Business Development: How to Open Doors for Your Company

Business development is extremely important for the life and longevity of a company, but let’s be honest, most people don’t know how to go about doing it correctly. Oftentimes the sales and biz dev teams are one in the same and have no differentiation, but the two practices rest at opposite ends of a spectrum.

Dave Balter, founder of BzzAgent, cofounder of both Smarterer and Intelligent.ly, and some could say an expert on the topic of business development, illuminated the differences between the two last Thursday night in his class “The Business of Business Development.”

Sales v. Business Development

Sales is the idea that you have a product that you’re going to get someone to buy. Salespeople are in the business of closing deals for their company and focus on relatively short term wins and bringing in revenue to the organization. To be good at sales, you must have the ability to find the budget, sell the idea, and be a closer.

“Business Development, on the other hand, is the process of creating partnerships that generate long-term value.  Successful business development may not lead to immediate revenue – instead it may foster co-marketing, create a new distribution channel or solve a critical production issue,” says Dave in his recent article on BostInno. Skills for a great biz dev team include researching, listening for the other company’s needs, patience because deals can take a long time, and problem solving.

4 Steps of Business Development

We here at Intelligent.ly love food metaphors, so we like to think of business development like preparing a dinner. The four steps should include:

  1. Setting the table.
  2. Planning the meal.
  3. Preparing to feast.
  4. Digesting.

It’s all about setting a clear vision for the company and mapping out your knowledge. Let’s take a closer look at each step.

Setting the Table

Business development is all about logic and making sure you understand where all the pieces fit together. To make it easier to see the big picture, map your industry and then use that map to bring people to your table via ego traps. Create large segments where you think consumers gather, and then plan those ego traps to call out companies by name. Some of these strategies include using the PRESS to tell your story for you–they have more reach and credibility, and using your blog to create your own content to flag users in it. Just remember, no matter how good you think you are, not everyone feels the same, so don’t act that way–be slick, but humble.

Planning the Meal

“The thing that makes business development fascinating is that the best deals have never been done before. There’s no template, no cookie cutter grind it out approach to making it work,” according to Seth Godin. Take the opportunity here to be creative and explore the plethora of options you have available to grow.

Once you have an idea of what you’d like to accomplish, choose a company from the industry map you created when you were setting the table and then map that organization. Know everyone’s role and then plot out how they all fit together. After you’ve done that, pair the players by matching up your people with theirs. Pair up your employees with their counterparts in the other company and have them interact. Use the phone to send a signal, as it’s more direct and personal than an email.

Beware of the troublemaker that resides in every company. He will screw up the deal if you don’t keep a close watch on him. Make friends with him and use him to your own advantage. Finally, after this is all set, write the brief.

Preparing to Feast

It’s very unlikely that you’re just going to clinch a deal and then everything will be all set and done. It takes time to win someone over, so it’s extremely important map the how. Know your documents:

  • MOU – memo of understanding – shows how we are working together
  • Terms sheet – really important because it signifies that across their organization, they have enough buy-in
  • LOI – letter of interest – says the terms aren’t finalized, but shows they’re serious by sending a letter, terms aren’t finalized, says you should bring this to your board

Run a pilot in this stage and set ways to test the effectiveness of it. Set goals and two KPIs, or key performance indicators. The first one should be a firm numeric goal. The second one can be softer. Based off of those results, you can roll out the real thing.

Digesting

This is the part of the process where you’re either energized by reaping the benefits of your hard work or you have to take tums as you feel the pain of an unsuccessful venture.

There are a few red flags to watch out for along the way to avoid that type of pain. Time is (often) your enemy. If someone is taking too long to make a decision, it’s usually not a good sign. One shot thinking can also ruin a deal, so you should aim for optimized thinking. Finally, narrow internal knowledge can show that employees are uninformed and that the company may not have clearly defined goals for themselves. Keep those warning signs in mind as you aim to strike a partnership.

Selling to Goliath: How to Build a Relationship with BIG Companies

Intelligent.ly Classroom SpaceGone are the days of schmoozing. Gone are the days of wheeling and dealing. The art of convincing a prospect that your company is the right fit via a meeting, a night out on the town, or drinks all around, is a dying one. By today’s standards, it just doesn’t make much sense. The game has changed for buyers. They’ve started identifying vendors proactively, hopping on the interwebs and narrowing potential candidates before making any contact at all.

Matthew Bellows, founder and CEO of Yesware, stopped by this to tell us what’s new in the world of sales, and what to do about it. During class, he emphasized the transition from convincing to building a relationship with your prospects. The point of starting a business is to make money, and this is crucial in deciding which customers to target and which ones to set aside. Regardless of which business you’re in, the cost of customer acquisition has to be less than the cost of customer lifetime value. You’re lose a few accounts along the way, but in the end, it’s just a matter of minimizing the losses.

