Pivoting from a B2C model to B2B at Carbo
By: Product Cracks
Tags: Product Management, Interview, B2B, Startup Lessons, Okr

The interview:

Tell me about the time you and your partners decided to go for B2B at Carbo

JL: Julien, thank you for taking the time for the first article of ProductCracks. Could you start by giving us some context on what Carbo is and your role in the organization?

JJ: We all know that global warming and environmental issues are in most people’s heads, but there are so many things to change that almost nobody can affirm they know where to start. In other words, the problem is identified (in general), there are tons of movements and actions but, if you’re not a “green” superhero, you’re a regular person like you and me, what can you actually do about it? That’s when Carbo came to our mind: how to fight against everyone’s “inaction” and how could we activate some simple actions for common people to start “acting” and not just reading or speaking about the environmental concerns. Of course, you have questionnaires and websites that are trying to fight against that, but, to my opinion and knowledge, these are too long, boring, and difficult for the average citizen to complete and feel committed. So when in early 2019, European banks decided to open their data to the engineering world, enabling tech companies to work on APIs to connect to one’s account and build financial products, we saw it as a great opportunity. We, my 2 partners and I decided to found Carbo. Our first idea was using people’s expenses to measure their carbon print and start a gamification/advisor relationship with our users. Basically, we knew people didn’t know how to select between their possibilities to make a positive green impact on the world, we attacked the issue by helping them to quantify their actions, without frictions and a long list of information needed from them: whatever small steps that you can do to save on carbon consumption and wastes, we intended to let you know and reward you. In short, we followed Nike+ or similar apps that help people create habits and make them feel better about themselves. You’re not “losing your time” in toxic habits such as scrolling on your Instagram feed all day, but making an impact: on you, and on the world!

Carbo doesn’t fight against global warming. It is intended to fight against the inaction towards the climatic changes.

So who are we? and how did we organize ourselves? Well, I met my 2 partners in school years ago… Emmanuel, our marketing guy and serial entrepreneur who had success building co-working spaces and leveraged the social media power to do so, and Simon, the sales force of Carbo but also the one with the best professional experience in the environmental issues among us. And finally, there is me, wearing the Chief Product Officer and Chief Technical Officer hats in the company. I am an engineer (from my education) with a business mindset. I’ve loved my journey as a PM to test things and now I can do it in my own company, being my own boss and the only one (obviously with my partners backing me) that can block myself.

JL: So I understand the model at first is directed to people like you and me, caring for the environment, B2C so-to-says. How did you envision monetization in the long term?

JJ: That is correct. So we started by proving our concept of measuring everyone’s carbon print with the amount and type of their expense. From there, we could enable you to compare your “performances” with others. We gathered a lot of data, behaviors and this helped us discover new important things to keep building our product.

Since the beginning, as the profile of the founders is pretty complimentary, we focused on saving on costs: bootstrap, free stuff, and homemade solutions. Still, to start earning money, on the B2C side as you say, we implemented a model linked to your carbon print and again, gamification:

in short, the most postive impact you make on the planet, the less you will pay for your subscription.

This was part of our MVP, we had this subscription running for our early users. Before you ask me how are the results, let me tell you that it wasn’t the only monetization angle we wanted to have. Of course, we knew that people already had to make efforts for the environment, so not the majority of our users were willing to pay an extra amount to do so. And frankly, our first hypothesis on conversion wasn’t met. But it has enabled us to run our operations: hosting the website, paying for the different tools we have for instance. Heavy users are obviously super proud of this, and share their accomplishments with their network!

JL: That’s pretty interesting, even if it sounds risky in the long-term I guess. Quick one: did you guys pay yourself a salary with this model?

JJ: Hmm not yet… We want to reach Product Market Fit and validate our model first, but also pay for our infrastructure or freelance needs.

Again, this business model was part of our first hypothesis, and within the DNA of the company, but we couldn’t survive only with B2C users.

