So-called smart address book apps, like Brewster (or Sensobi, a GroupMe acquisition, before them), try to make how you communicate with your contacts as efficient as possible. A critical feature, for me at least, is an automatic notification to contact someone with whom I haven’t communicated in a while. It’s something I’ve been doing manually for my personal network for years, with a series of lists & spreadsheets that invariably become useless when I stop updating them.
It’s really important to do the same in BD. Often the first few times you talk to a potential partner, nothing comes of it. Or you meet someone with whom there’s no obvious business relationship. But these things are so fluid that reconnecting 3, 6, 12 months down the line may yield something awesome.
For instance, over a year ago, Steve & I had some preliminary discussions with Kristina Simmons, lululemon’s expert on emerging digital products. She’s incredibly plugged in and aware of the latest consumer internet trends / apps / products. We pitched her on a partnership, but couldn’t get anything to stick. There was interest on both sides, but no obvious opportunities.
Fast forward a few months to SXSW 2012… Figuring Kristina would be in Austin, I shot her a note to reconnect, inviting her to swing by the GroupMe Grill. We hadn’t spoken in months. And while we actually weren’t able to meet up at South By, it did restart a dialogue that led to this:
GroupMe’s API is integrated into lululemon’s latest mobile apps, for their Sea Wheeze half marathon in Vancouver and an internal employees-only leadership conference. We’re incredibly excited to work with lululemon, and we’re talking to Kristina about a bunch of other cool ideas.
Just because a first (or second, or third) meeting doesn’t result in anything doesn’t mean it won’t in the future. Stay in touch with everyone, develop relationships - good things will happen.
Before working at GroupMe & L2, I was at the NYC Economic Development Corporation. Most of NYCEDC’s work is conducted via real estate development, but I was on the small team focused on the City’s “innovation economy,” specifically how to make New York a better place for startups. Across all sectors, not just consumer web, although that’s what gets the most media attention.
At the time, and even more so now, I think the biggest benefit of all of the City’s initiatives (financing incubators & coworking spaces like General Assembly, seeding an angel fund at FirstMark, hosting business plan competitions, etc.) is the massive signaling effect it’s created. Individually, each initiative may not actually create new jobs on a scale that’s meaningful or help launch the next Facebook…but in aggregate, they garner continued media coverage of New York’s tech ecosystem. It’s basically a unified marketing campaign targeted at every aspiring entrepreneur in the world, screaming “HEY LOOK AT US. COME HERE, NOT THE VALLEY.”
Arguably the splashiest of these initiatives is the engineering campus on Roosevelt Island. It was no secret that Bloomberg wanted Stanford, the most marquee name in the business - and that fits perfectly with the idea that, if nothing else, all of this City effort is about the message it sends. Having “settled” for Cornell, Bloomberg then poured more money into tech/engineering schools at NYU and the just-announced data institute at Columbia.
Bloomberg (and his expert staff) are spending more and more money, just to send a message. Yes, a lot of tangible good will likely come out of these schools, but not for a while. He’s playing the long game, but with very immediate short-term wins.
What will be really fascinating is to look back in 10/20/30 years and actually quantify an ROI .
Navigating the layers of middle managers and faux-decision makers at large organizations can be incredibly frustrating, but it’s often an unavoidable part of forging high profile partnerships. Success hinges on identifying which of the people sitting across the table will be your champion: the person who understands your product, believes in your vision, and is excited about what you can offer.
It’s critical to cultivate that relationship, because that person will be invaluable. She has insight into internal politics, can identify the right decision-makers, and can deliver your pitch outside of scheduled meetings.
Treat it like a true relationship though, meaning that you’ve got to give something to get something. Do everything to empower your champion to succeed. Most of the times a person will be your champion because it aligns with her personal incentives (more often than not, it’s as simple as her wanting to look good at work by finding the next cool new thing). Understand those incentives and do everything in your power to help.
