Here is my latest Forbes piece: http://onforb.es/1l1WCka.
Let me know your thoughts!
There are a million things you can do wrong when pitching a person, company, or organization. These 3, I believe, are the biggest no-nos.
Mistake #1: You make your pitch via email
We all do it early on in our careers. We are sending an email to someone (sometimes to someone we don’t know) and write a wall of text expecting them to read an email that would take 5-10 minutes to process and then respond to us with interest. It is the classic rookie mistake. The mistake being that the initial email to someone, whether you know them or not, should be short and should pique their interest to find out more. The goal is to grab their attention in five sentences of less, not to close a deal via email.
Mistake #2: You don’t ask for next steps in a meeting
One of the biggest mistakes BD people make when pitching is to not ask for or lay out next steps at the end of a meeting. If you go through an awesome presentation but you don’t seal the deal (or at least lay out the plans to seal the deal), well I hate to tell you, but you just wasted your last hour. Make sure you ALWAYS end a meeting with all the next steps (even if that means the person you were pitching needs to go back to their team to talk). After you get back from your meeting (usually next day), make sure to send these next steps via email to solidify them. If you don’t do this, the deal will, almost always, fall by the wayside.
Mistake #3: Assume you know what the other side cares about
This mistake is the ultimate BD/Partnership blunder. Every BD person does this at some point in their career. You head into the meeting with someone you want to work with and make a ton of assumptions (the worst being you know what they care about). This is why at every meeting I go to, I make sure that one of the first questions I ask is, “What do you folks care about right now?” (or, “What’s important to you?”) Another good question to ask is “What are you working on?” as usually whatever a company is working on at that moment is not public information and there is no way to know the answer unless you ask.
While these three mistakes might be the biggest, they are by no means the only mistakes BD people make. By, at least, identifying these you may be able to avoid them and be on your way to closing more deals.
"So you wanna be a rock superstar?
And live large, a big house, 5 cars, you’re in charge
Comin’ up in the world don’t trust no body
Gotta look over your shoulder constantly”
- (Rock) Superstar by Cypress Hill
At startups, the worst thing you can do is get too comfortable after a big announcement. Case in point, yesterday’s big Dwolla announcement. There is no room for complacency and your team needs to continue to work towards the next milestone, whatever that may be.
This doesn’t mean you can’t enjoy the win or you should jump to the next thing (sometimes the next thing is just continuing to make the present thing better and better). It just means you should continue to sleep with one eye open. Remember, the actual blood, sweat, and tears at startups happens behind the scenes and are not part of the splashy press announcement.
Bottom line: Don’t get too comfortable. Keep striving for better.
Today’s post can be found on FullStart’s website. I like what FullStart is working on and am grateful they wanted me to post on their site first.
This is a great subject in business development and I hope people learn something!
You can find the post here.
Expectations at startups are a funny thing. You want everyone to be optimistic about your business, you want to always keep the excitement and energy, but how much of that should be living in reality?
One of the biggest mistakes I see other BD/Partnerships people do is oversell the progress between their company and a partner. They have a good meeting or two and share it with the team without putting the proper disclaimer on it. BD deals fall apart all the time. Sometimes it is the employees’ fault, other times the priorities don’t match up and your partnership gets punted a few months out.
This can have a major negative effect on your team. Remember, the BD/Partnerships team is used to rejection, unlike your community/product/engineer/support team. So if you oversell a partnership internally, a) they will think you can’t do your job, b) they will be majorly let down, and c) subsequently overall morale will take a hit.
I’ve seen this happen majorly at companies before. One company I know was in very early on acquisition talks (not a BD deal, but similar in concept). The company was doing okay, but not well enough to justify another round they would need to raise in less than 6 months. The CEO shared the acquisition talks with the team. The team could only think and talk about this for 3 weeks until the deal fell through over pricing. Morale was hit in a big way and the company never recovered.
Similarly in BD, if you have a big deal you are working on, if you are at a point you are sharing it with the team, make sure you explain to the team that the deal is still a big question mark (even if you are positive it will happen) and that you will keep them up-to-date on the progress. Better to over-deliver. Trust me. Letting down your team is sometimes an irreversible scenario.
P.S. This is a timely post as last night Louis CK launched his new $5 show. He now accepts Dwolla. Brian Kil had been working on that deal for months, but we didn’t share it with the team because we knew it could fall apart any moment (we didn’t know 100% until this past Friday).
