If you’re a non-technical founder, while your team is building and refining your product, you’ve got to figure out what to do with your time. I find that first time CEOs often find themselves doing two things, neither of which is productive. First, they spend time throwing product ideas over to your tech team like grenades—blowing up carefully laid and simple product roadmaps, scattering them with feature creep shrapnel. They also enjoy multiple rounds of biz dev wack-a-mole—taking every inbound meeting that comes through their inbox and pinging people in their network and one circle away based on the biz dev idea of the day, flailing around the graph aimlessly like a wounded duck.
If you’re going to do product, do product. Product management is a fulltime job and if your product needs work before you want to throw people at it, it’s worth the time investment and focus. However, if your team knows what it needs to build and refine, then welcome to being the “Outside Guy/Girl”. While you should always be taking your learnings back to the team, the more time you spend out of the office selling and cutting deals, the better.
I’m a big believer that the right kind of business development deals can lead to fantastic results for a company—if planned well, appropriately simple, and executed correctly. I think it all starts with two things: The Standard Deal and The Pipeline. That’s what you get when you ask yourself “what do we offer", "who wants this" and "what's the simple deal that maximizes our ROI?”
The Standard Deal
The “standard deal” is minimum viable product for business development. It’s the kind of thing you can repeat in an elevator, simple to understand, universally applicable, and, most importantly, doesn’t burden your tech team with a lot of custom development. Often times, that comes in the form of analytics, which is what a biz dev partner would want in order to check on the success of the deal. Having good analytics is something every company should have from the beginning anyway, but it will take a little bit more work building a place where partners can login and check progress. A weekly report automatically generated to get sent out over e-mail is a good shortcut.
An example of a standard deal is the one that del.icio.us struck in the early days where newspapers would put a little “Tag this article” widget at the end of every story, and in return, they’d get a feed of the keywords used to take the articles, which helped them on search and ad targeting. Very simple, very effective. Tie that with the story of how it enabled more sharing and very few people turned it down.
MyBlogLog could “make any site social” just by pasting a widget. Disqus improves the conversation on any site. These are free deals where success means just getting these widgets out there on as many sites through as many partners as possible. Simplifying the deal means short legal contracts. What is your standard offering?
To me there are three measurements that you want to use to rank your business development pipeline. Size, and in the absence of any other info, you start at the biggest and work your way down, ease of use—the trouble or lack thereof that you’d need to go through to get something done, and relevance. A lot of people try to work with small easy partners first, but I’m not sure that’s a good strategy. For one, they can be just as time consuming, and perhaps less professional or process oriented. Two, if you strike an interesting deal with the #2 player, how much do you want to bet that the very moment it goes live, your closest competitor will be in offices of the #1 company in the market striking a deal—using your smaller deal as the example.
Also, business development meetings can be valuable for the information they give you over and above getting the actual deal done. You should know what it would take to ink a deal with your dream partner from day one—if for nothing else than to know where to set your goals and priorities.
Create an exhaustive list of all of your possible competitors. Don’t ever list CondeNast without listing every single other publisher you can think of. Make a very simple spreadsheet: Company, Partner Type (Publisher, Carrier, Reseller, etc), Contact person/e-mail, Size, Relevance, Ease of Use, and then a subjective priority score. That list should be *exhaustive*. There’s no reason why any company shouldn’t have 50 potential business development partners in their pipeline, maybe 100, and be actively working the phones, inboxes, and pounding the pavement to get the deals you need to get—be it for distribution, revenue, PR, or just to outflank a competitor. The latter is totally underutilized. If you go in and impress the top 50 folks in your space, it makes it that much harder for a competitor to get a deal done—because you’re seen as the category leader.
This is where you bring in your investors and advisors. Vet your deck with them… let them see how you’re pitching the company. It probably even pays to get all of them in a room to pitch practice and get feedback on your value prop to a partner. Then, once you’ve nailed the pitch, get them to go to work on your pipeline. Circulate your pipeline to your investors in a Google doc and ask them to put their names next to anyone they can introduce you do. Once they know and understand your pitch, the intros will be relevant—and there’s nothing worse than an investor who just randomly introduces you to a bunch of people that aren’t a fit for your product.
When all is said and done, and if you’ve nailed your pitch, you might consider checking out nextNY’s ABC (Always Be Closing) Pitch Event with the Daily News. Instead of pitching for investment, you’re pitching to get a deal done with the NYC area’s largest daily local. Applications to pitch are due this Friday at noon and can be completed using the Eventbrite link on the event page. The Daily News corp dev and digital teams will pick out the best 5 or 6 companies for a public pitch next Thursday, September 30th. If you have a startup that could use a publisher with a large local community as a partner, you have nothing to lose. Best of all, unlike most of the other biz dev partners in your pipeline, the Daily News has telegraphed their wants:
“…We are looking for partners to help us extend and improve our relevance to the local market on the web and through mobile applications. The focus is on useful information that helps people engage, interact and make decisions about their daily lives. We want to participate in communication, not push.
We are looking to better provide focused, service-oriented local offerings for the five boroughs.”
Happy pitching, and remember… second place is a set of steak knives and third place is “You’re fired!”