Who You Gonna Call? Navigating the Existential Crisis // John O'Farrell. This series of posts starts off with a short quiz for the startup CEO: Q: Who’s responsible for developing your product? A: That’s easy—Engineering! Q: Who in your company is responsible for selling your product? A: That’s easy, too—Sales! Q: Who in your company has primary responsibility for:Mapping and networking your ecosystem? Building long-term relationships and driving deals with strategic partners? Identifying, evaluating and executing acquisitions? Seizing the transformational opportunity Given the all-consuming nature of a startup, it’s natural to be focused on your own company first, then on customers and competitors. Over the lifetime of any company, there is a handful of potential deals that could dramatically transform the outcome: Although every company theoretically has access to transformational opportunities, few actually manage to identify them, let alone seize them.
It’s not Sales Strategic BD in action – Loudcloud/Opsware Example 1: Tackling the existential crisis[1] Who You Gonna Call? Strategic M&A // John O'Farrell. In part I, I talked about how up-front investment in a high-caliber strategic business development function helped to save Loudcloud when an existential crisis hit in 2002. But the value of strategic business development didn’t end there. In fact, it was only beginning. Opsware V1: Single product, single customer The EDS transaction closed in mid-August, and we started into the fourth quarter of 2002 in much better shape than we’d entered the first quarter. That said, we still had plenty of challenges. We were a single-customer, single-product company. Of course, we had 60 great engineers and plenty of cash, and they lost no time starting the work needed to make the software easier for our small but talented sales team to sell.
Kicking off the M&A strategy Working closely with the product and sales teams to understand needs and build consensus, we started identifying and prioritizing categories adjacent to our core server automation category and tracking the key players in each. Who You Gonna Call? Partnering with Goliath: A Tale of Two Announcements // John O'Farrell. SUNNYVALE, Calif., June 2, 2003HP and Opsware Inc. Join Forces to Deliver Enhanced Automation for HP’s Utility Data Center SUNNYVALE, Calif., Feb. 13, 2006Opsware Announces Worldwide Distribution Agreement with Cisco These two headlines sound pretty similar—“Small company partners with giant company to reach a bigger market”—but they led to two very different outcomes. Our 2003 deal with HP didn’t generate a single dollar in revenue, whereas our 2006 agreement with Cisco drove tens of millions of dollars in sales and helped to make Opsware the uncatchable leader in data center software.
Why did one succeed spectacularly while the other never took off? As a startup with the best product, your challenge is often getting it in front of enough customers and getting them to buy. In theory, striking a deal to have an HP or an EMC or a Vodafone sell your product to their customers is the way to cover the market and exponentially increase sales velocity. Time to find a partner The right partner. Guest Post: Startup Business Development 101. Holger Luedorf has been doing business development in the web/tech/mobile sectors for almost 15 years. He currently leads Business Development (BD) for our portfolio company foursquare.
Holger has contributed a guest post with a bunch of great advice for startups that are just getting around to BD and what they should do and what they should not do. His views and opinions are his own and not those of foursquare. The Beginner’s Guide to Start-up BD: 15 Basic Rules A lot of the rules below will seem like no-brainers to any seasoned business development manager, but I think it is worth putting them together in one list. Create clear BD targets – This goes without saying, but it is worth repeating. Don’t Cede Control: Why You Need to Cut out Middle Men in Negotiations. Middle Men. Middle People? They exist in all forms of work and life. They’re essential in helping us get our jobs done because they specialize in something we do not. They do a routine task over-and-over again all year long that we do only periodically. Lawyers. Recruiters. We need them all. Let me start with an example. “That’s nuts!” “Because he told me that he wants the move in date to be X.”
I said, “If I start with your position I have nowhere to go but down. She way annoyed. If you’ve never read Freakonomics you need to. I think for most of us this is intuitive. I started with a personal example because I’d like you to have that mindset as we discuss the business people in your lives. On the property in question, I had to wait an extra 4 weeks where I might have lost the place. 1. Executive recruiters are great at sourcing candidates. They’re also good at screening candidates. So you finally get down to your short list of final 2 candidates. You can’t outsource this to a recruiter. Growth Hacker is the new VP Marketing. The rise of the Growth Hacker The new job title of “Growth Hacker” is integrating itself into Silicon Valley’s culture, emphasizing that coding and technical chops are now an essential part of being a great marketer. Growth hackers are a hybrid of marketer and coder, one who looks at the traditional question of “How do I get customers for my product?”