Networking, physical and digital, is a crucial piece of Business Development and Partnerships. I have written about it many times- but I think there are two things that not everyone knows and would be helpful to share.
You Don’t Always See Immediate Results
This is very important. When you put in a lot of time into networking, there is a chance you won’t see immediate results (there are also times when you do see immediate results- and this messes people up sometimes- expecting immediate results at all times). If you don’t see immediate results, don’t get discouraged, it WILL work out. You just need to continue meeting new people and strengthening ties with existing people. I see people give up all the time, thinking that nothing came from networking, but if they would stick at it- they would eventually see results. I’ve never met a well-networked person that hasn’t gained something from having a good networking.
Finding Pockets At Events
Make sure you are attending events where you know at least one person that knows other people attending. This leads to being sucked into pockets at events. These pockets are hubs of people congregating and can led to meeting a bunch of new people. This is a good thing and what I call finding pockets at events.
You don’t always need to go to events with people that know other people, but that assumes you feel comfortable going up to strangers and starting conversations. You’ll still need to find these pockets, but it will be substantially harder.
Both of these things aren’t the biggest things by themselves but are key things to understand about networking.
s/o to all the summer analysts out there. We know that u the new slaves.— Wu-Tang Financial (@Wu_Tang_Finance)
There are a few types of people when it applies to email. I think I’ve probably encountered most of them at this point in my career and would like to list some of them here. Understanding what type of person you are dealing with helps tremendously with correspondence and expectations.
Here are four stereotypical inbox folks-
The Fast Responder: This is the type of person who responds to every email within a 2-hour period. They don’t have the longest responses, but they are tied to their mobile phone and get back to you quickly. It’s tough to hate on this type of person because they respond to you when you email them (whether good or bad, it is better than silence). There are a few breakouts of the fast responder. One is the fast responder who knows you. Another is the fast responder even if they don’t know you. Some people are just nice and respond to everything. In both cases, the fast responders are great. The only downside is on their end: that being so “ON” probably doesn’t give them time for anything else besides work.
The Once-A-Day Responder: This individual usually responds to all emails in the morning or at night. During the day, they skim through their inbox and only respond to time-sensitive emails (i.e. changes to meetings that day, family, etc.). Depending on the individual, they can be a morning or night person. Personally, I’m a once-a-day responder. I’m a night owl and usually get to all my emails at night. I try to get them all done before going to bed, but sometimes I need the next morning to finish up.
The Organized One: This stereotype usually has crazy inbox filters with color coating and an exact strategy to be efficient with email dealings. They aren’t put into the other buckets because their strategy is a hybrid. Some filters get the fast responder, others get once-a-day, and a bunch goes into the empty abyss (inbox blow-upper). I sort of envy these people. I’ve tried to be The Organized One, but haven’t found a strategy I can stick to yet.
Inbox Blow-Upper: The last group here is aptly titled because they periodically blow up their inbox and claim inbox bankruptcy. They are the types that if you get lucky and catch them at the right moment you will get a fast responder persona. But most of the time the email gets lost in a inbox black hole. Inbox Blow-Uppers are not bad people. It’s usually not their fault. It’s usually founders of companies or executives who have so much inbound, and if they don’t have an assistant, it’s just not fair to expect them to respond to a large majority of emails. They have meetings day and night; have internal things to do (presentations, board meetings, etc.) and answering their email for a few hours is not their top priority. The best have other avenues to contact them (gchat, text messages, the PHONE!) and know if someone truly needs to get in front of them they will find a way.
So why is this important for BD? Well if you email someone who frequently blows up their inbox and starts over or responds to non-core things once a week you need to make sure you follow up periodically with a nice note, so you can get back on their radar. It’s not you, it’s them. You just happen to hit them at the wrong time (could be for a myriad of reasons) and a nice follow up and note could get everything back on track.
Did I miss any other email types? Share in the comments.
There are four outcomes for BD people who do product integrations/partnerships. They all result based on the quality of BD person you are + the quality of product you are selling.
The four are:
1) Good product + good BD person
If you are a good BD person and have a good product you can become legendary. Good products sell themselves and a good BD person can do that + a lot more. Smart BD people will try to put themselves in a situation where they would only be selling or pitching a good product.
2) Good product + bad BD person
This is hard to spot initially as the product carries the BD person, even if they have no talent. But it can only go so far. Once you spot this, as a founder or boss, you need to try to help develop the employee or let the person go.