JL Great transition thank you, so yes tell us more about pivoting to B2B, please!

JJ: Actually, since the beginning, we knew that we would create a B2B line or at least B2B2C. In retrospect, it was a mix of a few factors:

The problem we are trying to solve, following and reducing one’s carbon print on the Earth, isn’t important enough for one single person. Like I said before, everyone knows it is a problem but few people are actually ready to act, and moreover, pay for it.

Our target market in France isn’t big enough to only consider people like you and me.

in France isn’t big enough to only consider people like you and me. Our distribution strategy didn’t enable us to address the problem correctly, especially on the banking connection.

I suppose, if we had only suffered from one or 2 of the above factors, we might have chosen to iterate on our existing solution instead of pivoting…but we quickly came to the agreement that B2B was a must to survive, keep growing, and gain legitimacy.

The original idea was to apply the same feature to a company to measure its carbon print and their employees’. Rapidly, we also thought of selling our algorithm directly to the banks inside their own products and get paid through an API usage (i.e: based on the number of calls they would make). Why did we think about it? Well, in our user researches, we felt frictions on the customer side to share their bank information with us. So if we couldn’t grow our proper user base as fast as we wanted, at least we wanted to have a backup, and a “monetized” one, to make sure our “baby” will be useful. Remember two things: first, we are in France, with its own market limits and strong culture, and also, even if we were not directly impacting the environment, we had a shot to do so indirectly.

JL: At what stage are you now? Do you have any figures or achievements that you can share?

JJ: I can share a few figures yes of course:

On the B2C side, we have around 1500 Monthly Active Users , for a total of more than 8000 accounts created. We also noticed a 20% rate in retention after using the app for 2 months

, for a total of more than 8000 accounts created. We also noticed a 20% rate in after using the app for 2 months On the B2B and B2B2C, we counted more than 2 million bank transactions using our API and with our first MVP (launched in less than 2 months), we signed 10 customers.

Overall we have an NPS between 45 and 50, depending on the customer type.

What is interesting this year, is obviously the impact of the pandemic on our users! While a lot of companies are seeing their activities slowing down, ours is pretty steady or actually increasing. But, the impact on the planet is the one that counts and we saw a reduction of 65% of the carbon consumption in our users in the last months.

For more details, you can read the blog post we published on our site: https://www.hellocarbo.com/blog/calculer/confinement-et-impact-carbone-des-pistes-pour-un-apres-moins-carbone/ (article in French)

HR-wise, fun fact, apart from help from people we know and some interns, the team hasn’t really grown yet.

What is difficult on a personal level is that when you launch a product, you expect to reach Product-Market fit in order to be able to recruit operation people and start dealing with higher priorities on your side. We realized pretty quickly, all 3 of us, that it didn’t happen yet. Of course, we were disappointed but there was no way we were about to give up!

Good news though, while pitching our B2B idea, we actually signed a big contract before the code was ready, so we estimate we are on our path to PMF… We could actually start to hire people, but now we are faced with a new challenge: meeting the deadline. So after having talked with my founders, we took the decision to stay as-is for now, because it would take us more time to train people and get them up-and-running and meet our deadline with our client. Again, we are going to double our efforts to keep on with our dream! And then, we’ll accelerate the business and we will be able to grow the team.

For the French readers: On va retrousser nos manches et se remettre encore une fois au charbon!

JL: I know that you were a Product nerd, working with you at Viadeo, any specific framework that you applied to build on your ideas and roadmap and grow your team?

JJ: Let me start with what hasn’t worked for us yet: OKRs… While I feel pretty comfortable with this logic and I have been using it in my different PM roles, my associates couldn’t adapt. Being outcome-focused cannot be taught in one day: my personal analysis from this is that they don’t have the right mindset and haven’t been trained on this outcome-based concept. Moreover, as we are in a really uncertain environment, we might pivot every other week. In short, it is hard to change the goals so often, and it makes OKR irrelevant for our company stage.

