The business development function is uniquely critical and powerful in a small company.
Business development folks, unlike sales people, should pursue deals that are trans-formative for the company on an individual basis.
Sales, on the hand, pursues deals that are collectively trans-formative – positively if there are a lot of sales and negatively if there are not a lot of sales.
Finding great business development talent is tough and most small companies have to grown their business development talent from former sales people.
That transition from sales to business development isn’t natural as some of the rules are different.
Click here to see the six partnerships to avoid >
Don Rainey is a general partner at Grotech Ventures. This post was originally published on his blog, VC in DC, and is republished here with permission.
Small companies can't help other small companies. There is no large sales force, brand name, marketing resources or development talent that can be leveraged by one company in the favour of the other.
If your business development doesn't involve sales, it better involve actions (by people).
Steer clear of deals that involve co-marketing to each others' prospects where the request is for you to deliver your list to them first or ones that request the two companies to take a set of actions but all of yours are upfront.
There is no value in doing press releases where two companies express undying love for one another.
If you aren't taking specific steps, you're wasting time.
Some companies are simply too bureaucratic to be of much help. If they can't get out of their own way internally, they are unlikely to be of much positive effect as your partner.
Don't do deals with companies that can't move the ball forward.
If they don't have a string of successful deals with smaller companies, you're unlikely to be the first.
Larger companies with reputations for borrowing/stealing 'ideas' or engaging in litigation have earned these reputations. Be respectful of these reputations; there is no amount of legal agreement wrangling that will protect you.
Don't do deals with companies and expect them to behave differently than their history.
Don't do deals with companies that have been accused of purloining ideas on more than a couple of times.
If you don't trust them, you are probably right not to trust them. And, like the heritage point, there is no amount of legal word-smithing that will keep someone from screwing you if that is their intent.
Trust is a basic, instinctual thing. Rely on your implicit abilities of who to trust. Don't do deals with people you can't trust.
But you can do plenty of deals with people you don't really like, as liking and trusting are different. You can grow to like people you don't initially like as you get to know them. In fact, it is quite commonplace.
Growing to trust someone over time that you don't originally trust is rarer. That's because it is harder to trust than like the people you meet in business.
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