entrprnr
 
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CC: globalhighered.wordpress.com
(This is the second part of our comparison of two SeedStart BD speakers. See Part One here.)

What is business development? 

That depends on who you talk to. 

Meet Ben Luban, Director of BD at AOL and Florent Peyre, VP of Strategy and BD at GiltCity. They have similar titles, but Ben works at a big company, Florent at a fast growing startup. They definitely have similarities and differences in attitude. As an entrepreneur, you should know both perspectives of the deal.


WHO DO YOU TALK TO? 

Big Company says: Go to the BD guy.
Startup says: Go to the top. 

BEN: Start with the big company’s BD person instead of the CEO (the decision-making process will trickle down to BD person anyway). A lot of BD people have MBA/JD/Finance backgrounds, so they can do a lot of the negotiation and paperwork with you.

FLORENT: Think really big! Never feel like you should only talk to the BD guy – go straight to the top, because if you have a mandate from the top, it’s best. Once you finally get to the BD guy, he might not be that happy because it’s a forced relationship, so make him feel smart and loved; be super flexible. Remember, if you pitch the CEO, make sure you are pitching something substantial (don't pitch becoming a link on their site).


HOW DO YOU REACH OUT?  

Everyone agrees: A warm introduction is best. 

If you can’t do it au natural, then see if you can get a warm intro through someone you know on LinkedIn (entrprnr says: every single person you meet should be connected to you via LinkedIn). 
  1. Make the intro seamless so the liason can just cut and paste your request in email. 
  2. Make sure it’s a succinct, concrete pitch, not just “I think we should do business together." 
  3. Once the intro is made, follow-up immediately (don’t wait - you are the one who needs this). 
  4. Thank your contact and bcc him so he doesn’t get flooded with e-mails.
  5.  If you get the other guy on the phone, go into the pitch, but don’t immediately ask for a meeting. Some people just want to take a half-hour call and get a feel for their interest in your request.


HOW TO NEGOTIATE THE DEAL

Everyone agrees:  Get as much as you can, but more importantly, close the deal. 

Negotiating is fun but signing is better. Put yourself in their shoes. If your partner is bigger than you, this will help you understand what you can ask. At the end of the day, if it doesn’t work for the partner (even if you’re bound for six months) they will find a way to stop the partnership or make it harder (stop answering calls, withholding payment).

Best practices:
  1. Prepare fallback terms. You know what you want to get out of it so you know the big terms, but you will need fallback positions for each of those terms. 
  2. Get leverage anyway you can. If the opposing sides pushes back on stuff you don’t care about, don’t let them know. Make them feel that giving up that stupid stuff is a big concession for you, and use it to leverage getting the key stuff you want.
  3. Make negotiations as frictionless as possible. This is key. You can do this by: a) putting a 30-day period on terms (v. six months), and b) avoiding too much back and forth in contracts; move it forward as quickly as possible and get to execution


A BIG COMPANY DEAL 
  1. First meeting will be with the CEO or BD person (or a product person depending on how complex the tech is that you want to showcase). Walk through a demo of your product: a couple of slides on what we are, vision, team. Most importantly, showcase what’s awesome about what you have put together. You need to get them excited.
  2. After the first meeting you should give them a one or two day cool-off period for them to think about it. Then write a follow-up that says something like Thanks for the great meeting. What would you suggest for next steps?  OR suggest some concrete next steps yourself.
  3. Come back in for a second meeting and be patient. You might have to come in three or four times to tell your same story (might even be to the same people).
  4. After your follow-up meeting, ask the big company if they have a general terms of service (TOS) or do they want to use yours. 
                             
               Big Company says: Big companies are going to have a general TOS , which will the partner product 
               comply by the big company’s rules (without much negotiation). In the rare instance that you have your 
               own TOS, when they give it to the big company, they will typically red-line it (i.e. red Xs all over the place, 
               and sent back to you looking a lot like the big company’s original TOS). This process could take 8 weeks, 
               so you might just want to go with what they have.

               Startup says: Although the big companies will red-line it, you can try to give them your own document. 
               Even if it gets changed its better to work off your own document. There is some psychology at play here 
               where the opposing side may feel bad about marking it up too much.

 5.   Decision-making process: typically, it’s the Business Unit owner (on whose site your product will be 
       deployed) who makes the decision – so you’re trying to make the BD person your advocate so they can push 
       the Business Unit Owner to accept the partnership. Remember: original buy-in from the CEO is the best 
       blessing.
 6.   Once negotiation is signed – bet on that momentum and push as fast as you can. Since the BD guy in the big  
       company will move on to the next deal, forget about you, and push it off to the implementers, you should get 
       into direct contact with actual people at your partner’s company who will help you implement the deal as early 
       as possible (i.e. webmaster, the tech/product guy). Go as low as possible to find the implementers (most likely    
       not the managers).

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