On the positive side, we are totally “Lean”. We gather the feedback from our users, we put this in a business canvas to define what is the value proposition. We review this with our users thanks to different tools: user interviews, closed-beta features, and public beta features. This really helped us launch our first versions with a good quality last year, and even get traction from the press. We were really hyped in December 2019! However, as I mentioned above, we didn’t get the retention we were looking after, and figures haven’t reached the likes of our launch yet neither.

In terms of tools, to get those feedbacks and have qualitative ones, we implemented Intercom as a survey/chat tool, but we also decided to publish a “public” roadmap where users could help us define and prioritize our next features. To do so, we implemented Userfeed, which basically enables the users to vote up and down for the next features. Obviously, I was the one filtering it and making sure it made sense. Also, my job was to highlight the problems and avoid going directly to the solutions, as every good PM should do!

We bundled all this in a newsletter and it proved we were right to be exaggerating our customer-centricity because retention increased. However, it took and it is still taking a lot of time: not only to gather the feedbacks and re-prioritize them but also to follow up with your power users who accepted to give feedback.

If you claim to be user-centric and ask for feedback, it’s your job to get constant communication with your power users.

Finally, on the delivery side, with my Product Owner hat, we decided to go for KANBAN. We like the flexibility of the framework and we re-prioritize the board constantly with my partners, reviewing user feedback. Same as OKRs, I don’t think we are ready to implement SCRUM and/or Sprints yet. Still, we perform retrospective and demo sessions every other week to keep agile rituals alive.

JL: Thanks a lot Julien for sharing all this. Before we finish, I do have some more general questions for our audience: any interesting book or article on this or in general, that you can recommend us?

JJ: A concept that inspired me a lot is Jobs-to-be done: developed at Harvard in the 80s or the 90s (if I’m not mistaken), it is about how to keep innovating in product in general. Intercom recently published a free eBook on this that I really liked, because it is accessible and inspiring.

Intercom on Jobs to be done: https://www.intercom.com/resources/books/intercom-jobs-to-be-done

Another article that I can share with you is about how a startup called Superhuman reached Product Market Fit, their experience, problems, and solutions were very interesting, and the article as such got a lot of tractions.

Rahul Vohra, CEO and Founder of Superhuman: https://firstround.com/review/how-superhuman-built-an-engine-to-find-product-market-fit/

JL: Great choices indeed, and if you had to choose a couple of «cracks» that have inspired you in your journey, who would they be?

JJ: Again, on top of my list, I will put someone from Intercom: Paul Adams, their VP of Product. In general, I think he has a good ratio between being efficient, tracking and implementing stakeholders’ requirements while keeping a product approach in such a big company. I really liked his views on Jobs-to-be-done (to echo my previous answer).

Locally, in France, I will cite two people who are “Product Cracks” :

Pierre Fournier, ex-CPO at ManoMano who published various articles on Medium too (see: https://medium.com/manomano-tech/how-we-turned-manomano-into-a-product-centric-organization-21882d395011)

ex-CPO at ManoMano who published various articles on Medium too (see: https://medium.com/manomano-tech/how-we-turned-manomano-into-a-product-centric-organization-21882d395011) and Boris Golden, with whom we had the chance to work at Viadeo, who despite his change of role (he went from Product to Venture Capitalist), is really inspiring and helping startups to grow.

JL: We have an Intercom fan here! Thank you for your transparency. And to finish, what are the subjects you would like ProductCracks to address in the upcoming articles?

JJ: As far as I’m concerned, it would be interesting to know about a startup who had the same problem as us at Carbo: they created a product with a defined business model, it wasn’t getting the traction they wanted at first but they finally made it (reached PMF) by iterating on their solution, instead of pivoting like we had to.

Then, another subject I am curious about is what it is like to be a Product Manager for video games. I always wondered how they apply all the concepts that we can apply for our digital content for something so vivid as a video game.