5 Kinds of Sales (defined by David Skok of Matrix Partners)

  1. Freemium: In this model, some version of the product or service is given away, with the goal of up-selling or cross-selling over time.  (e.g. Yesware)
  2. No Touch Self-Service: Here you drive traffic to the web site using SEM/Pay per Click ads, SEO, Inbound Marketing, Freemium, etc. Visitors convert to paying customers without any need for salespeople. The product needs to be simple to understand, and have a compelling value proposition. (e.g. Amazon.com)
  3. Light Touch Inside Sales: In this model, you might provide some light level of human touch such as email exchange to answer questions and provide customer support. A slightly higher level of touch might involve a phone call with an inside sales person.
  4. High Touch Inside Sales: Here you still sell your product/service over the phone, but the amount of work in closing the deal requires several phone calls, sales engineers, and/or web-based demos.
  5. Field Sales (classic sales guy): Now you require an on-site visit using a field sales organization. You might also need multiple on-site visits, selling to several decision-makers, use of SE’s (sales engineers), and perhaps on-site proof-of-concept installations that take considerable SE time.

As you progress down the list, complexity and costs rise. The higher your contract value, the more complex the sales style you can afford. If it’s over $100,000, then you’re ready for field sales. If not, keep it simple, starting with Freemium if possible.

Cold-calling is your friend. Life is full of simple pleasures, and cold calling is not one of them. However, if you try it you’ll find it being the most effective way to get through to someone. It’s about being a genuine person. If you’re unsure about whether you qualify, you have bigger issues than sales to worry about.

To push or not to push? There’s some debate on whether or not to push your message or to ask, “Do you have a minute to talk?” On one hand it’s crucial to get your message out there quickly and efficiently. However, Matthew’s not sold that this is the best way.  If someone’s not in the mood to talk to you, then what are the odds of you having their full attention? What are the odds of them resenting you as a faceless bother? Pretty good. It’s much more effective to ask for a better time, perhaps a happier, friendlier time, for them to consider you as a business partner.

The second best answer is a quick no. There’s no point waiting around for an unreliable prospect, making calls, sending emails, trying to set up meetings, just be told “no” later on.  No means no, regardless of how semi-interested they want to come off as. If you feel like you’re being lead on, this is a never fail subject line to send to the slowpoke:

Don’t waste your time. Someone’s too busy or not interested? This will result in either, a) them telling you they’re not interested, saving both of you time, or b) them realizing they’ve been neglecting you, either carelessly or with good reason, and recognize that if a deal’s getting done, it needs to happen now. It’s like an ex-girlfriend that you probably won’t run into again. Done and ready to move on.

Find your Champion. Crucial for selling to big businesses, a champion is someone internal to the organization that’s going to carry your flag, trust you to not screw up, and be willing to bet the next 2-3 years of raises on the fact that you’re going to deliver.  Sometimes the biggest hater can become the best champion. If Luke had converted Darth Vader earlier on, he could’ve been making moves instead of being stuck in the moisture farm business.

For more information on David Skok’s Sales Complexity, click here, or learn more about Intelligent.ly classes.


The Hard Truth About Cold Calling from Yesware’s Matthew Bellows

Matthew BellowsAs a small startup, attempting to target and sell to a big company may seem daunting at first. It’s perfectly natural for “Where do I even start?!” to kick in. Matthew Bellows, CEO of Yesware, is ready to ease your fears, with precise insight into how to take your first steps. Cold calling, identifying a champion, and the big meeting are just a sneak peak into the topics he cover during Tuesday night’s Startup Selling to Big Companies at Intelligent.ly. We sat down with Matthew to learn a little more before the big night.

What is the biggest challenge that a startup faces when targeting a big company with their product?

It’s hard to narrow it down to just one challenge, but the most important one to overcome is finding a genuine champion to lead the internal conversations within the big company. Without finding that person, it’s just not possible to close a deal. I’ll talk about the process for finding and building a relationship with your champion during my class.

 What is the importance of cold calling?

Cold calling has three important benefits:

1) There’s absolutely nothing better for honing your 30-second pitch and getting a genuine conversation going.

2) It’s often the only way to get in front of older decision makers who don’t deal with email well.

3) Almost all sales teams want a majority of their younger salespeople making dozens of cold calls a day – so you just have to get good at it.

How has Yesware helped you hone your sales process? Can you provide any real-life examples?

Two major ways: the template libraries help me respond much more quickly and accurately to prospects, and email tracking gives me incredible insights into how people are responding to my emails. But I’m the only one on Yesware’s sales team – bigger teams have several more features that help with CRM syncing and collaboration.