Every few weeks I get an unsolicited inbound inquiry from a sales rep at a mobile ad network asking if GroupMe would be interested in working with them.
But none of GroupMe’s clients serve ads. Never have.
It would take a few minutes of work for the sales rep to know that. But the standard compensation structure for a sales guy doesn’t incent finesse. It’s a numbers game, so a few minutes spent tailoring a cold email is a few minutes lost.
Business development is different. Cultivating a partnership - a unique mutually beneficial relationship - requires an intimate understanding of the other party. Steve & I spend countless doing our research before making any contact with a prospective partner, regardless of it they’re a big company like MTV or a scrappy startup. A lot of our effort is guided by the principles I wrote about in my last post. We live and breathe their product so that it’s as familiar to us as GroupMe is. We read everything and anything we can to understand the company’s mission, culture, history, goals, and strategy. We talk to everyone we can.
Doing that gives us the best chance of pitching the right partnership from the start, and if that’s off the mark, of adapting on the fly.
You can never have enough information.
When I’m asked what exactly doing business development at startup entails, I often think of that scene from Office Space in which the Bobs try to figure out exactly what everyone does. And then that one middle manager freaks out with his “I’m a people person!” rant.
BD at a startup is a lot of different tasks, functions and skill sets rolled into one, and it varies by stage of company, by sector, and most importantly by what your product actually is. But it does often come down to being a “people person.”
For instance, at a consumer internet company like GroupMe, one of the most critical aspects of doing BD is working with brands. I mean brands in the most broad sense of the term, from retail brands like Nike, entertainment brands like MTV, sports brands like Manchester United, and everything in between. Brands are important because they give your company validation, users, and eventually, money.
Think of your role in working with a brand as being an “external” product manager. That is, your job is to liase between GroupMe’s product - both current and what you know is coming down the roadmap - and a brand’s needs. When talking to a brand, you’re looking to know everything about their goals, plans, strategy, and constraints. Only when you understand all of that can you map their objectives to your product.
And you can only do that if you have a really good sense of product. You don’t necessarily need to know how to code (though that doesn’t hurt), but you do need to know everything your product is and is not capable of doing, so that you can creatively brainstorm with the brand rep. And if your product can’t do what they need or want, then it’s up to you to assess if the potential opportunity of partnering with that brand is worth investing engineering work to get something new built.
When I meet new people who also work in tech, the conversation often starts like this:
Them: So where do you work?
Them: How’s it been being part of Skype / Microsoft?
A perfectly valid question. Last August, our 19-person startup became a part of Skype, a much larger company with a much longer history. In and of itself, a pretty big change that was sure to present a unique set of challenges (and opportunities). But barely two months later, Microsoft’s $8.5 billion acquisition of Skype closed, and we were officially Microsoft employees.
90,000 full time employees.
Another 90,000 contract workers, consultants, vendors, and other contingent staff.
35+ years of history, culture, and process.
Lots of process.
Often the biggest fear surrounding an acquisition is that the acquiring company will somehow pervert the acquired in some fashion: product, culture, or both. And often that fear boils down to a fear of process. It’s a necessary evil as a company gets bigger and older, but acquisitions often “fail” because process can stifle innovation, drain resources, and distract teams. Recent exposes on Yahoo’s strike out with Flickr and HP’s debacle with Palm only belabor the point. It’s why so many Instagram users were so upset when Facebook bought it. They were scared their favorite app was about to be ruined. (Jury’s still out on that.)
GroupMe has been fortunate to largely escape the downfalls associated with being aquired by a larger company, or in our case, two larger companies. Sure, we have to use Outlook instead of Google Apps and filing expenses takes a bit longer, but those are relatively minor nuisances.
That everything has gone well so far is partly due to our geographic isolation – we still operate independently in New York – but more a testament to great management. Both our bosses at Skype, and Steve & Jared, do a really great job of shielding the team from unnecessary process. We’ve got our product roadmap and our engineers are given the runway and the support to pursue it, with minimal interference. The same can be said for business development efforts. In every way that counts, we still believe ourselves to be a startup and operate that way.
