Early Stage BD -What Exactly I Do?

Founders/Startups

When people ask me what I do, I often say I help build very early stage Internet/technology companies.  This often leads to the follow-up question – “What exacly does that mean?”  On the flip side,  I meet countless Business Undergrads, and even MBAs, who tell me they want to work in startups, but seem to have very little idea of exactly what the job entails.  I recently came across a great post on 500Startups about what it means to be the “Business Guy at a Startup” by Charles Hudson (@chudson).  It is dead-on (for pre-RevGen stage), so I am sharing just about all of it below:

Being the businessperson at a startup is not easy. While the engineering team is busy checking in code and the product team is busy revising the product plan, you’re out meeting with people. Everyone else, from the finance person to the engineering team has measurable and observable deliverables in terms of code checkins, PRDs, and other key tasks that show up on a weekly progress report, while what you’re doing isn’t easy to measure. You’re not closing deals because you don’t have a product. You’re not generating revenue because the product is still in development. You’re out trying to sell a dream (literally) – some day the startup will live up to all of the promises you’re making to potential partners. So what should you do every day?

I believe there are 4 core activities that every startup business guy should do if you join in the early days:

1. Be an early advocate for a business model and revenue model discovery. Everyone in your organization is going to be focused on building a killer product that users will love. But someone has to worry about the business model and distribution strategy. The good news for you as the business guy at your startup is that you can focus on that issue as a core part of your day. Even if the business model isn’t clear, it’s your job to take advantage of your seat at the table to advocate for potential business models, run early experiments with customers who believe in what you’re doing, and constantly make the case that what you’re doing has to turn into a business if the company is to ultimately be successful. If you don’t agitate for revenue and customer development and discovery, it’s easy to have that work deferred into the future. It’s never too early to start thinking through those issues.

The other natural byproduct of working as a revenue and business model advocate is that it forces you to get more involved in understanding the product roadmap and prioritization of pending features. It’s critical that you find a way to be a part of those conversations early on. Most great Internet startups are driven by product and engineering people who have strong views about where the product should go and which features should be prioritized to achieve that end. If you wait until the product is nearly complete or about to ship, it’s too late; the major opportunities to influence the direction of the product or at least understand why and how key features are being prioritized has been lost. The most frustrating experience many early businesspeople I’ve talked to encounter at startups is a feeling that the product people “just don’t get it” when they come in with a big revenue opportunity, partnership, or deal. You’re right – they probably don’t get it. They’re focused on building the product that they believe customers want. If you haven’t invested the hours it takes to get to understand the product and engineering teams longer term plans, why they want to do what they want to do and when, and to build relationships with them, you’ll never be a part of the process. Spend the time to connect with those teams and work with them – yu can rarely get anything meaningful done if it doesn’t fit into the company’s longer term product plans and vision.

2. Be the one man or one woman combination of sales, business development, and marketing. In the early days of any startup, you’re probably going to be the only person responsible for the “business stuff.” You’re not going to have business counterparts in other key business functions such as marketing and sales. If you’re nominally the VP of Business Development, that’s not actually your job. Your job is to drive all of the business functions to the best of your abilities. Someday you might have a counterpart in sales, marketing, or other key business functions. But until you do, it’s your responsibility to drive those functions forward to the best of your ability and help the company better execute across all business functions, even though you’re only one person.

For those of you coming from big companies, this can be a jarring transformation. I know it was from me. For my first full-time business development role, I went from Google (15,000 employees when I left) to Gaia (about 65 employees at the time I joined). The nice thing about larger companies is that you can afford to staff all of those other business functions – if you’re in business development, it’s not your job to run marketing. And let’s not overlook one critical difference between being at a big company such as Google, Yahoo, or Microsoft. When you call, people will pick up the phone because of the company you represent. Getting meetings is relatively easy. Getting small and large partners to line up behind your new product or vision can be easy when you have the power of a big brand behind you. That is rarely the case at a startup – you have to make it happen and it will take a lot of hustle to do so.

3. Start building relationships that will pay off when your company starts to scale. Similar to the points raised in the first point, there are key relationships you want to start building early, even before it’s entirely clear how the product will turn out. In every early stage business, the management team knows the initial market you’re planning to target. And in every market, there are key other ecosystem participants you want to get to know for distribution relationships, corporate development opportunities, or for other reasons that will help both of your businesses. It’s never too early to start those conversations. The best part of starting those conversations early is that you get an opportunity to better understand how other people in your ecosystem are thinking about the problem you’re trying to solve. Do they have internal efforts already underway? Are they desperate to partner with someone else who has traction? Do they have strongly held beliefs about how the space you’re in is going to play out? These are all things that are good to know as you plot your strategy. And as the person who is focused on life outside of the four walls of your company, this is valuable intel you can bring back to everyone else in the company.

4. Keep your ears open about the chatter in your industry so you don’t get blindsided. Don’t forget that the vast majority of your colleagues are focused on the internal issues that could keep your startup from succeeding. They’re working on product planning and customer development issues that are unique to the product your company is building. But that’s not 100% of what you need to know to succeed. Sometimes it’s really important to know what’s happening in your industry. Is one of your competitors raising a major round? If so, what does that mean for your company? Will that major round allow them to out-spend your on sales and marketing or hire more engineers? Is there a big deal out for bid that doesn’t involve you? If so, what would it mean for the space if one of your competitors closes that deal? Is there a big public company actively looking to acquire someone in your space? These questions and 500 others are important to know if you’re running a startup. Those things can impact your startup’s perceived chances of success. As the business person at a startup, it’s your job to stay on top of industry chatter to make sure your startup isn’t left out in the cold if changes are afoot in your industry.

