The Commerce Ventures Playbook: Finding Product-Market Fit in ‘Boring’ B2B Markets

While other investors chase the latest trends in AI and crypto, some of the biggest opportunities in B2B tech lie in solving decidedly unsexy problems. In a recent episode of Category Visionaries, Dan Rosen reveals how Commerce Ventures built a successful investment strategy around identifying and capitalizing on overlooked infrastructure challenges in fintech and retail tech.

The Power of Being Boring

Commerce Ventures takes pride in exploring opportunities others might consider too mundane. As Dan explains, “We just went through a pretty extensive analysis of next generation loan servicing systems.” This willingness to dive deep into infrastructure problems others ignore has led to some of their biggest successes.

Their first investment, Marqeta, tackled the unsexy world of card issuance and payments. Another early win, Bill.com, focused on B2B payments and accounts payable automation. Both companies are now public, each generating around a billion dollars in annual revenue.

Finding Hidden Opportunities

Rather than following market hype, Commerce Ventures developed a systematic approach to identifying overlooked opportunities. “We’re asking our partners, these large corporates, these individuals, and even looking at trends in startups, what are the big problems that nobody’s paying attention to? What are the opportunities that if you brought a new solution to market, you could unlock?” Dan explains.

This approach requires being deeply embedded in the ecosystem: “We’re distinctly knowledgeable in the sector we’re focused on, so being participants in the financial services ecosystem rather than analysts of it or observers of it.” This participation-first mindset helps them spot opportunities others miss.

Building the Right Network

Commerce Ventures structured their entire organization around finding these hidden opportunities: “We’ve structured the whole firm around this sector of focus, and it’s everything from where we source our capital, our investors’ capital, which includes large strategic corporations, Fortune 500 companies that are in our sector, to very strategic individuals.”

This network becomes crucial for both identifying problems and validating potential solutions. Their corporate partners often provide early insight into infrastructure challenges that could become billion-dollar opportunities.

The Evolution of B2B Infrastructure

Dan’s experience spans multiple tech cycles, giving him unique perspective on infrastructure opportunities. He notes how different things were in 2001: “Almost every business was relatively capital inefficient. There was no cloud computing at the time. Any software you wanted to build, you pretty much had to host yourself.”

This historical perspective helps them identify areas where infrastructure hasn’t kept pace with market needs. While consumer-facing technology has evolved rapidly, many back-office and infrastructure systems remain ripe for disruption.

Finding Product-Market Fit in Unsexy Markets

For founders targeting these markets, Commerce Ventures’ approach offers several key insights:

1. Look for Problems, Not Trends Instead of chasing popular themes, they focus on fundamental problems that persist despite available technology. Dan’s team actively seeks out these pain points through their network of corporate partners and industry experts.
2. Build Deep Domain Expertise Their success comes from being participants rather than just observers. This deep involvement helps them understand nuances that others might miss.
3. Focus on Value Creation The biggest opportunities often come from solving fundamental problems that affect large enterprises. Success in these markets isn’t about hype – it’s about creating real value.
4. Leverage Strategic Networks Their corporate partnerships provide both market intelligence and potential customers for portfolio companies targeting infrastructure problems.

The Sales Reality

Dan emphasizes that even in “boring” markets, success requires strong sales capabilities: “I would describe kind of venture capital as primarily a sales job. You’re really out there trying to pitch dollars to founders who oftentimes have, especially the best ones, have many other sources of dollars they could choose.”

This sales mindset is crucial for founders in infrastructure markets. The problems might be boring, but the ability to articulate value and build relationships remains essential.

Commerce Ventures’ success – with over 100 portfolio companies and multiple public exits – demonstrates that some of the biggest opportunities in B2B tech lie in solving unsexy but crucial problems. For founders willing to look beyond the hype and tackle fundamental infrastructure challenges, these overlooked markets can offer paths to building significant businesses.