If you're dating someone (with serious intent), you don't typically ask "what's your net worth?" on the first date. I'm sure both parties want to know the answer, but it takes time and effort to get to know each other well enough before a financial assessment. The reason is simple: a relationship isn't just about money. There are many other things that outweigh each party's purchasing power, debt level, salary, and more. (If you disagree, please stop reading the rest of this article.)
In the B2B world, it's the same: businesses tend to work with other businesses on a longer-term basis. They certainly make transactions, but the "bigger deals" tend to be multi-million dollar, multi-year contracts. Therefore, as buyers and sellers, they evaluate each other on several factors, including:
- Speed to value (how long it takes for a task to get from point A to point B)
- Customizability and flexibility (how much each party values the relationship and is willing to go the extra mile to do the 'unscalable' thing)
- Credibility (the gap between claims and actual deliveries)
- Resources (the amount of talent, capital, and network available to get something done)
Of course, there are many other factors as well. Many buyers prioritize these factors over pricing, which is a terrible indicator or reflection of the qualities of the relationship listed above. While it's understandable that buyers care about pricing as a financial metric for ROI, it typically doesn't make sense if it's the only or most important factor in a B2B deal.
Again, Just like dating (with serious intent to a long term relationship), a B2B deal often involves not just two individuals but two groups. It's typically two families for dating and companies or organizations for B2B deals.
This is where pricing or financial indicators fail even more to capture the intrinsic value of the relationship. Beyond numbers, two groups of people tend to only spend time with each other when there are cultural similarities, shared interests, and strategic alignment. None of these can be easily reflected in pricing or financials.
That being said, it's tough for most B2B software companies to show pricing to the general public because some things simply cannot be encapsulated by numbers. You might ask, how come there are so many software products out there with clear pricing and feature breakdowns?
When a software charges you $10-100 per seat or anything near that range, there's no relationship between your company and the provider's company. It's typically a simple transaction that can be settled without building a relationship. Often, this is exactly what the buyer wants – a fully productized and robust solution for their problems without the need to build relationships. However, some problems are too complex to be productized or commoditized. These are often deep, company-level problems that can only be solved through collaborative efforts between buyers and sellers. A simple transaction may seem appealing for both the buyer and seller at first glance. The buyers can get the solution easily and cheaply, and the sellers can monetize problems quickly and at scale. However, as the problem deepens and grows more complex, a $100 seat simply doesn't work anymore for either party.
Imagine software for controlling global temperature. How much should it cost? It's a complex issue, as whoever controls this would need to be appointed, delegated, and honored by the 8 billion humans living on the planet. The easier answer is "priceless." No price can capture the stakes of this decision. It's not a decision that can be commoditized or even democratized. Even if a cryptocurrency could use the market to reflect global intent for the optimal temperature every second, the exchange itself couldn't enforce the "fundamentals" of this decision. It would take the entire planet's resources to control global temperature, and its price is unknown.
For smaller problems, however, there's a good chance that the pricing can be "set" easily, upfront, with a lot of transparency. These are typically "common" problems that many people face, with little unpredictability and a high degree of certainty in both demand and supply. In other words, it must be a commoditized product. By the current standards of technological "wealth," this shouldn't be the case for most use cases.