I have been asked by many founders and CEOs “we need to hire a BD person, do you know anyone?” Few roles have a more varied job description than business development. It’s no wonder why it is hard to figure out who to hire, what they should do and how to measure success.
Hiring the right person based on the stage of your company may be the single greatest factor in success (or failure) in driving your business.
A person with deep industry knowledge and strong network ready to “do deals” can turn into a disaster if it is too early in a company’s product life-cycle. A product and the team building it go through cycles to establish the product’s identity and a BD person that understands this can be invaluable in shaping an product’s value proposition.
I believe there are three stages in the commercialization process and not everyone is suited for each and every stage.
1) Scouting – the earliest stage of a company, at this point business development is about identifying various routes to market, points of leverage and providing the internal team early market feedback. The ability to work closely with product and engineering teams is key skill. The BD person will spend 60% or more of their time working internally with the team to understand the product, assess the market and begin formulating the first external pitch deck. Closing deals is not a priority, getting market feedback is the primary goal.
2) Testing – once a few paths to market have been identified, it is time to try closing a few deals to test assumptions and provide measurable input before you scale the business. Analytical skills to set up a framework for what to measure and examining the data will determine if and where to scale based on the company’s strengths and vision. Refer to my other post re a framework for assessing opportunities if you need some tips. The time spent internally decreases to 40% to 50% – the feedback loop to product and engineering is critical though so it needs to be a priority.
3) Scaling – after gathering data from early deals and validating a path to achieve your goals, BD is ready to start replicating deals and putting support structure in place. At this point it may make sense to add to the team and finding people who can take a template and scale. The time spent internally has shifted from the Scouting stage and is primarily and now an external facing role. The time internally facing will drop to 20% – 30% and should remain a priority to communicate changes in the market and partner needs.
As a leader in an early stage company, hiring for the right stage is critical so ask questions during the interview process that relate to experience relevant to the stage of your product.
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