That said, it’s inevitable that we will run into stumbling blocks. Instances when, were we truly still a startup, we would move faster. For the past few months, I’ve been dealing with exactly such a situation. Long story short, I’ve been trying to get approvals for agreements with external service providers that GroupMe needs to test some new product ideas we’re playing around with. Not the sexiest task, and not business development per se. But much of what I learned navigating the Skype/Microsoft corporate behemoth from London to Redmond and back can be applied to BD partnership building, or of course anyone who finds themselves suddenly part of a much larger organization:
1. Start early. Don’t underestimate how long it will take to get approval from all the required parties. Cutting it too close will negatively impact launch targets and development cycles, and the longer you’re delayed, the faster team morale will fall.
2. Over communicate. Not surprisingly, whomever you’re dealing with has other things on their plate and they’re often not going to care about your needs, at least not as urgently as you’d prefer. You’ll find yourself explaining the same thing – who you are, what you need, why you need it, what other options you’ve already explored – over and over again. It’s annoying and tedious, but it has to be done. Better to repeat yourself early on than lose time later.
3. Focus on the key decision-makers. Don’t be surprised if every time an email regarding your approval request is sent, more and more people are added to the cc line. It was pretty amusing to see an email thread that started with just me and a single compliance rep in Redmond balloon to over 20 recipients. As more people and departments are looped in, be sure to have a running list of who actually holds the power and who doesn’t. Know who you need approval from, and in what sequence.
4. Anticipate, and understand, concerns. Early on, you need to sit down and identify every possible pain point and potential risk associated with what you’re asking for. Think like a lawyer. Be paranoid. For each possible issue, prepare a solution and mitigating response. Even if it’s not the right one, thinking about it early will pay dividends later. Critical to devising solutions is understanding the other party’s reason for being concerned. Try to empathize with why certain processes and protocols are in place. Take a step back and understand that yes, for a 90,000-person company, that seemingly ridiculous extra step actually makes a ton of sense. Then scope it down to your level and figure out how to make it work within your constraints.
5. Respect resources. You can’t get things done alone. You’ll need the help of lawyers, finance guys, compliance reps, risk auditors, and more. Be cognizant of their schedules and workload, doing everything you can to make their lives easier when it comes to getting your specific project approved. Offer to do anything and everything you can to assist, and then actually follow through. It’s more work for you, but you’d rather have ownership over as many of the tasks as possible.
6. Queue it up. Related to #3, know exactly what steps need to be completed and in what order. Many times you’ll be able to pursue several things at once, laying the groundwork for step D while taking care of step A for instance. This is crucial to avoiding the small 1-2 day delays that can creep into a project from step to step.
7. Save your trump card. More likely that not, you may be initially frustrated in your first attempt to get everything approved. If you blow your trump card – in our case, asking Tony Bates, president of the Skype division at Microsoft, to intervene – too early, you may regret not having it later. You also don’t want to be the guy that steps out of the chain of command on a whim. Try to find a solution yourself, within established channels, before calling in the cavalry.
If none of the above help you get approval from your corporate bosses, then you can always go rogue: just do what you need to do, and ask for forgiveness later.
My first day at GroupMe was July 5, 2011. It’s been almost a year, and it’s been everything I hoped for when I joined. It’s also been incredibly eventful. Seven weeks after I joined we were acquired by Skype. We’ve launched several new versions of the product. I slanged ‘chos at my first SXSW. I got my first taste of telecom negotiations at Mobile World Congress.
Over the past 323 days, I’ve been fortunate to work with a tremendously talented team. I’ve learned a lot. But I still have a lot more to learn, many more people to meet, much to accomplish (and miles to go before I sleep). My ambition for this blog is that it serve as a collection of coherent thoughts. If anyone else finds it useful, great.
I’ve tried to maintain a blog several times in the past but never succeeded. Here’s to trying again.