I’ve written before about the four reasons why someone would want to partner with your company. They are: you’ll make them money, save them money, you’ll grow their userbase, or improve their product. Then once you determine what bucket you fall into, the question will be what are their priorities, or what is important to the other side. This will depend on where they are in their company cycle. Once that is determined they will want to know who you have done this (i.e. what you say you want to do) with before.
But there is one piece of the deal-closing puzzle that is missing from the above equation and that is “removing the friction.” If you can continually remove friction for the other side, the timetable of closing the deal will speed up by lightyears.
Just recently there was a brand we wanted to work with at SocialRank that seemed all into the product but for some reason was not moving forward with us. One of the people from the brand said something that tipped me and team off to why they were holding back. It was a big thing on their end but a small thing for us to add. They hadn’t expressed this properly to us but once we figured it out we decided to expedite the process of adding that feature. This is removing the friction of ‘yes we like it but can’t use it’ to ‘yes we are in!’
How are you removing the friction to close more deals?
Since 2012 I’ve taught a Skillshare class about Business Development and Partnerships. I eventually put the class on Udemy (which needs a little updating as it still says I work at Dwolla). This past week the fine folks at Coursmos added my class to their database. You can find it here.
The class is sort of a precursor to my book coming out (sounds surreal saying that). I’m excited. Ellen and I worked really hard on it and the people who have read it so far really like it. The book comes out on the 25th of July. You can pre-order it here.
Let me know what you think!
"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.
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).
I got an email from a recent college graduate this past week:
How many meetings does it usually take to close a partnership or what is the progression of what should be accomplished in each meeting? I’m referring to earlier stages where you are trying to make a name for yourself.
Here is the 3 meeting process I envision:
1) Exploratory, where you ask questions to understand the potential partner
2) Talk about partnerships, benefits, how it can help, answer questions about what each party does, etc., and follow up with a BD deck that outlines how the partnership would work
3) If they like what’s in the deck, talk about how to actually execute the details of the partnership in terms of finalizing details
Please let me know where this is flawed. Thank you, Alex.
This is quite close, but the truth is that some companies move quickly, others take time. There are many variables, including size of company, priorities (i.e. are you hitting on something they are actively trying to solve?), etc. I’ve had deals that have closed in the first meeting, and deals that have taken months. Just keep this in mind, and let whatever will happen happen. If you see the opportunity to close immediately, do it. If you sense it will take a long time, don’t push for a quick close (this will turn off the partner). Use your judgement!
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.
This past week I was in a meeting and someone said, “people respond to a ticking clock.” That line resonated with me as it is so true. Whether it is a partnership, website deal, or fundraising, ticking clocks make people act.
When launching a new product with other companies, the ticking clock helps when you tell them you need an answer by Date X that they’ll be involved or not. I’ve used this strategy many times and it usually has a strong success rate. There are a few companies that drop out last minute, but if you have 30 partners, you should expect 20-30 to go live with you (although recently I’ve changed my thoughts and think a few solid launch partners are better than 30 okay ones - mostly in terms of time management- but that is for another post). This is a lot better than launching a product with no one.
The companies that succeed in fundraising typically put a drop dead date on when the round is closing. When you do this, you get answers fast. Getting nos (along with the yeses) are better than getting a work-around or drag along. Putting a ticking clock around your fundraising will help you in all aspects of closing and will help you get back to what is important: your product.
Bottom line: People respond to a ticking clock.
Today’s article is a guest post on Fast Company. I’m excited about it as this has been an article I’ve been meaning to publish for a long time (I wrote it on my little vacation in June).
You can find the post here.
Let me know what you think.
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 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.
I’ve been teaching Skillshare classes since November 2011. I think it is awesome. For me, it’s part knowledge-share, part networking. I have kept in touch with many of the people who have taken the class, and many of them have gone on to get jobs in BD at startups or start their own company.
One of the biggest things I have been asked regarding my Skillshare class is if I can come to teach in a different city. Well, I can’t, but instead, I am teaching an online hybrid Skillshare class in April. I have put the class up (here) and if you register you can get a new and improved Intro I to business development and partnerships at startups. I really hone in on the best of Intro I and break it down to the necessities.
There are 4 units, each with 4 sub-units:
1. Business Development Introduction
- 1.1 What Is Business Development?
- 1.2 Types Of Business Development (B2C, B2B, B2B2C)
- 1.3 Networking
- 1.4 Digital Identity
2. Partnerships Introduction
- 2.1 Understanding Other Companies
- 2.2 Four Golden Rules Of Partnerships
- 2.3 Prove It
- 2.4 Partner Feedback Feeding into BD
3. Rejection, Tools, And More
- 3.1 Rejection
- 3.2 Finding A Champion In A Company
- 3.3 Following Up, Reaching Out, Corresponding, Favors
- 3.4 Tools I Like
4. Pipeline, Pitching, and Closing
- 4.1 Building A Pipeline
- 4.2 Getting In Front Of Someone You Don’t Know
- 4.3 Pitching
- 4.4 Closing
At the end of the class, you’ll be tasked with building a 30, 60, 90-day plan of how to be successful in the first 90 days of your new BD role. It can be hypothetical or practical. I’ll also make time for any class taker (can’t bring myself to call them students) if they want to connect via email/skype/sit down while in NYC for a visit/etc.
If you are interested in taking the class: sign up here.
When working in business development and partnerships at a startup, with a product integration solution, you are always looking to the next deal. There is never time to rest. You typically have an API and you need to hand hold the next partner to get their integration up and running.
This is not to say you can’t enjoy the wins as they come. Enjoy them. But remember with every new deal the expectations get higher, the numbers need to continue to go up, etc.
For all the glamour and sexiness that comes with working on the business side of a startup, the reality is that you are only good as your last deal and there is very little time to rest and enjoy current success.
Here is my latest Forbes piece: http://onforb.es/13I7xUX.
Let me know your thoughts!