Job titles can be misleading, a product management role at one company is “program management” at another and “product marketing” at yet another. Business development is no different and maybe more confusing. I believe there are three common types of business development and in an early stage company these roles typically are combined and larger companies will have roles that focus on one particular area.
Sales – for whatever reason, some people seem to feel better about themselves with the title “business development” instead of sales. This is ridiculous. Sales is one of the most crucial roles in any business and the profession is filled with incredibly dynamic, intelligent people that play a key role in shaping the success of a company. If you sell a product or a service and carry a quota and more than 50% of your income is based on commission and you are successful, you are able to do something that only a fraction of the working population can do well. It is sales and that is something to take pride in doing and doing well.
Commercial – focuses on a specific deal type like distribution that in turns creates leverage for a company. A classic example are the toolbar deals that Google and Yahoo did years ago (these have since become less common given market saturation) where the economics and deal terms can be complex and require protracted negotiation. Another example is Coinstar’s gift card partners that create an incentive for consumers to dump jars of coins into machines in exchange for a gift card with Amazon, AMC Theaters and Starbucks. These deals help an organization scale product distribution, generate direct or indirect revenue, increase market penetration and other business drivers that do not come from a direct sales team. While not all deals are the same, they will have the same goals and success metrics.
Product – this can range from basic technology licensing to integration or joint development deals and require a solid grasp of the technology on both sides. The ability to work well with engineers and product teams is a must, to be successful one must possess the ability to translate technology into commercial language in an agreement and effectively manage cross functional issues (legal, engineering, marketing etc.). Definitely not a procurement role, this involves things that make the product work, reduce time to market and provide scale. Think of the integration Apple, Google and Samsung have with banks and payment platforms to enable consumers to use their mobile device to pay for things at the checkout. This is an incredibly complex deal to structure that involves engineering efforts, security, intellectual property, marketing and dozens of other factors that need to be carefully thought through and negotiated. I have often suggested to individuals seeking to learn more about BD to read through a few different API agreements from different companies to get an understanding of how to successful companies approach their developer/integration programs.
New /Strategic – this combines many skills and requires diverse experience to work closely with company leadership to assess the overall business and identify new areas of growth and/or ways to transform existing business. Executives, product and engineering teams often have to focus on meeting tight deadlines, customer expectations and struggle to get the necessary external market exposure and synthesize trends and data relevant to the future of the business. The ability to both identify and assess opportunity and help a company take action that leads to something meaningful is a rare, and incredibly valuable skill. I stress execution here too, without it, even brilliant ideas are worthless. As Thomas Edison was famous for saying, “vision without execution is hallucination” and telling people about brilliant ideas without a plan to help get there and a willingness to go above and beyond to help get there probably makes you an asshole.
Hopefully this helps clarify some of what various business development people do – or don’t do in some cases.
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