B2B Incubator Looks For Vertical Expertise First

The art of investing in startups is challenging enough on its own, so a group of Australian investors is trying to improve its odds by focusing solely on B2B efforts.

“Our focus is on B2B products. With B2B, the benefits that those entrepreneurs bring having worked in the industry, and the relationships they have, often means they can test the product and find those first customers themselves,” Humphrey Laubscher, general manager of innovation at Loud and Clear told StartUpSmart.

Like most incubators, Loud and Clear provides the technical backgrounds for the companies, but is looking for segment knowledge. What makes B2B both more difficult and much easier is the inherent specialization. The startup needs to understand the customer needs to a much higher degree than B2C companies, which makes that background far more critical.

Loud and Clear managing director Cade Witnish was quoted saying that the advantage of its incubator program is that it won’t be reliant on the startups it invests in to generate revenue. “A typical incubator relies on a certain amount of startups coming through their doors to keep their lights on, but for us the agency does that,” he said in the story. “We prefer to invest in people rather than ideas. The reality is every startup is going to need to pivot, it’s going to need to shift and it’s going to need to change. If we don’t find anyone that we think fits the bill, we won’t do it. What we as a group think works best is when we have a non-tech entrepreneur who has experience in a particular field, provided their experience gives them an insight that other people couldn’t up with, and we couldn’t come up. (We are looking for) a niche in that industry that we can help them bring to life.”