Business Development for Startups - Tidal to Wharton IMG group
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Business Development for Startups - Tidal to Wharton IMG group
- 1. Business Development for Startups Whale hunting without getting sunk
- 2. “The most important thing you need to know going into any discussion or interaction with a big company is that you're Captain Ahab, and the big company is Moby Dick. What happened was entirely up to Moby Dick. And Captain Ahab would never be able explain to himself or anyone else why Moby Dick would do whatever it was he'd do.” –Marc Andreessen, The Moby Dick theory of Big Companies
- 3. Intro About Tidal 6-person bootstrapped 2 year old startup that allows big brands to support and engage individuals around their passions. About me • Graduated Wh ’02 (Marketing, Management) • A few years of tech consulting and one failed web startup under my belt (30elm) Advisory Board Bernie Davis Former Director Business Development, Condé Nast John McCarus SVP of Content, Digitas Laurel Touby Founder, Mediabistro John Sheldon SVP, TrueAction
- 4. Why? This is product/market fit- figuring out how to make money/get people to love you. The usual suspects Geoffrey Moore: Crossing the Chasm Steve Blank: Customer Development process Eric Ries: Lean Startups Mark Leslie: Sales Learning Curve (HBR article) Blogs Mark Suster: Sales for Startups Sean Ellis: Lean Startup Marketing Tom Eisenmann: Launching Tech Ventures “it’s important to put in the time upfront to define who your customer/user is and revise it over time” –Nat Turner, Define who your customers are
- 5. Develop a hit list Identify the right industries, companies, people you should be talking to. Make a battle plan. Be sure to talk to a decent number of potential clients - whatever that is for you. Think 50+. Doing deals with large companies ($$$) isn’t proportionally harder than doing deals with small companies (¢¢¢). “50 coffee meetings. It should stick in your head as a metaphor for networking. For starting relationships today that won’t pay off for a year. It’s the entrepreneur’s equivalent of 10,000 hours.” –Mark Suster, Why You Need to Take 50 Coffee Meetings
- 6. Prospect Spend the time prospecting. This part sucks (at least if you’re ADD, like me). Track everything. Notes • Evernote, Simplenote, Notational Velocity ($1 /month) • Google docs/spreadsheet (Free) Research • Linkedin Business ($25 /month) • Jigsaw ($20 /month) • Rapportive (Free) • Wharton Alumni DB (your secret weapon) CRM • Highrise, SugarCRM, a million other options ($5-25 /month) • Salesforce ($10-100+ /month) • CRM switching costs can be high • How “sales oriented” is your company going to be?
- 7. Contact Emails that work • Play up the young, student angle for as long as you can get away with it • Approach that you are trying to learn about the market • Name drop as you can Contact emails/cut & paste blurbs • Google Mail canned response • Toutapp seems cool In-person worth 100x phone • If you HAVE to do phone, screenshare with Join.me or other browser based, but these often suck, people tune out and start look at Buzzfeed “The best way to get money is to ask for advice and the best way to get advice is to ask for money.” –Fred Wilson, VC Cliché of the Week
- 8. Turned into $35k deal with Fortune 100 Referred to someone who became advisory board member
- 9. Meeting What’s your goal? • Get feedback • Get on the radar • If you’re lucky you’re cultivating an internal salesperson What do you have to show? • Demo, walk-through (best) • Graphic mockups, whiteboarding (better) • Vaporware, wireframes, just talking (fine) The art of listening • Will they pay for the new product? • Which features could they live without? “No business plan survives first contact with customers” –Steve Blank, The 5.2 Billion Dollar Mistake
- 10. Follow-up/Materials Follow up email Thank you card Generic pitchdeck (or one-pager) • Stays on file for people to forget about Custom pitchdeck • Converts much better (1/5 vs. 1/10) Deck management stuff is cool (Sliderocket, Clearslide, etc) “Your deck should have 150 words- not per page, per deck. Include custom mockups for every legit prospect.” –Jon Steinberg, Buzzfeed, This Week in Venture Capital