The real-life example I hear about the most from salespeople is, “Yesware told me this prospect just opened my email, so I gave him a call right away. ‘I was just thinking about you!’ he said and I got the deal closed.” I love hearing those stories.

If you could be an expert in one skill by tomorrow, what would it be?

Synchronizing my body and mind. I’m not sure we’ll get to that in the class, but we can talk about it afterwards if anyone wants.

 

How to Pitch a VC Like a Pro

On Wednesday, Intelligent.ly welcomed Fred Destin, of Atlas Ventures, to teach a class on how to build and deliver a kickass pitch for VCs. Forget what you’ve read on all the startup blogs about the number and order of slides. A great pitch has much more to do with emotion, narrative and building relationships with your audience.

How to Pitch a VC

Fred explained that people invest in stories. We don’t buy Apple products solely because of their specs; its because we respond emotionally to the story Steve Jobs created. The stories companies tell are critical, but Fred noted that, “most entrepreneurs do a shit job of telling a short, memorable, effective story.” Why? Often because they know their product too well, and don’t know how to describe it to new people. And also because they fail to carefully craft and practice their pitch.

To fix this, entrepreneurs need to hone their story to absolute purity. This requires a lot of work and then a lot of practice. So much practice that it becomes muscle memory.

How to Build the Pitch

To create the pitch, Fred recommended brainstorming or mindmapping exciting things about your company. Then cluster these things into building blocks that can help you develop a narrative that you can own. Building a great pitch cannot be formulaic. It’s very difficult to sell things you don’t believe in. Don’t lose the aspirational/emotional story of your business by listening to what others tell you you are. Think about who your audience is and what you need to communicate to them. Make sure you craft a flow that will resonate with the people who are listening.

What You Don’t Need

  • Business Plan
  • Executive Summary
  • NDA

What You Do Need

  • Introduction
  • High concept pitch (3 words: “flikr of video”)
  • Emotionally powerful narrative

How to Deliver the Pitch
There is already enough boredom in the world. Stand out! VC’s fall in love with an entrepreneur within 5 minutes, with a company in 15 minutes, and then spend the rest of the time rationalizing their way back. A good pitch is not just telling what your company is about. You have to amaze, intrigue, raise people’s pulses and back it up with facts. Don’t be too intense, but neither too lax.

Do

  • Tell a story
  • Release your inner actor
  • Smile
  • Be true to yourself
  • Raise pulse levels

Don’t

  • Spend too much on macro/generic/market stuff
  • Use buzzwords, abstractions, buzzwords
  • Ramble on in answering questions

Pitching is like show business. Be confident—uncertainty kills decision making. When asked hard questions, give a reasonable answer and then be comfortable with silence. Don’t make the audience think too much, but let them own the “aha” moment. Don’t raise expectations yourself. Be humble and understated, then show them what you need. Anticipate weaknesses. And don’t make the mistake of pitching the market more than your company.

You can view slides from this class here.

 

Meet Dave Balter, Master of OGSM

When it comes to OGSMs, you could pretty much say Dave Balter (@DaveBalter)  is a machine. Get your mind out of the gutter! We’re talking about Objectives, Goals, Strategies and Measures—a killer way to manage your business for success.

And what better way to pick up some new tips and keep things spicy than to learn from the man himself? Dave’ll be bringing his mojo to Intelligent.ly and will be teaching a class on Leadership Fundamentals: Creating a Framework to Rally Your Troops. He answered a few questions for us giving a taste of what’s to come. Read on:

I.LY: You’re a 6x entrepreneur–what is one of the most important lessons you’ve learned about the birds and the bees of starting a company?

DB: There is absolutely no better feeling than building something out of nothing. That works for both companies and…well…ya know, the birds and bees type of stuff.   Kanoodling, as it were.  It just feels good.

I think the best lesson is that creating companies is all about continued progress.  You’re going to have ups and downs (not a sexual reference) and wins and losses, but if you keep focused on the end goal, you’ll make your way there.

I.LY: So, what’s the secret to a mind-blowing OGSM? Can you give us a hint? 

DB: Let’s start with the idea that life would be a whole lot more boring without OGSMs.  As a business tool, they can really inspire and motivate your team.  Often they aren’t perfect on the first try, but don’t get discouraged — over time, with more and more experience, you’ll get better and better at creating them.

I.LY: Can one achieve a killer OGSM alone, or is better accomplished through team effort? 

DB: You can create an OGSM on your own (and it may be pretty good) but the real success comes from generating OGSMs with your whole team.

I.LY: How many OGSMs have you taken part in delivering?

DB: Wouldn’t you like to know…

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Join us!

Leadership Fundamentals: Creating a Framework to Rally Your Troops

Tuesday, June 5, 2012

6:00 – 7:30 pm

500 Harrison Ave, 3R

Boston, MA 02118

Sign up here!