GroupMe recently partnered with Balanced to power all the financial plumbing for our new Split feature. Building that partnership and working out the nitty gritty of that contract was a long and trying process. More than once we came to an impasse that looked like a deal-breaker; on one occasion I did in fact walk away.
Obviously, we ultimately got the deal done. Both because of, and to some degree, in spite of, what an extended and arduous negotiation it was, Jareau (Balanced’s co-founder) and I became friends. That’s been not only a personal boon, but a professional one as well.
During the negotiation, it was tremendously useful to have a good rapport with Jareau, especially when GroupMe’s Microsoft lawyers needed to play hard ball to protect our interests. I could let them take that tougher stance and then back channel with Jareau to find the middle ground. He was able to do the same from Balanced’s perspective.
After the partnership went live, we’ve switched from negotiating mode to account management. Having a good enough relationship to be comfortable calling each other, regardless of the hour, has been really critical to dealing with some issues that have come up since launch. Nothing crazy, but important deviations from the plan that needed to be addressed on both sides. We’ve been able to deal with these few situations quickly, honestly, and efficiently because we have a mutual respect and admiration for one another. Would things have been resolved if we had a strictly professional relationship? Probably. But it would have taken longer and been less pleasant. And probably conducted entirely over email.
You won’t become friends with everyone with whom you try to do a deal. But you should try. It makes things so much easier, regardless of whether a deal gets executed or not. BD is about building relationships, but it’s far more fun, rewarding, and productive to build friendships too.
Pretty excited about GroupMe 4.1, with two new features. Special thanks to Neil & Cam for originating the Split feature as a weekend hack and Jareau at Balanced for their support on the payments end.
Just in time for our third straight year at SXSW, we’re introducing an awesome new version of our iPhone and Android apps with two great new features.
Deals to use another company’s API usually require the most legal oversight and diligence, because you’re typically exposing your company and your users to another company’s terms of service, privacy policies, etc. — not to mention whatever potential liabilities are created by the new product you’re building.
One of the trickiest things to navigate in these deals is the balance between legal protection (contract clauses that may compromise the product) and product execution (building the best possible user experience). Being good at BD means placing yourself squarely in the middle of that tension, acting as a buffer between the product vision and the legal red tape.
After several months of negotiating an API deal for GroupMe, here’s what I’ve learned about the best way to buffer, in no particular order:
- Be product oriented. Know what the vision for the final product your team wants to build is, inside and out. Stay involved throughout the design process, from initial wireframes to beta builds to the public release. Understanding how everything is supposed to work lets you evaluate how restrictions or requirements the API company’s lawyers (or your own) try to put on you could impact the final product. Better to catch any potential hiccups early in the development process. An added benefit is that with each contract revision or additional round of negotiating, you don’t need to run to (read: bother) your product team to see how the latest deal terms affect their work.
- Don’t work in isolation. It’s inevitable that you’ll need to consult with your product team for certain things, so keep them in the loop, particularly for negotiations that are taking a while. If there are unavoidable legal clauses that affect the product, let them know as soon as possible. If the deal is getting delayed, tell them, so they can adjust development cycles and plan accordingly.
- Pretend you have a J.D. Before sending a new draft of a contract or other legal agreement, particularly one that’s been redlined and has comments from the other company’s attorneys, to your lawyers, read it yourself. Try to understand all the legalese. You may not get it all right, but by presenting it to your lawyers with your own opinions/reactions, you not only gain their respect but you can frame the subsequent discussion. For instance, a change may be requested that your lawyers have no problem with from a pure legal perspective, but that negatively impacts your product. By getting smart about contracts and legal fine print, you can move negotiations to a close much quicker.
- Push back. Don’t be afraid to push back against your own lawyers. Know what matters for the end product, and fight for it.
- Good cop / bad cop. When asking for concessions from opposing counsel, find the right balance between making the ask yourself versus having your lawyers do it. It can help to frame it as a good cop / bad cop situation, with the lawyers being the hard asses and you using softer negotiating tactics in a backchannel.
- Have a backup plan. Despite your best efforts, things may fall apart. Be sure that you, and your product team, have a backup plan. Other API’s may not be as elegant or do everything you want, but don’t put all your eggs in one basket. Do contingency work in parallel to negotiating the primary deal; don’t wait for it to fall apart. For BD that means making contact, queuing up legal effort, and evaluating terms. For product it means testing the API, talking to other developers, and resource planning. All that work may end up being redundant and ultimately unnecessary, but in the event you do need a fall back option, you’ll be glad you did.
A goal without a plan is a wish.
(Herm Edwards, in the fantastic 30 for 30 documentary “Broke”)
I’ve been on vacation this past week, enjoying the quiet and comfort of my parents’ house. The plan was to spend time thinking about my goals for 2013, both personal and professional, and of course, devise corresponding plans.
But, as usually happens when I’m home and unplugged from the office, I’ve crossed very little off my to-do list, including the aforementioned goal setting. What I have done is completely decompress: read a few books, cleared through most of the saved articles in my Pocket, watched a lot of NBA, and played a ton with my sister’s new puppy.
