After beginning my career as an investment banker, I was quickly disillusioned with the routine. Excited by the world of technology and innovation, I decided to pursue a job on the business side of tech and began researching what that meant and what I needed to understand. My self-edification quickly revealed that not much existed out there in a formal, documented fashion about this fairly new realm of professions. I turned to a fragmented list of blog posts and advice from friends; passing along the same collateral to those who solicited my advice after I had made the switch myself.
One of those sages I turned to for wisdom was Alex Taub, a close friend and bedrock of the New York tech scene. Over the last year and a half, he and I have been working on co-authoring a book called Pitching & Closing, about business development (aka BD or Biz Dev) at tech startups. The book is due out July 25, 2014 and serves as a how-to for deal making and partnership creation.
Below I’ve outlined 10 tips Alex and I have for those in the business side of tech on how to get in front of partners, pitch the deal and close the partnership.
1. Network, network, network
A big component of business development is partnering with other people, companies, and organizations for the mutual enhancement of products and services. As a result, networking is an integral part of BD, especially in the early stages of your company’s existence. In-person networking is the best, and is often comprised of attending meetups, Skillshares or other functions. Be sure to collect business cards and/or full names of attendees.
2. Follow up
After you’ve made a host of new contacts from networking, be sure to follow up so that you can solidify those new connections. Using the business cards you collected, promptly send a short email thanking that person for taking the time to connect with you and set a concrete time and topic for potential follow-up. Adding those new connections on LinkedIn shortly after the event can also ensure the longevity of the connection.
3. Learn how to get in front of people you don’t already know
A “cold reach-out” is an email, a self-made introduction, or an inquiry to someone whom you have never previously met. Often, the cold reach-out is done because you have few (if any) mutual connections, and none of them are strong enough to make a warm introduction. The cold reach-out isn’t the sell, it’s the tease to get to the sell. Keeping your email short and intriguing will get the person to ask for more.
4. Keep a list, understand the companies
Add any new strategic, potentially advantageous name to a list of future partners. Keep tabs on the products these people are building and how they might be relevant to yours.
Understand those companies’ backgrounds and histories. Notable information includes the company’s founding date (or its approximate age), its fund-raising, and its key employees. Other fundamental details include team size, location, and employee breakdown, especially how many engineers and how many nontechnical employees work there. The best places to find this information are sites like CrunchBase, TechCrunch’s database warehouse for information about startups in all industries, AngelList, and a general Google search. In addition, you can read articles in major publications such as the New York Times’s DealBook section, VentureBeat, Fast Company, and Mashable, among others.
5. Identify the type of partnership you want to pitch
Partnerships almost always begin when one company is looking to gain from another company something that it cannot or will not build or achieve by itself. That roster of people you met might turn into something potentially lucrative or interesting for your company. Once you’ve identified a company that might be interested in partnering with you (but before you reach out to them), figure out what kind of partnership you are seeking.
There are 3 kinds partnerships:
1. Product partnership (integration partnership): a partnership in which one company integrates another company’s technology into its own product
2. Brand partnership (cobranded partnership): a partnership in which one company leverages another company’s brand or two companies leverage each other’s brands
3. Distribution partnership (network partnership): a partnership in which one company uses the distribution system of a second company to grow its own user base
6. Make the pitch punchy
Most people think that making the pitch is the crux and culmination of a business person’s job. That’s not necessarily the case, but it is an important foundation for securing a partnership. The standard business pitch has not changed in decades. Over time and with more confidence, you can begin to deviate from the classic slide-by-slide method. Indeed, in the technology space, most classic pitches seem outdated and can be met with a tepid response.
7. It isn’t over until it’s over: close the deal
In order to close the deal, there are a few things you need to keep in mind. First, the deal cannot be implemented until the terms and kinks are ironed out and all of the paperwork is signed. To get the partner to do so, create a sense of urgency and use competition to nudge partners toward the close. The real work begins once the deal is closed.
8. Be persistent
Persistence is a sacred virtue in the world of fast-moving companies. This quality is what enables many self-starters to drive deals forward and make action happen, even when the other people involved in the process are not necessarily as proactive.
9. Learn how to handle rejection
Very few people enjoy hearing the word no, especially in a professional setting. The rejection itself can be subtle or overt, depending on whom you are pitching. In BD, deals fall apart or never come to life in the first place. You try to move on. Most often, rejection comes about because of a misalignment of company interests or product offerings rather than a personal dislike of the person pitching or the company.
10. Make yourself indispensable and don’t hesitate to ask for favors
Networking, reaching out, and following up all lead to the art of being helpful, adding value, and asking for help. In the BD world, favors can go a long way. The BD and deal-making professions usually straddle the divide between asking for and giving out both personal and professional favors, both of which rely on maintaining a large network of colleagues and friends.
If you want to learn more, pre-order up your copy of Pitching & Closing today!