3) Bad product + good BD person
This is a tricky situation. There are usually two possible outcomes: the BD person helps the product (+ team) make the product sellable and it becomes a good product + good BD person combo. Or the product continues to suck and eventually the BD person needs to leave. You can go one or two years with a sucky product, but after a certain amount of time the person is putting their career on the line by shopping around a sucky product. I’ve seen the situation go both ways, so it really depends.
4) Bad product + bad BD person
Obviously this is the worst scenario. There is nothing you can really do in this case. It’s painful to watch as the company is really going to be climbing the hill on two sides (product, talent). This never ends well.
When trying to express the relationship between a lead business development employee and a junior business development employee, the hunter-gatherer society analogy is best.
The hunter-gatherer society is one in which most or all food is obtained from wild plants and animals. The hunters hunt and gatherers forage for wild pants/fruits/grain.
Hunters, or the lead business employees, attempt to bring home the bacon by leading the efforts of closing big deals (capturing big animals) that will sustain the group or team for some time. Gatherers (or junior BD), on the other hand, focus on supporting the hunters by collecting small fruits and grains (small deals) and continuing the group or team’s momentum and sustainability.
In Business Development, the lead BD employee tries to take the junior BD employee under their wing to teach them to become a hunter. The gatherer in the BD structure is meant to be a short lived experience (think 2-3 years) and strong gatherers learn how to become hunters themselves. Because, let’s be honest, no one wants to be a gatherer lifer.
Hearing “No” is a big part of biz dev, partnerships, and sales. Early on you will have a desire to HATE when someone tells you no. The hate will not only be because you received a no, but you’ll also be angry at that person that gave you the no. You’ll think or say things like, “what an asshole” or “they just don’t get it.” But this is the wrong way to think and could ruin the opportunity to build a meaningful relationship with the other side.
Anytime you get a no, the absolute best thing you can do is find out why! Most people, in my experience, will tell you why it didn’t make sense for them (but you need to ask! they are not going to just tell you). It could be everything from your pricing is out of their range to they aren’t focused on X (X is whatever you are offering) right now (i.e. you are going to help them grow their userbase and they are focused on monetizing). I’ve even heard a company (happened to be a later stage startup) that didn’t do a deal because the founder’s girlfriend worked at a competing company so they worked with founders girlfriend startup instead (I was told this. It wasn’t a deal I was a part of this deal). You just don’t know until you ask.
Anyways, the point is that getting a no is an opportunity to ask why and understand what the shortcoming is. Sometimes it is something you can control, other times it is out of your control. But whatever the reason is, don’t hate when someone tells you no. It isn’t the time to lose focus on what’s important. And that is improving your offering so that you can turn them into a yes.
At every company I’ve worked for, about once a month, there has been someone who reaches out in a spray and pray way. What I mean by this is that the individual emails the same message to about 3-5 people at the company (the spray) and hopes one person will respond (the pray). While one might think that hitting up a bunch of people at a company would have a higher return of hearing back, that person would be wrong.
The spray and pray reach-out strategy is a terrible one that will immediately label you in 1 of 3 categories: 1) spammy 2) annoying 3) someone who doesn’t do proper research.
People at companies talk. They forward each other emails. Usually, the people in charge of things get emails meant for them. If a spray and pray email comes in to a bunch of people at a company, the email will be fwd’d to the correct person multiple times. Spammy + Annoying for the right person. The person is either going to ignore your email or go into your conversation with negative feelings.
If you are thinking of spraying and praying, forget about it. Do some research on who you really need to be connecting with, write a creative and concise email, and send it to one person! If you don’t hear back in a week or so, hit that person again with a nice and concise follow up. If you don’t hear back a week later, try someone else. One at a time.
On Tuesday May 21st, Union Square Ventures hosted a Business Development Summit for portfolio companies. Organized by USV’s General Manager, Brittany Laughlin, the event was from 9am to 5pm. Companies like Etsy, Foursquare, Shapeways, Sift Science, Disqus and more were in attendance. Unfortunately, I only participated from 12:30pm till 5pm, but I’d love to share some of what was discussed and learned at the event.