- 11. Staying on radar This is where notes, lists make a difference • Touchbase emails • Deals with others they know • Cool stuff you’re working on • Intros/people they’re meeting • Newsletter (monthly/bi-monthly/quarterly) • Use Mailchimp or such • Blast: Linkedin, your all emailed list, etc, let people unsubscribe as they want • Press • Events (which can just be taking a few people out for drinks) “Constant dripping of water wears away the stone.” –Chinese idiom c/o Mark Birck, Startup Sales Persistence
- 12. Proposal/Contract I combine them sometimes (for easy signoff purposes) • In MS Word with markup so they can pass around to lawyers (lawyers want to feel useful) • Big companies (sometimes) dont mind billing up front • Don’t be afraid of implementation fees • Learn what standard pricing is- you’ll probably underprice yourself 1st contact Meeting Follow- Proposal Contract 1st ups signing Payment Day 1 Day 14 Day 21 Day 30 Day 45 Day 75
- 13. Roadblocks/Tips Bandwidth • People essentially want to help but are busy, it takes time to connect, be persistent, but zen Early These are informational sessions, you’re learning, not selling (unless someone really wants to buy) Small • Use jiujitsu to make it your advantage- startups are cool these days and aren't viewed as risky as they once were • Still have to look friggin cool- hire a designer- you probably can’t design yourself “The world is conspiring to help you- the people around you want you to succeed.” –Rob Brezsny, Pronoia is the Antidote for Paranoia
- 14. Business Development for Startups Whale hunting without getting sunk
Notas del editor
- Hat tip to Marc Andreeson for this famous blog post- if you haven’t read it, do. Maybe I’m an optimist, maybe New York is different, or maybe the companies I’m dealing with are- but I’m finding it’s nearly that opaque. It’s not quick or easy, but it’s not rocket science, make friends, take careful notes, stay on the radar- if you’re doing something smart and interesting that’s useful to big companies they’ll come over time.
- I run a startup called Tidal. We’re about 2 years old, bootstrapped, 6 people now led by myself and my partner, Burak.I did Wharton undergrad, graduated in 02, I was actually working full time while I was here-managed IT for the UPenn Department of Medicine- if you work for the school you go for free. Afterwards I came up to NYC and started working in tech consulting, and was involved in a few startups- you’ll see that’s a recurring trait of entrepreneurs, it’s rarely their first ever business that takes off. For me I had a kitchen design magazine and then a leadgen website that connects homeowners with architects and interior designers. I learned enough tech that I could check out code, do minor stuff, and at least talk intelligently about it.My partner is a deep engineer- he builds control systems for hybrid cars and the like. the predictive statistical inference and descriptive probability algorithms.We have a designer, engineer, community person and some sales assistants.You notice I listed our advisors, they’re a big part of the equation for helping seed the bizdev process, and we found several of them as we were searching for sales leads.• Bernie Davis wasDirector of bizdev at Condé Nast. He helped us pivot into our current company, something that he’s had in the back of his mind since he worked at Screaming Media, a web1.0 company started to “set content free.”I met Bernie at the Shorty Awards two years ago and he brought us in to power an idea he had for Teen Vogue. Having Condé Nast as one of our cornerstone clients opened the doors for all the rest.• John McCarus is SVP of content at Digitas. He helps companies like Kraft, Delta and American Express figure out how they can use content to build stronger connections with their customers. I met him from cold emailing Peter Kemp a Wharton-alum VP at Digitas.• Laurel Touby founded Mediabistro as a networking event which grew into the definitive site for media and publishing online. She knows virtually everyone in the NYC publishing scene.• John Sheldon is SVP of TrueAction, a retail ad agency now owned by Ebay. Another Wharton grad, John is a marketing expert who has held the title of Director of Brand Dialogue at Bartle BogleHegerty and Director of Marketing Strategy at Ogilvy.
