It goes without saying that as founders of our companies, we are also in charge of business development. We proactively identify and pursue opportunities, and we field inbound inquiries once word of our offering gets around.
The activity of business development is inspiring and seductive, since exploring ideas fuels the engine of our entrepreneurial personalities. It is also, however, both a blessing and a curse: every new possibility is an injection of adrenaline, and that can threaten to distract us from our core business.
My co-founder estimates that, for every 20 business development ideas that come our way, only one will actually evolve into a viable opportunity that aligns with our company's core mission. Fortunately, his is the voice of reason and restraint, while my tendency is to enthusiastically allocate time and resources to fleshing out tempting possibilities.
The sweet spot lies somewhere in between those two approaches, and it's a more complex negotiation than it seems at first. Here are four guidelines to help you navigate the exciting (and distracting) art of business development.
Focusing on your company's core mission is easier said than done, particularly if you're early in the game or your offering is so new that a more-than-average amount of responsiveness to market feedback is required.
It sounds elementary, but I find it useful to keep our core mission visible as I go throughout the day. Print it on an index card and post it at your desk. Take a picture of it and install it as the lock screen on your phone. Set a reminder in your calendar to nudge you once or twice a day. However it works for you, keep your core mission front of mind.
2. Vet fast, then move on.
"Vet fast" is business development's answer to the more general "fail fast." As appealing and seductive as it may be to work with this particular client or to collaborate with that specific partner, it's critical to evaluate (or "vet") the opportunity promptly and objectively.
Then, whether your decision is "stay" or "walk away," take the appropriate action to move on. If you're staying, determine concrete steps right away to move the project forward. If you're walking away, do so considerately but decisively. Avoid getting stuck in opportunities that won't go anywhere.
For us, some business development opportunities with potential partners seemed like a slam dunk; after an hour or two of eye-to-eye conversation, however, we just couldn't imagine working regularly with the personality mix of the other team. Other business development opportunities, after several exchanges and in-person meetings, regrettably petered out, but they inspired additional avenues of exploration that we wouldn't have identified otherwise. In both cases, we couldn't have determined the outcome without putting in the time, IRL, to evaluate the opportunity.
3. Adjust your business plan if necessary.
Regardless of how thoroughly you've researched and prepared your business plan in advance, a young company will inevitably be thrown a few curve balls. A bigger player in the market decides to enter your space, for example, or maybe a key partner hires a new CEO who's less willing than their predecessor to collaborate.
This is when "business development" also seems to include "business deceleration," but this is part of the process, too. Development isn't always about adding on; it's just as often about refining or adapting to an unexpected or modified reality. When this has happened to us -- namely, when a partner's less-collaborative CEO took office -- we needed to pivot our strategy significantly. At first, it seemed catastrophic, but ultimately it amounted to a new orientation built around a more diverse and robust network.
4. Measure risk and reward.
Change is an inherent component of business development. That's a good thing, but it also requires some planning in advance, particularly answering some fundamental questions around the give-and-take of risk and reward.
If you enter into a new collaboration, for example, how much of your previously established intellectual priority will be required to service that relationship? And how will you determine share of revenue moving forward?
One of the most enlightening and productive biz dev meetings we've ever attended involved our potential partner's crystal-clear philosophy to sacrifice immediate financial compensation in lieu of equity that may or may not pay off down the road. They knew it was a risk they were willing to take, and that stance saved both of our companies significant time and resources.