And answers with A/B tests, landing pages, viral factor, email deliverability, and Open Graph. On top of this, they layer the discipline of direct3 marketing, with its emphasis on quantitative measurement, scenario modeling via spreadsheets, and a lot of database queries. If a startup is pre-product/market fit, growth hackers can make sure virality is embedded at the core of a product.
After product/market fit, they can help run up the score on what’s already working. This isn’t just a single role – the entire marketing team is being disrupted. Airbnb, a case studyLet’s use case of Airbnb to illustrate this mindset. Looks simple, right? Traction Verticals. A Spreadsheet Model for Viral Growth — Mark de Visser. When you are working to build your personal brand, it is important that you contribute relevant and timely information about your topic of interest.
I assume you have chosen a topic to which you can add value based on your passion, skill and passion. But a large part of your ability to be relevant and timely comes from the hard work you put in research, writing and distribution/promotion of your content. And if you are like most of us, you have only limited time to dedicate to your branding work, so being efficient and finding the right tools will determine whether your efforts succeed or not. There are great tools to help you save time and make it easier to get your brand out. The first step of your daily routine should be to get an update on the news in your market segment. Let's turn off television's morning news, you waste at least 40% of your time on commercials, and the rest is so general and void of content as to be useless.The newspaper is not that great also. Add Star. Sell-Side vs. Buy-Side BizDev: Hunters vs. Evaluators … - Shaival Shah's Blog. - This is going to be BIG! - Business Development for Early Stage Startups.
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. The Standard Deal The “standard deal” is minimum viable product for business development. The Pipeline. Cannibalize Business Development by Popularizing your API - Shaival Shah's Blog. The great fad of the last several years is self-serve and the ability to scale the distribution and access to your technology, product, service or data.
The Twitter API, Facebook Connect, Yelp API for reviews, Youtube Embed codes, Google Maps API, you name it. And everyone knows the APIs out of the media darling’s Foursquare, Zoho and Dropbox. But, how about little known web services that may have great functionality that you have likely never heard of like Mombo’s Social Movie Review API, Email Yak’s web-based email API, Guitar Cord’s music utility service API, YoLink’s semantic search API and literally thousands of others that have great products, but are rather unknown. Business Development 2.0 isn’t a new concept. Hunch’s Co-Founder, Caterina Fake, talked about Qoop building off of Flickr’s API back in August 2006, while Fred Wilson blogged about how pervasive APIs, embeds, widgets, search and RSS feeds would become to quickly get distribution or access to services.
Shopify’s “Agile Business Development” Explained – with Harley Finkelstein. Shopify uses a method called “Agile Business Development,” so I invited Harley Finkelstein, the company’s Chief Platform Officer, to teach it. As you’ll hear in the first example of the interview, this method can turn even a potentially contentious legal disput into a partnership that leads to growth.
Shopify is a platform that enables people to create online stores that look beautiful and increase sales. Andrew: Three messages before we get started. First are you a user of 37signals web apps? Then you’ll want to know about SignalKit.com, it expands the utility of all those business tools you’re already using. Next, after he sponsored hundreds of Mixergy interviews, if I ask you, “Who is Scott Edward Walker,” what would you say? Finally, if you need a phone number that gives you unlimited extensions, who do you turn to? Here’s your program. Hi everyone. Harley, welcome to Mixergy. Harley: Thanks, Andrew. Andrew: Well, thank you. Andrew: Okay. Harley: Yeah, absolutely. Andrew: Okay. What Now: Deal or No Deal? // Peter Levine. In addition to the Freemium + upsell model that SpiderNet has implemented, you have also decided to pursue a strategic partnering/OEM model. You’ve brought on a world-class Business Development executive with the objective of getting major ecosystem players to adopt your free, base software into their distribution and enable them to upsell above that base.
The model will enable additional deployments of your free software, providing additional opportunity to monetize the user base. The new BD executive has been active for several months, targeting large players with massive distribution capabilities and $100+ billion market caps. A deal with any one of the “elephants” would be a game changer for SpiderNet.
Recently, one of the “elephants” finishes their evaluation of the SpiderNet product and wants to do a deal. After several rounds of negotiation, the terms they offer are: What Now? The Box Car Acquisition 50/50 revenue split. . $5 million up-front. Five-year contract length. Summary.