Developing A Business Development Habit
Do you think about business development as the acts to develop a business or just strategic sales?
This question has been at the heart of a dozen conversations I’ve had with my mentees in the last month.
The agenda for these conversations started out focusing on how to close strategic partnerships or secure investment. Each founder considered closing deals or financing rounds as discrete episodes. And those who had experience closing deals with customers and investors reflected on each event with relief that it was over.
There’s no doubt that protracted negotiations with customers and investors can be tiring and frustrating. I’ve been there many times before. But what occurred to me during these meetups was the homogeneity of the mindset that these founders apply to getting deals done.
And the best analogy I can think of to describe this is a car starting and stopping in traffic vs driving on a freeway.
Start-stop driving requires much higher energy consumption versus more economical freeway driving.
These founders are starting and stopping in traffic.
Each time they need investment or focus on closing a new partnership they start (hopefully close) and stop (move onto the next thing).
This might sound like an efficient way to compartmentalise important tasks, particularly given how much a founder has to focus on each day.
It’s not. It’s a false economy.
How To Think About Business Development
Here is how I think about business development. The mindset I apply to develop a business is more ‘freeway driving’ and less start-stop in traffic and it involves two interconnected philosophies.
First, business development is the act of continuously being in motion on raising capital, developing partnerships, hiring and nurturing influencers.
This means always having your radar on to identify and engage with people who are potential investors, customers, team members and evangelists. And by definition, this also means disconnecting from the belief that funding rounds, sales and recruitment are episodic.
The second philosophy is that business development is about keeping the venture alive long enough to achieve product/market fit. Or in other words, surviving false starts, failed experiments, poor decisions and allowing luck to play its part.
The second philosophy (staying alive) is the motivation for the first philosophy (always be closing).
Investors help inject capital into businesses. Strategic partners help expand reach. Hires help create revenue-generating products. Evangelists help generate influence. And the net result of these combined philosophies is that it makes it easier to keep cash in the bank.
Why Developing Businesses This Way Matters
In no one’s universe is it true that an entrepreneur wakes up one morning with a desire to raise capital and then days later the financing round closes. This is also true of hiring. As much as we would like this to happen, you never find the ideal candidate days after posting a job ad.
It takes time to develop relationships and demonstrate momentum.
This is the experience of every entrepreneur, no matter how urgent we are.
The reason it’s so important to approach business development using the freeway driving approach is that you will come into the lives of prospective investors, customers, team members and advocates at different times.
In some (rare) cases the timing will be right for you to strike a deal, start building a relationship and generate value. For the most part though, timing usually only favours one of the parties. We have all been in the situation where you are ready to sign a new partnership but your prospective partner isn’t ready to engage.
By always being ready to engage, you increase the chances of understanding when prospective investors, customers, team members and advocates are ready to start working together. I think the reality for entrepreneurs that approach business development as just sales or as a stop-start, episodic set of events is that they miss these all-important timing cues.
And timing is everything.
How To Do Business Development
It’s simple. Block out 50 minutes each business day to nail two tasks.
First, invest in searching LinkedIn, Crunchbase and AngeList (and other industry-specific publications) to identify prospective hires, investors, partners and influencers that can help develop your business. List them down or begin engaging with them as soon as possible.
Second, follow up with people you have met who fit this mould. So many opportunities are missed due to a lack of follow-up!
Make this 50 minutes a daily, uninterruptible ritual.
Take a minute to block out this time in your diary.
Soon it will become a game-changing habit like it is for me.
One last thing …
Understanding what business development actually means in the context of startup and shifting the mindset from a stop-start, episodic approach to completing discrete tasks to having your radar continuously open to opportunities accelerates the momentum of ventures.
If a lightbulb has just gone off your mind, block out time in your diary and start a business development habit. If your experience is anything like mine, you won’t regret it.