As an engineering graduate in 2009, I got an offer to work with a startup. I got to be the 2nd employee, reporting directly to the founder of the company. The company was into Enterprise Mobility, which was a very new field back then. The technology was yet to reach at its top to fully support the requirements of the trade.
It can be really difficult for a startup to get customers, especially when the area of work is still naive. The customers are not very much open to the idea as most of them would prefer to invest in a proven solution. But enterprise mobility had yet to show its true benefits, and here we were the first movers.
To get new customers, was more than just a challenge. It required more than just some Business Development skills. What I have experienced firsthand has been described really well in the HBS article – “The Business Development Manager”
A new technology is always untested and always has a few takers. Most like to go with established products and would not risk their business for some new and unproven solutions.
What sort of product should be created, what kind of issues it should address, what kind of customers can be targeted and what value can the product create, are some of the questions that loom every entrepreneur who is looking to make its mark with a new technology.
With the new technology it is necessary to identify the problems the solution would be addressing. The products should meet the requirements of the market and at the same time should be able to create requirements and identify unmet needs to shape the market as per its capabilities.
This is where a Business Development Manager comes in. The major role the business development manager plays in a small firm, is almost that of a CEO. The BDM has to understand the technology and identify the areas where the technology can be useful. And then identify prospective clients, meet them and finally deliver value. This makes up almost complete lifecycle of a product in the organization.
The BDM has following key responsibilities:
A startup’s strategy specifies the role it plays in the ecosystem. The strategy decides the kind of partnership the organization will be maintaining with its customers. This is a very important aspect for a BDM and hence in a small organization he is a member who helps in formulating the strategies
The next step for the BDM is to analyze the market trends, the strengths and the weaknesses, partners, potential competition and come up with a list of some of the potential customers, who would be able to benefit the most from the product and will appreciate the product as well
Once the potential customers are identified, the task in front of the BDM is to create a pitch for them, that could describe the value that both sides could derive from the partnership. The pitch should also be able to quantify the benefits and should be modeled with projections of the incremental values to the partner’s balance sheets. Also it would be a lot more challenging as the pitch would differ for each partner depending on the kind of value addition the product would have in the partner’s domain or area of expertise
This is one of the hardest parts of closing a deal with the customer. As you are implementing a new technology, there are no precedents of a good value proposition that the customer can look upon as a benchmark. Also as the technology is not proven yet, the startup itself does not have a very high bargaining power. This is a very interesting aspect where the BDM has to convince the partner of the value of the product and get a deal that is beneficial to both partners. This also includes negotiations with multiple teams like Legal, Technical, Marketing etc.
The stage has been set, the actors are ready, the audience is waiting in anticipation, now it’s time to act. The hardest part of the cycle is the implementation. The BDM is supposed to lead the charge initially, acting as a bridge between the teams from both sides, introducing them, setting up the expectations, identifying the risks and mitigating them, to ensure a smooth implementation process. Future deals are dependent on how well the project is implemented and performs and hence it makes it crucial for this to happen with as less hiccups as possible.
The role of a Business Development Manager,in addition to the business sense requires the person to possess other skills as well. A good BDM must be able to Understand the business,
- should have good networking skills and negotiating skills,
- have an understanding of how an entrepreneur works,
- and should be able to understand the technology
It is a very challenging role with great impact on the business. MBA students with a keen sense of technology and people management will find this kind of role a great fitment to their skills.