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How to use Business Development in a startup  

Via this post, here's a great set of slides by Charles Hudson, about when to hire someone for Business Development, and how to use them properly.

Here's a summary/extract of some of the key slides:

The purpose of business development is:

  • Licence someone else's technology or content for use in your product or service
  • Distribute your product or service through someone else's network

Revenue growth, sales, "business guy" are not BD roles.

First, make sure you actually need BD. Maybe you want a business hire who is not a BD person, to work on relationships with key partners, do market research, or help you sell your company. BD is costly to staff, more so than even a talented engineer or designer, so make sure you really need it.

BD creates extra work for the product team. If you're not willing to do the extra work, don't hire a BD person. Be aware that internal projects will often get deferred to process deals signed by BD.

Make sure the relationship between BD and product is healthy: don't allow overly padded estimates of delivery time, but also don't allow BD to over-estimate their likelihood of closing deals. In addition, make sure that your BD people don't treat pre-deal engineering work as "free" - spec work and mockups cost, and bringing in your top engineers to a meeting is very expensive. But make sure your engineers respect the BD function too.

The presentation also includes information on how to evaluate Business Development deals, and how to make sure you're not caught out by typical BD problems. It's worth a read.

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