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The 5 Things You Need to Know About Startup Business Development

Success of any early stage startup relies to a large degree on the ability to acquire customers and generate revenue from these customers. The ultimate key to this is a solid business development strategy.

All too often, founding teams lack the background and/or confidence in business development. To make matters worse, there is an attitude that permeates the startup community of disregard for sales and which places a disproportionate value on product development and fundraising. The ultimate effect of these compounding factors is that business development becomes an after thought. The crazy truth is that if focus were placed on business development from the start many an early stage startup’s funding woes would be less relevant either because they would have relevant cash flow from viable sales contracts or they wouldn’t face the ever present traction objection from investors.

Unlike more established businesses, there are some inherent quirks about business development as it relates to startups, specifically in the earliest of stages, which for purposes of this discussion I will define as prior to a Series A funding round. business-idea-1240830_1920Regardless of your background or beliefs about business development, I’m here to share with you a few key things about startup business development for early stage startups that can make all the difference between success and failure.

  1. When it comes to startups, sales and business development should be thought of as one and the same.

When a startup is in it’s early stages, there is really no distinction between sales and business development. The reason for this is that there is no tried and true sales process that is established and repeatable. The company is still figuring out what the target market is for the product and even shaping the product accordingly.

In the words of Seth Godin, “The thing that makes business development fascinating is that the best deals have never been done beforeThere’s no template, no cookie cutter grind it out approach to making it work.”

If you are curious about more of Seth’s thoughts on business development make sure you check out his post here.

Everything a startup does in its early stages as it relates to sales is a function of business development. It is all exploration and discovery and development of what will ultimately become a repeatable and scalable sales process. Hopefully, that is good news for you if you are like the vast majority of people that have a negative association with the idea of sales.

2. Your business development strategy and execution should start from day 1.

Just like you wouldn’t start making a cake without knowing you have all the ingredients at home to make it, you can’t create a product or service without insights and knowledge from your prospective customers. It isn’t that you can’t build a product this way, but the truth is, if you did, there would be no guarantee at the end of the process that anyone would want what you had built.

When you are at the earliest stage of your business, you need to be thinking from a business development mindset. Who has the potential to be your customer? Who could potentially be a strategic partner? When you are actively thinking about these things you can then take it a step farther and begin interacting with these potential customers and partners. Don’t make the mistake of thinking you need a product to do this. What you need is an open mind and a desire to think outside of the box to see problems and needs within what will ultimately become your target market.

3. Hiring a sales rock star is a mistake.

guitarist-248036_1280As a founder, you are the person that needs to be out there interacting with customers and partners. Nobody is going to know your business as well as you do, not to mention the fact that no one is going to have the same passion and fire in his or her belly to make your company a success. In the earliest stages of your business, you need to be out there interacting in order to gain the insights and perspectives relevant to shaping your product or service in a way that ultimately leads to success. Mark Suster puts this and more exceptionally well in his blog post, Startup Sales – Why Hiring Seasoned Sales Reps May Not Work.

A key quote from Mark’s post, “The problem is that in an early stage business there probably isn’t a perfect fit between your early product and a customer’s needs. You learn that by showing them your product, watching their reactions, asking them questions about what they’d like to see improved and then racing back to the office to talk with the team about what you’ve learned and how you can incorporate it into your product plans.”

There will come a time when hiring a sales rock star will indeed make sense. But that is down the road quite a bit. It is when you have an identified target market with a product that fits a clear customer pain point and you yourself have perfected a sales process.

4. Cold calling is effective when approached right.

Don’t allow fear or the misperception that cold calling doesn’t get you anywhere stop you from what can be one of the most effective business development strategies. Cold calling is extremely effective when done right. It leads to connections with people that ultimately become customers or whom lead you to others who ultimately become customers.

You need to take the time and effort to reach out in an informed and positive way. Make sure you are reaching out to someone who ultimately you can add value to in some way. Don’t think of cold calling as a one sided street in which you are trying to get something from the person you are attempting to access. Rather, think of it as a connection that is mutual in which you are building a relationship. If you approach cold calling with this mindset, the outcome is sure to be positive because it isn’t all about you and your needs. It is about the collective benefit of forming the connection.

Check out Seven Secrets of Cold Calling Success from Entrepreneur Magazine for some more great tips.

5. Pricing is more art then science.

Pricing is never easy whether it is for an established business or for an early stage startup. The unique challenge faced as a startup is you may find yourself with a customer ready to buy before you have thoroughly researched and defined pricing as it relates to your market. With that in mind, the biggest tip is to be flexible. Realize that you aren’t going to have all the answers from day one and that is okay. It is possible that the pricing strategy you start out with will change down the road. What is most important with that in mind is to make sure that you truly develop solid relationships with your customers. If you are communicating with them and they know who you are and the stage you are at, you will be able to establish enough flexibility in your relationship that you can renegotiate pricing down the road if that become necessary.

In the meanwhile, it is a good idea to be proactively thinking about pricing as a part of your business development strategy. This article, How to Price Your Products, from Inc. has a variety of valuable points for you to consider.

I hope that you’ve found this post helpful. If you have your own business development tips for early stage startups, please do take a moment to share them by making a comment. I truly believe business development is an area not covered often enough for startups and which can make a meaningful difference in the success of startup founders.

