Business Model Generation is the book I refer to as “The Entrepreneur’s Bible”. I have one at home and one at work. If you don’t have this book, buy it HERE NOW. Along with a terrific Website, the brilliant BMG folks have recently released a new “toolbox” called The Strategyzer that helps you build a better business model. Check it out HERE. Trust me, you will thank me later for this tip;)
Last Thursday, I led a workshop on BD for Startups at Coloft as part of their new Coloft Academy initiative. I have spent my career launching and growing businesses, so I was thrilled to be invited to share my learnings with the community. I had a terrific time and would like to thank all the folks who packed the house to spend 2 hours with me. I have always loved mentoring young entrepreneurs, and have considered teaching in a more formal way at some point. I now know that it is something I absolutely want to tackle!
I have received a great deal of positive feedback on the workshop, and lots of requests for my presentation. Here it is:
I love talking about startups, and I really love talking about all things Business Development.
I am super honored and excited that LA’s Startup Hub, Co-Loft, has invited me to lead a workshop called “Startup BizDev – This is How It’s Done” as part of their new Academy program. Below is an overview of my August 23rd Workshop:
Are you a Founder and want to earn more about growing your venture via partnerships and alliances? Or are you interested in a job in Business Development at a Tech or Internet company?
We will kick off this session distilling what Business Development actually means at an early stage company, and then we will discuss what it entails as the company grows. We’ll also discuss types of partnerships, as well as provide a framework for evaluating them.
Later, we’ll outline characteristics of a great Business Developer – who you should hire or the skills you need to get hired.
We will conclude the class with a Q&A session.
- What are considered Business Development functions at the various stages of a startup
- Building and growing your company’s ecosystem
- Types of partnerships
- Types of deal structures
- Tips for closing
- How to evaluate partnerships when resources are limited
- Potential pitfalls leading to unsuccessful partnerships
I HOPE TO SEE YOU THERE!
I, like most folks, was thrilled to learn that Marissa Mayer was chosen to be the next CEO of Yahoo! And they chose her knowing she is pregnant. Go Yahoo! Mayer, only 37, is the youngest CEO in the Fortune 500. Go Marissa!
If anyone can bring Yahoo! back to prominence, it is Marissa Mayer. She is not only muy inteligente (she is an engineer who holds patents in Artificial Intelligence), she is young, hip, fashionable and feminine . The second half of that sentence may seem silly to point out, and even irrelevant, but it is absolutely NOT. It is relevant to both the “what to do with Yahoo!” conversation and the “how do we get more women into technology” discussion.
Let’s start with what to do with Yahoo!
Yahoo! has had 5 CEOs in 5 years. Holy crap,!! For years, it has been a company in turmoil, struggling with loss of talent and slowed growth. BUT, on any given day, Yahoo! has upwards of 20 million article views and, in any give month, 700 million people visit the site. Though it will be a mighty challenge, the opportunity to reboot Yahoo! is HUGE. So what should the company do? I think the answer is to focus on WOMEN. A nd who better to lead that charge than a pioneering woman in tech like Marissa Mayer? I had some thoughts about this, and then I came across a spot-on post, titled “Pink is the New Purple“, by Dave McClure. Here are some highlights from his post:
“…. what if Marissa used Yahoo as a bully pulpit, to address the needs of a market that is roughly 50% or more of the global internet population? What if Yahoo began acquiring or partnering with properties specifically relevant to women, like Pinterest, ShoeDazzle, Gilt Groupe, BabyCenter, EcoMom, Oprah, ……Martha Stewart (or BritMorin.com),……?”
FashionTech / Fashion 2.0 / Social Commerce (whatever you want to call it) is crushing it right now. There are tons of new online businesses aimed at girls/women/mothers that are generating a tremendous amount of traffic, revenue and profit. And if they were not founded by women, they tend to have lots of female employees. As a whipsmart businesswoman, a self-proclaimed online shop-aholic, and a mommy-to-be, I know Marissa has gotta be all over this. She has, in fact, angel invested in several of these companies, including OneKingsLane and Brit Media. Mayer is the leading “Woman on the Web” right now, and she has a kickass opportunity to partner with kickass businesses for women (that are often by women) and turn Yahoo! into the leading destination for “Women on the Web.”
Now let’s hop from the impact Marissa could have by focusing Yahoo! on women, and discuss the impact she is already having on helping to attract women to the tech industry.
Hardly a day goes by that I don’t come across an article that discusses the lack of women in technology. Marissa was already a stand-out role model for this cause. Now, as the youngest CEO in the Fortune 500, she is even more prominent. And she is definitely not shy about using her status as a platform for encouraging young women to get into technology. Below is one of numerous quotes from Marissa on this topic.
Marissa Mayer is a hip and fashionable female that young women can relate to. With women now making up over 50% of undergraduates, lots of young girls will now look at Marissa and her accomplishments, and be more inclined to study math, science, and programming in pursuit of a powerhouse career in tech.
Hopefully Marissa is reading this (ahahahaha!), or, more likely, Dave McClure’s blog. Ms. Mayer – you are the right woman, at the right time, and the right place to have a powerful impact on women (students, consumers, employees, founders) all over this world. C’mon sista, you got this! Us women are watching you eagerly!
Last Tuesday I started a new gig at yet another early-stage company. The company is called BetterWorks, and we are located on 3rd Street Promenade (very close to where I live – this is always ideal when living the “startup” life). I did not, of course, take on this new adventure solely due to location. I was an immediate fan of the idea and business model, but was truly sold upon meeting with the founders. After all, building a successful company is not about the idea, it is about the execution. And the three founder of Betterworks have a long history of “crushing it.” BW was founded by three serial entrepreneurs: Paige Craig – founder of The Lincoln Group and LA’s most prolific Angel Investor, Zao Yang – inventor of Farmville (sold to Zynga), and George Ishii -co- founder at Yammer and Geni.com.
The below is a ThisWeekInStartups clip of my former Docstoc CEO, Jason Nazar, talking with my current bossman, Paige Craig, about investment themes, startups, and Paige’s military background. Watch, listen and learn as this is a good one!
You are probably wondering what we do at this point. I can’t share that yet, but look forward to posting more about our offering and our progress soon. For now, you can learn some info by checking out www.betterworks.com and following our blog.
BW is moving faster than any startup I have either worked at or with. Pretty exhilarating! I have been moving at lightspeed since the second I walked in the door and I am loving every minute of it. Speed is key in building a successful company, particularly in the tech space. In fact, it is a part of the 8 key drivers of the BW culture (TIP: if you do not have the defining points of your culture written down and shared with your employees, do so now! And while you’re at it read Delivering Happiness by Zappos’ CEO).
One last share- for those that think the early startup life is glamorous, check out the below photo. That is our office – 4 people in 100 sq ft. room with cardboard tables and empty computer boxes for desks. Nothing like a little sacrifice to make the reward of building a kickass company that much sweeter.
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/