Business Development Archives - Shockwave Innovations

Favorite Trade Show Hacks

Imagine this scenario. You decide to pay $2,500 for the cheapest exhibit option at your industry’s big annual trade show. You know you’ll spend another $2,500 on cheap travel, lodging and meals for you and a fellow employee plus some marketing materials. When you get there you discover that the 6-foot table you’ve been assigned is in the back corner of the exhibit hall near the loading docks and you return two days later with a handful of crappy leads, sore feet from standing hours on end and a big stack of brochures and other marketing material that went unused.

Amazingly, this same general disappointment can happen with spending $20,000 or more. This article describes some of my favorite hacks for gaining legitimate trade show value at EXTREMELY low cost.

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Tell Me Your Price and I’ll Tell You My Terms

negotiation I didn’t invent this quote (can’t remember where I heard it) but what a great one to help remember that with most business-related transactions, price is definitely not the only factor. Three such transaction types relate to the things I commonly write about on this site:

Fundraising (valuation)
Technology licensing (royalty or license fee)
Acquisition (price tag)

In this article I provide insights into possible terms for each type of transaction that could dramatically change the value equation.

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Licensing Your Technology

Some startups build core technology with the sole purpose of making money by licensing it to others while other startups later discover they have something that could be licensed as a revenue enhancement opportunity. In either case, licensing your intellectual property (IP) is a fairly involved venture with significant downside risks, if done wrong. But if done correctly and with the right partners, magic can happen. This article explains the risks and opportunities with technology licensing deals from a business development and deal structuring perspective (rather than a purely legal perspective).

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The Hidden Value of Embedding With Your Strategic Partner

It usually takes a huge effort to get the attention of a big strategic partner and impress them enough to get a formal partnership. In fact, might have you read my articles titled “A Secret to Securing a Strategic Partnership with a Major Player” and “Get the Strategic Alliance Partner to Come After You” and they worked. Either way, congrats. Unfortunately, at that point you’re still only half way to fully exploiting the relationship. You might get some interesting press attention right after the announcement and your employees will certainly be proud of the accomplishment. But that doesn’t mean your revenue production will suddenly shift into a new gear. In this article I’ll explain how to significantly increase your leverage by embedding with your new strategic partner.

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A Secret to Securing a Strategic Partnership with a Major Player

Most startups desperately crave a partnership with a big, strategic player that could offer them significant leverage and credibility. Just think about the giants in your particular industry. That’s who I’m talking about. But they are huge and you are tiny, so how do you secure a real partnership in which they actually utilize their size and influence to help you? Too many startups only think about the benefits they will get from such a partnership when the only way to get the partner to even lift a finger is to provide real value to THEM.

In a previous article I described a way to get a prospective strategic partner’s attention (see “Get the Strategic Alliance Partner to Come After You”). In this article I’ll describe how to leverage that initial momentum into a real partnership that produces real results. I’ve secured several such partnerships throughout my professional career and have identified three primary categories of the needed value creation I described. Let’s dive into each of them further to see what your secret ingredient(s) could be.

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Get the Strategic Alliance Partner to Come After You

Begging The courtship almost always starts with the small company approaching the HQ of the big company they desire as a strategic partner. Usually, the big company is too distracted or the joint value from a partnership isn’t perceived as significant. If very lucky, a successful pitch is followed by numerous conference calls, lab trials, partner program paperwork and accompany payment. Eventually, the new partnership is revealed to the big company’s sales team and the pitching starts all over again. After all, if this sales team doesn’t take interest in the offering then all the work leading up to that point was wasted. So why not reverse the sequence of events?

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Exclusivity – Run Away or Embrace?

It finally happened. You’ve been trying to get the attention of a huge strategic partner and finally they gave you a chance to explain the value you can bring them. In fact, maybe you were fortunate enough to have them come after you (see related article titled “Get the Strategic Alliance Partner to Come After You“). Not only do they get the value you can offer but after a couple of subsequent meetings they utter the “exclusivity” word. You’ve heard from your advisors and read in books to avoid exclusive relationships if at all possible. But you don’t want to bring the positive momentum to a grinding halt by immediately saying “no”. Where do you go from here?

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Build Out a Channel By Swimming Upstream From Your Deals

You have a product that is ideally suited for a channel-based distribution strategy. But every time you approach a prospective channel partner, they expect you to already have landed some customers and already have an opportunity pipeline of deals to hand them. In other words, they are looking for traction and they probably also perceive risk with your value proposition, possibly because you’re at such an early stage or maybe because you’ve never done business in their country. So now you’re sort of stuck and don’t know where to go next to start building out your channel. I have an idea to try.

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Co-Marketing Explained

Thanks to HubSpot for this valuable explanation of what co-marketing is and what some of the common forms are (article here). One of my blog categories is devoted to business development (BD). BD relationships can take on many different forms but often involve some form of co-marketing as part of the partnership. Startups and early stage companies often don’t have the budget, brand recognition and marketing capabilities of their new-found strategic alliance partners. In these cases, co-marketing can be one of the best value drivers of the relationship.

Here are some of my personal recommendations for optimizing co-marketing opportunities:

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More BD Resources = More Chaos

I’m a firm believer that business development activities should be focused and with a stated purpose/objective and expected return. But what most companies do is hire one or more BD reps and send them out in the jungle to see if they can find anything interesting, which I guarantee they will do. The problem is the more BD resources you have the more “interesting” things they will bring back, regardless of whether they are consistent with your company vision/direction or can be supported by available company resources. This often leads to chaos because no benchmark is applied for deciding which interesting things should actually be worked on. So instead, too many things only get minimal attention and suddenly the company’s focus is lost or diluted. Eventually someone screams “stop the madness” and all but a couple of the truly justified BD projects are shut down. But unless the BD staff is shrunk, this same chaotic loop will continue over and over again.

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Consider Everything Short of a “Yes” a “No”

I recently heard Dr. Robert Wiltbank from Willamette University use this analogy and loved it so much I had to share it with others. Entrepreneurs are, by nature, very optimistic. It’s one of their core survival skills. But this often makes it hard for them to recognize signals of negative feedback. This applies to things like the success of their product and progress towards the business plan targets. But it also relates it to investor feedback while pursuing fundraising, customer feedback while pursuing a sale or vendor feedback while trying to secure a partnership. Experienced sales professionals are trained to listen for negative feedback and use various techniques to assess the real viability of the opportunity. But most co-founders aren’t experienced sales professionals and the techniques I’m referring to aren’t easily learned from a blog post or a book. I’ll explain further.

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Disguising PR as Strategic Business Development

I have a lot of pet peeves with business development, having run the function for multiple companies. This one in particular relates to how, too often, a PR-related effort is disguised as business development (BD). An example might be a company that uses the BD team to get a mostly-meaningless MOU with another company just for the purpose of creating a press release that can be posted on the website. Or maybe your BD team got you into some meaningless partner program that cost $5K to play but you have no real intention of doing much with it. It’s not that the resulting press release has no value. But the effort should be recognized as a marketing effort or something you’re doing to facilitate fund raising. It’s just that your BD rep is the best one to deploy in order to secure the relationship compared to someone responsible for marketing. Let’s explore further.

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