- For some reason I have a knack at getting into large companies.I’ll show you a few of the live sites we run to give you a feel.
- Sales,bizdev, is all part of the getting out in front of customers process. There’s a million presentations on product/market fit and customer development. Nat Turner will admit, they didn’t know what they were doing or building at first. Adtech is a convoluted mess: http://www.lumapartners.com/lumascapes/display-ad-tech-lumascape/It’s not just for sales and product development, you’re also building relationships. This will be helpful later as you’re recruiting, writing articles and getting press, raising money, all the stages of your business.The why for me was the fact that the last company I started was highly dependent on fundraising- I wanted to build a company that wasn’t necessarily. That meant b2b and pounding the pavement. Early revenue became a small angel round for us- and enabled us to learn and build from one of our ideal target companies exactly what need we could fill for them.As long as you keep in the back of your mind that you want to create a product- always be thinking of ways to apply what you’re building and learning to many potential clients.
- You can just sketch this out, think of who could be likely. You never can predict who ends up being your clients- go wide. For me that was researching on AdAge, looking through Linkedin and the Wharton DB. What are the major companies? Where are they located?Show sales emailing google doc and big ol’ list of prospects
- I use a combo of tools when I’m prospecting and contacting. I start running down the hit list in my google docs and fleshing it out.For finding people I use Linkedin, then look them up using rapportive and Jigsaw (show Linkedin>Search Kraft>Alumni>Melisa Boyd>Show tag emailed directlyI find the Wharton alumni database to be my secret weapon. You’re spending the money- use it! Emailing Wharton alums makes the email lukewarm and gets me about 30% conversion overall- about twice a cold email. You still can’t just blast willy nilly. This is sniper not shotgun. Be realistic- the CEO of HarperCollins may not email you back but the VP of childrens publishing might. You have to do a bunch of cross research. The database is often outdated, but the people are usually still relevant. Find them on Linkedin, what their doing now, and their current contact info.I don’t move to SalesforceuntilI actually talk to someone. Salesforce is expensive and has a bit of a learning curve. $25 to $100 pp can quickly add up. But depending on how sales-oriented your company will be in the future you may want to go with them. While consulting I often saw the pain of trying to switch CRM systems later on. With Salesforce it can grow as big as you do and all hundred salespeople you hire in the future will generally know how to use it.
- Now when I get to actually emailing I try to play up the young, hungry and learning angle. I’m 33- but I look young so can still get away with it for a while. It is true that I come from completely outside the ad agency world, so it is a learning process for me.I definitely have better response now that we work with some high profile clients. Early on I somehow still made do though. (Show Steve Fanning Linkedin email from July 2009)I just use a canned response in Gmail. You can also use more high tech methods like Toutapp- which allows you to try different templates and track open rates and such. Somehow it never stuck for me though.As you start emailing back and forth
- You’re doing sales but also product research.Right now you should only be the founders, this is early in the curve of your company, and the whole company is product-centric informal roles.Early on, you don’t want to waste time building features that only one client will use (of course, eventually, you may want to do so for your biggest clients).Sometime they love you, want to be an advisor, or have an immediate need to fill. That’s great! You can start brainstorming, digging in, working on proposals.More often you’re just making friends. You want to appear smart, get across what you’re doing, and plant a seed in their minds that will germinate and hopefully blossom into something bigger over time.
- Show them what one of my pitchdecks looks like, flip through generic and custom pitchdeck
- Make them want to help you
- Show how mine looks for each. How insane they are for some companies.I’ve been lucky in that I’ve gotten other sample proposals/contracts from people in our space.Talk about typical legal review.This timeline is pretty aggressive. This maybe happened once with us- for Sony and that was an inbound req from him seeing us on Techcrunch.
- Took me a year to meet all the right people at Time Inc, Intern designers are cheap- $15-30 an hour, and they are a better designer than you.