 

 

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Startup Mom Success – 4 Tips

I remember thinking, can this work? Can I be a startup co-founder and simultaneously a mom? Can these two roles co-exist or will I ultimately be a failure at both if I take this on?

I know the startup life well having been in one early in my career as a young, single woman. I spent hours on the road, at my home office computer, on planes visiting clients and internationally traveling at conferences. This included long days and nights working hard and networking in environments ranging from coffee shops to bars. At the time, it all was part of the phase of life I was in. I didn’t have much of a personal life I remember but all in all, I didn’t care. It was a tradeoff I was making in my mind. I wanted to make my mark professionally and for that I was willing to make many sacrifices including but not limited to personal time with family and friends.

Knowing what it took for me to succeed the first time, I believed that a large component of that was the immense amount of time I put into it. How would I do that and still be the loving, caring and ever present mom that I strive to be?

The truth is, I got over my fear and I jumped in head first into my dual role of startup co-founder and mom. Knowing there are other people out there that are potentially facing this same type of decision, I thought it might help to share with you some tips that I believe have led to my success in embracing these dichotomous roles.

1. Plan, plan, plan

The reason I include three plans is because that is what it takes. You need a plan for your family, a plan for your startup and a plan for yourself.

This means sitting down and proactively thinking of what your short term and long term goals are in each of these three areas. I highly suggest taking the time to not only think about this, but then to make it tangible by creating a visual representation of it that you can keep available for you to look at and reflect on weekly. I personal like to create dream/vision boards but it doesn’t have to be that formal and you can really just have a working document that resides on your computer. But, print out whatever it is. Having it in front of you makes a significant difference in terms of you consciously thinking about and incorporating these goals into your daily life.

Also, I want to bring a focus on the family part of your plan. I think it is relatively easy for all of us to professionally set goals, but setting goals for your family is equally if not more important because it isn’t as easy and can be less tangible. I’ll give you an example, perhaps a goal you might have is that each week as a family you have a new family experience together. This could be in the form of a trip or making a new meal together, etc. My point here is, take the time to reflect on what will make your family grow and progress, the same way you think about this for your business.

2. Focus on Quality of Time

This applies to family, startup and yourself. It is easy to slide into habits where time isn’t used in meaningful ways. I’d specifically suggest reflecting on this in terms of personal. If you are going to take time for yourself, make it matter by tying it back to the long and short term goals that are part of your plan. If you revisit time in the context of your goals, you will find that you use your time in quality ways.

3. Be Flexible

This applies in so many different ways. For me, something I’ve had to become accustomed to is that there are times that things happen with your children and meetings have to be rescheduled.

Maybe it is a sign of age, but I think the thing to know is, there is always tomorrow. All too often, we put ourselves under unnecessary time pressures. I’m not suggesting that you start ignoring deadlines, but just keep in mind that tomorrow is another day and if something personally needs to be attended to, the world will not end and you will not lose out to your competitor due to having to reschedule. Actually though, if you do, maybe that wasn’t the right client for you to take on.

Each and everyone of us is an individual who faces unique challenges, be human and allow yourself to accept that life happens.

4. Simplify Life with Technology Tools

There are so many resources out there that save you time and simplify the challenges of daily life. My suggestion to you is use them. Examples are, auto-delivery services for household items like the Honest Company to grocery delivery. The reality is running a home is a full-time job just like running a business is. So having two full time jobs something has gotta give. So unless you are independently wealthy, something most startup founders are not, then you need to find effective ways to keep your household running without breaking the bank. In my opinion, technology fortunately makes this possible.

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Is it Time to Start?

I’ve spent the last two years of my life working on FABRIQ, a startup that I founded with my husband. There have been so many experiences that I never would have had if we didn’t “start.”

So many people don’t start things because there is a fear of the unknown or of failure. I’m here to tell you that this framing just doesn’t make sense. Just the act of starting is an accomplishment. It is a decision to do something and to truly try. Whether or not that leads to an exit or Unicorn success story, it is the journey and all the things along the way that are learned that truly matter.

When we first began our startup journey, I had a picture of success in my mind. That picture involved becoming a venture capital backed business and taking it to a successful exit. For a variety of reasons in the last few months, it has become very apparent to me that is not the journey that I am on. And that is where I find myself here, writing to you and sharing a sliver of my personal startup story.

As a founder, it is so easy to wrap your identity up with your business.  When that comes to a close for whatever reason, you are left grappling with who you really are.

So again I find myself facing the pivotal question, is now the time to start? In this case, I’m referring to my blog and along with that a renewed focus on my personal, professional aspirations.

Starting anything is a critical decision point and something that some people embrace more than others. Are you a person who “starts?” And what exactly does that mean?

I know for sure that as I continue to write here I will explore other aspects of my startup journey. More than anything, I’m going back to my core. I’m looking at who I am outside of my startup. This personal reflection, as well as reflection on lessons learned on my startup journey, I hope will prove helpful to others.

So, I have decided once again to “start.” My question to you is what are you contemplating and perhaps haven’t pulled the trigger on? What is holding you back? Is it time for you to start?

I really hope that you will share your thoughts with me as I would love for this blog to become alive with true interaction and meaningful discourse.

Ciao for now!