Last but not least, you need to get comfortable with the fact that many of the activities you’re doing won’t show up in a weekly progress report. Building relationships, pushing for revenue models, and staying up to speed on what’s happening in your industry might not pay immediate dividends in the same way that code checkins and PRD revisions do. But nothing hurts startup morale more than being blindsided by a major industry development that you hear about on TechCrunch without being part of the conversation.

You can read the entire post here:  http://blog.500startups.com/2010/11/08/what-does-that-business-guy-at-your-startup-do-anyway/

Puppies and Startups

Founders/Startups Personal Development

Three months ago I entered into what is one of the biggest adventures I have ever undertaken.  I rescued a puppy.  I had been toying with idea of getting a dog for about 5 years (yes, 5 years).  Two things held me back: my startup life and New York City.  But I now live in sunny Santa Monica in a bungalow with a spacious yard.  Even so, it still took me two years, as my startup hours remained an obstacle.  Then, a friend posted a photo of a puppy she was fostering on Facebook and I fell in love.  I am now the proud mother of a Pit / Black Lab pup named Joanie (after Joan Jett, of course).

I have been working on balance (as just about every entrepreneur will tell you) since – well…..birth.  And rescuing a month-old, wildly energetic puppy provided me with an instantaneous, and sometimes overwhelming, priority outside of work.  Luckily, I have been in consulting mode as of late and have had more flexibility with regards to spending time with my pup. (I am starting a new gig very soon so stay tuned as this adventure evolves!).

To date, my life with Joanie has very much felt like a TV sitcom – chasing her down after she jumps out of the tub and spreads bubbles all over my house, stumbling over myself as she charges down the beach, sporting bite marks on my arms and bite holes in my clothes,  etc .  But it is all worth it, as I have a new best friend and we have tons of fun.

Recently, I have been thinking a lot about how raising this puppy is very similar, in many ways, to my experiences launching Internet businesses.

1)      It is exhilarating and exhausting all at once
2)      It requires dealing with all kinds of shit – and lots of it!
3)      Every day (hour, minute, second) brings something new
4)      It is anybody’s guess exactly how big it will be
5)      Some days the growth and progress are tremendous, others not so much
6)      It requires a great deal of stamina and patience
7)      Success in training has more to do with the owner than the dog / success in startups has more to do with the team than the idea
8)      It can be more rewarding than you ever imagined

Of course, companies don’t eagerly await for you to get home, look at you with adorable puppy eyes, or want to lick/kiss your face off.  If you don’t have one and want one, go for it.  There are way too many dogs out there that need great homes.  Check out People For Paws for assistance.

5 Educational AND Entertaining Business Books to Read NOW

Founders/Startups Personal Development

I love to read.  And I almost exlusively read business books.  My favorites are both educational and entertaining.   Yes, business books can be entertaining – and even exciting.   For me, these are the ones that tell true accounts of the failures and successes of entrepreneurs/startups, and provide gems of wisdom, and lots of humor, along the way.   Below is a list of 5 of my 2010 favorites.  They make for great Holiday reading as well as great Holiday gifts.

1) Stealing Myspace – the myspace story is one of countless twists, turns, villains, and saviors.  Not only does it include a Who’s Who in today’s Internet space (Richard Rosenblatt of soon-to-go public Demand Media, Ross Levinsohn who was literally just hired last week to take control of  Yahoo!  Americas, and countless others), it also includes Sumner Redstone and Rupert Murdoch.   It reads like a great fiction book, but is an accurate account – which makes it all the more entertaining.

2) CRUSH IT – if you don’t know who Gary Vaynerchuk (“Gary Vee of WineLibraryTV”) is by now, get with the program.  This guy has more passion and energy when it comes to business development than I do – I am a HUGE fan!   The book is a quick read and a must read.  Its all about hustling and the best ways to leverage social media to build your personal brand and “cash in on your passion”.   Here are Gary’s 3 Secrets to Success – which I LOVE:

        Love Your Family
        Work Superhard
        Live Your Passion

Be entertained and educated by Gary daily by reading his blog www.garyvaynerchuk.com  and following him on Twitter @garyvee.

3)  The Accidental Billionaires – you have most likely seen (and loved!) The Social Network. This book is just as good, if not better. It is a tale of sex, money, genius and betrayal, and also a tale of how one of today’s most prominent and dominant Social Networking/Internet companies came to be.

4)  Delivering Happiness – this is a book by an amazing entrepreneur and human, Tony Hsieh.  I had the privilege of listening to him speak at last month’s PerfectBusiness Summit 2010.  DH is an important book, as it is as much about passion and purpose as it is about profits.  It tells the story of Zappos and provides great insight into the importance of company culture in building a brand and growing a company.  It also includes thoughts on tribal theory, happiness, and what one can learn about business by playing Poker.

Keep up with Tony by following @zappos on twitter.

5)  Do More Faster – this book was put together by David Cohen and Brad Feld of Techstars.  They, as I, believe that mentoring and community are key factors in flourishing entrepreneurial ventures.  There is no better way to avoid the many pitfalls of launching a business then learning from those who have gone before.  This book is filled with 1-2 page chapters by Techstars Mentors and Mentees and is chockfull of great insights.  I read this book in 2 days and bet you will too.

I have learned a great deal by reading Brad’s blog site Feld Thoughts . You should definitely check it out as well as follow him on Twitter @bfeld

Happy reading!  Please share your must-reads with me via the Comment Box.