There is no greater polarity, both organisational and intellectual, than between the classification of businesses as B2B or B2C. Traditionally you are either one or the other. Selling to businesses and to individuals do feel like polar opposites. They have different needs, different methods of consumption, different budgets, different buying behaviours. They have distinct roadmaps and playbooks for growth. They go together like oil and water.

And yet they do have one important thing in common: people. The machines may be rising, but they don’t yet found companies and control every purchase decision. B2B firms are driven by people and relationships. In recent years the marketing world seems to have finally cottoned on to this fact, and as a result, we are seeing far more engaging and impactful communications in the B2B space. People don’t stop being human when they arrive at work. They still want to be engaged in the way they would if they were browsing for a holiday or ipad. That’s one marketing polarity that no longer exists.

We can go a stage further in challenging the polarity between B2B and B2C. According to McKinsey, six out of the top seven global companies by market capitalisation are ecosystem-led. (Saudi Aramco is the exception). Ecosystem plays are essential in a world driven by data, connectivity, network effects, fly wheels and value chains. It’s not enough to dominate one sector, you have to construct a winning system that captures value across multiple sectors, companies and agents. These ecosystems force firms to be both B2B and B2C companies simultaneously.

Look at Amazon, which blazed a trail as the ultimate consumer retail company. Now it makes more profit from AWS, fulfilment and payments. In 2020 it made over $15bn from hosting ads from other businesses desperate to capture sales on the Amazon platform. Facebook is another archetypal B2C company with 2.7 billion users. But they give away their product for free and make their money from advertisers. So they are really a B2B2C company, getting other firms to pay for a free service for nearly a third of the world’s population.

At what point do you need to start thinking about ‘the other’ polarity? Ideally, you do this out of choice rather than necessity. If your business is delivering growth and profit, then you should carry on focusing there. There is no point in weakening the core to develop a peripheral business. But there will come a time when it makes commercial sense to experiment.

The first place to look for B2C brands is which other organisations have similar customers to yours. Would they buy your service for their customers? They are more likely to do so if they are not directly competitive and if you can also solve a tricky problem they are wrestling with. This is the B2B2C model Moneyhub has been pursuing for years, getting their app into consumer hands via partner organisations.

The second question is how similar are the needs of the B2C and B2B businesses? Fintechs can leverage B2C infrastructure to quickly develop B2B offerings. Business banking is not the same, but it is similar enough to justify the experiment. Domain knowledge, capabilities and expertise count. What are the similarities and differences in your field?

Alternatively, you can try and leverage your knowledge, capabilities and expertise. Who would benefit most from them, either as businesses or the customers of another business? Starling bank seem to sit in this space, offering consultancy to bigger banks who lack their digital expertise. Hand-feeding tigers is brave. Selling data is somewhat safer. It is a valuable asset in itself and you will remain in control of its supply and potentially, its use.

Another approach is to invest in your capabilities and to try to monetise them. No one is better at this than Amazon. Their driver was the desire to turn their major cost centres into profit generators. They invested $18 bn over from 2005-2015 and created $239 bn of value. If parts of your B2C value chain can become more effective standalone B2B businesses, why wouldn’t you empower those teams? Teams can become divisions and in turn businesses.

While all these options may be seductive, they come with caveats. You don’t want to damage your core. You will be attacking on many fronts and so you will need the resources to develop each business. Success will create organisational and logistical challenges as you try to accelerate multiple businesses. Your business will become an ecosystem player and require an ecosystem strategy.

If you can manage these challenges, then why not embrace the future? There’s value to be created, money to made and insight to be gathered from becoming an ecosystem player. Don’t be held back by out-dated distinctions that are no longer relevant. Why not try putting your business on Tinder…?!


Startup know-how to give you the edge

Subscribe to THE ROLLERCOASTER, our fortnightly newsletter with actionable advice to manage the ups and downs of startup life.

We will never sell your data to anyone.