And I think that’s incredibly essential to setting goals and making plans. You need clarity of mind and spirit to truly understand what goals you want to achieve. Only after really removing yourself from the day-to-day minutiae of life can you ask yourself the tough questions about what you want to achieve, and why - not to mention answer them with the necessary specificity to make realistic, actionable plans.
If a goal without a plan is a wish, then setting a goal without clarity of purpose is dreaming - somewhat real, somewhat not, and likely something you’ll forget.
Similar discipline is required when setting partnership and strategic goals. It’s easy to get caught up in metrics that you haven’t really thought through, or set goals at arbitrary levels (e.g., we need 5 partners live 3 months from now). Take the time to step back and unplug every now and then; recalibrate and reset your outlook on everything about your business. Then set some goals, make some plans, and get back to work.
The native Facebook app released last month deserves all of the praise it’s gotten. Functionally, it’s worlds better than the company’s previous efforts in mobile (read: it’s actually usable). Now that the product is up to snuff - though there’s still certainly remove for improvement - the calls for Zuckerberg & Co to better monetize mobile will be even louder. (See: Barron’s declaring the FB stock worth only $15, partly because of their slow and underwhelming ability to monetize an increasingly mobile userbase.)
Facebook claims its new mobile ad units, Sponsored Stories, are doing well. But I think they’ve still got a long way to go. For the past several weeks, I see barely any Sponsored Stories in my mobile News Feed. And when I do, I either see the same pages repeatedly (Amazon, more often than not), or I see ads for pages I would never, ever like. For example, some random restaurant in NYC.
Together, these points speak to an inventory problem; namely, it seems Facebook doesn’t have that many buyers for its shiny new mobile ad product. That will change over time though, and it’s something I’m sure their ad sales team is already aggressively working on correcting.
A bigger issue is the technology one, particularly the algorithms that dictate what content, including ads, that users see on Facebook mobile. For a long time now, those algorithms have been different than those on the web. I see different content from different friends on web versus mobile. And almost always - for me, at least - the content I see on mobile is worse. Too often my mobile News Feed is cluttered with updates from “friends” I haven’t interacted with in years. For example:
I knew Siddhant six years ago, my sophomore year of college. After that he moved back to India and we’ve had negligible interaction on Facebook since (wall posts, photos, pokes, whatever), let alone even spoken. Similar situation with Kara. Yet their content is taking up valuable screen real estate on my phone. It’s mucking up the basic user experience of Facebook, which runs the risk of driving users away.
Perhaps even more crucially (at least as the markets are concerned) is that this algorithm problem extends to Sponsored Stories as well:
While whatever Facebook knows about me conceivably does give a good indication that I’d be a probable candidate to “like” Samsung or Amazon on the platform, showing me that Krupali & Anneliese liked those pages does not in any way incentivize that behavior. Frankly, I can’t even remember who Krupali is and I’ve maybe had 30 total minutes of 1-on-1 interaction with Anneliese in my life.
Facebook’s whole pitch to brands is that their ad units are more powerful because of the social context around them. But if that context proves to be hollow, users won’t click. And when users don’t click, advertisers stop spending money.
This is an engineering problem, one that I imagine Facebook will fix over time. The question is how much time, and whether advertisers will have the patience to wait.
Lately I’ve been thinking a lot about timing, specifically how doing things (e.g., executing a partnership) as quickly as possible isn’t always best, despite the highly en vogue “move fast & break things” startup mentality.
As a general rule of thumb, I try to take action on everything that comes across my desk within 24-48 hours. That could be following up after a call/meeting, responding to an email, addressing a social media mention, whatever. I don’t always meet this goal, but I strive toward it. (In fact it’s one of the things Jared holds me accountable to as part of Skype/Microsoft’s official performance reviews.) Prompt responsiveness is crucial to building good rapport. It’s also tremendously helpful in maintaining momentum during deal-making, which often stagnates without continual touch points to move things forward.
But I’m increasingly learning that there are times it’s advantageous to be a bit more deliberate, particularly when communicating with a potential partner. If played correctly, slowing the pace of response has upside. Not appearing too eager. Posturing for better terms. Buying time to think through options or gain (more) leverage. Using the silence to gauge how interested the other party truly is.
Knowing when to employ which tactic is something I’m still trying to figure out, but it’s clearly something decided on a case-by-case basis. A few important considerations:
1. Overall pipeline. Where does the partner/deal in question fit in the larger context of everything you’re doing? Do you need this first to open other opportunities (i.e., be the first domino to fall)? Or are you better served holding this for later because it has a lower (or different) value than more immediate priorities?
2. Product announcements. Are the partners part of a product launch or subsequent to it? What’s the story you want to craft to the press & general public? Will the partnership announcement be lost in the buzz around the new product or do those narratives reinforce each other?
3. Multiple partners. If you’re trying to launch with several partners at once, you’ll likely face a chicken-and-egg problem: partners won’t commit without knowing who the other confirmed partners are. It’s a delicate balancing act moving each individual relationship forward at the same pace. You want to get them all to a point you feel confident the deal will close before doing the big unveil, working through all the other issues first. Another wrinkle is if you engaged some parties before others, meaning you’ve got to move them all along at different speeds so that everything is ready at the desired date