1) I missed the morning part of the summit, but on the agenda was breakfast, Lessons Learned, and lunch. Lessons Learned, from what I heard after, was different BD people sharing stories (ie lessons learned). This ranged from topics like staying focused, winning the deals you want, setting up a partnership decision-making framework, changing internal work policy to encourage uninterrupted work, building a partnership case study, closing future deals and more.
2) The afternoon had sessions on various topics like Deals, Customers, Partnerships, Team, Pricing, and Product. There were three 45 minute sessions, and three options per session, each session with 1 or 2 topics discussed. After the sessions there was a tools demo and wrap up. The tools demo was pretty awesome and everyone shared their favorite BD/Sales tools (I discuss some of them below).
3) Here are some of topics discussed in the sessions. Each one deserves its own blog post, but I’ve included a high level on each one.
a) How to determine best way to segment/size market (customers).
b) New Hires. How to find and onboard new team members (team).
c) Setting expectations with clients and internally (partnerships).
d) Pitch Decks. How to best tell a story to potential partners (pitching/sales).
e) How to determine optimal pricing model (pricing).
f) How to balance requests from key partners/accounts with the larger goals for the company and product (partnerships).
g) Aligning business goals to product goals, and vice versa (product).
h) Innovative deal structure design. Simple sustainable ones vs. custom deals for big partners (deals).
i) App Store Relations. What is important? (partnerships)
j) Speed of Deals. How do you quick start with iterative wins vs. shooting for big deals? (deals)
This is just a taste of the conversations had during the summit.
4) Before the summit ended the group spent about 30 minutes going around the room with control of the computer to show which tools they use the most. Here are my favorites (I’ve written or spoken about many of them before):
5) All in all the event was great. I had the opportunity to meet some new BD people in the USV portfolio, catch up with old friends and potential partners, and learn some new methods I can begin to incorporate into my daily routine.
I get many inbound questions about first time BD jobs. The questions range from salary to if one should take the job or not.
The most important thing one should know about first time BD jobs is that if you are (or are going to be) the person responsible for closing deals and scaling the business, you need to either reject the offer (if you haven’t started yet) or quit your job (if you are currently that person). I honestly don’t care about how much you believe in the company. There is a 99% chance you will fail at your job.
The problem here is that without someone showing you the ropes, you will make mistakes. Sure, there will be some wins, but for the most part it will be trial by error. In the startup world and with a company that depends on partnerships, you can’t make elementary mistakes. They will kill you. You may even be dead without knowing it.
To combat this, in your first BD job you need a boss who will help you avoid these mistakes. I always tell people that if there are two first-time BD offers on the table: one from a startup where you are the chief of deals and the other where you work with someone who has done it before. You need to choose the one where you will work for the person who knows what they are doing. Even if it is less money. This is single-handedly the most important thing you can do to start your career off right.
I’ve learned the hard way, when attempting to do a product partnership with another company (i.e. wanting them to integrate your offering) it is best to avoid people in business development roles. Business development can be great in many aspects, but in this area they will slow you down.
What I like to do is map out what an integration would look like. Who is needed to make the integration happen? It is usually a combo of product and engineering folks. If you have a strong offering that directly helps your prospective partner, you will go from zero to integration much faster by going directly through them.
Bottom line: In terms of product integrations, it’s a lot better for the product/engineering team to recommend something to the business side of company than the other way around.
I received an email last week from a friend. She wanted my feedback on the best way to ask someone she knows if they would be open to accepting an introduction. Her friend, Steven, had asked her for an introduction to Rachel. This is what I shared with her.
First Step: Ask Steven for a fresh email with the ask so you can forward it along to Rachel and add a note.
Second Step: Once Steven sends the email to you, forward it along to Rachel with a note in the body saying something like (obviously depends on context):
I hope all is well! My friend Steven from Company X sent me the below note. He would love to connect with someone at Company Y for his brother. See the note and let me know if you are interested in connecting with him.
The context here is my friend was looking to connect Steven’s brother with Rachel and her company for a job. Sometimes the context is introducing someone to investors, press, partnership opportunities. Just tweak the note.
Third Step: Tell Steven you asked Rachel and to stay tuned. Rachel will either respond or not. If she responds and says yes then respond and cc Steven on the email saying:
“Thanks Rachel. Meet Steven!
Keep it short and keep moving.
Fourth Step: If Rachel doesn’t respond within four business days, hit her again asking if she saw the email.
If she says no (in a nice way obviously) to the original email or the follow up- say thanks.
And this is the proper way to ask if you can make an introduction.