We talk to startups and investors, you get the value.
Dear friends, we’re happy to announce our brand new content partnership! We are going to please you with written versions of the “Maslow-ish” audio-podcast from the creators of NODE PR agency. This is a podcast about communication in the broadest meaning of this word. Everything considering translating messages into the surrounding environment: from psychology and sociology to marketing and networking.
In this podcast episode, Kseniya Zaykova, the founder of NODE PR communication agency, and the invited guest Mykhail Chernov, the CEO of Refin Online, are going to talk about business development.
We talk to startups and investors, you get the value.
Business development is the creation of a business, when you put efforts to generate revenue in the future, explore and develop directions and create new business products.
Communication plays the most important role in this process. In my opinion, the majority of people confuse business development with sales or marketing. And business development is just a mix between sales and marketing.
It is often thought that a business developer, or, as people often call them, a development manager is the same person who does sales, but it isn’t so. Its most important function is to spot opportunities where others don’t.
I agree that this feature has been my superpower for the last 8 years. In my understanding, business development is working on new directions. However, the function to “see opportunities when others don’t see them” isn’t correctly understood in practical implementation.
Before coming to the podcast, I thought about how to pump this feature and prepare to start doing business development. And for myself, I determined what you need to know and understand about business models.
Today, Harvard Business Review identifies 52 business models — and those who want to engage in business development should navigate them and understand what they are. Further on, business development is divided into what is connected with the territorial and with the intellectual: you can develop the territory, or simply develop a confident direction, or you can develop potential directions.
Anything that is created from scratch usually follows one of two directions: either old needs are realized through the new business model, or new needs are realized through the old business model. Therefore, it is important to always note any action and how it happens.
In the current market conditions, most of the needs are met by the old business models. However, from a business perspective, one can easily enter the market by implementing new business models. In order to do this, you have to understand 52 business models in the first place, then to study strategic business planning as a subject, which is taught in universities, as well as the theory and practice of negotiation — since without negotiations, you will have no business process and no new beginnings.
Starting to engage in business development, it is important to do it not in a vacuum, but with understanding of why you are doing it. Usually, these are 2 options: either work for a company, or in some area for yourself.
It is important to take business development into a separate function — it is a vital necessity for any business. If you shift it to the sales department, where the KPI is to sell, then the sales team will be distracted by creating products and won’t meet the current sales KPI. If it is entrusted to the marketing department, then their task is to facilitate business development, but not to engage in it. And if we follow it to the PR-dept, then it is a completely different market.
The function of business development, which is not separated, is often the reason that the company doesn’t keep up with the times, doesn’t meet the users’ requirements and changes in market conditions.
Usually, there are various open information sources about companies, organizations, where it is easy to identify key persons with whom you can negotiate. Further, the search for a direct exit to the key person turns into a kind of a quest. For example, I often turn to Facebook to establish business contacts — this is a good working tool in the CIS. In foreign countries, LinkedIn works better there, as well as the existing culture of presenting to each other.
Look for a way out to people, conduct negotiations, you need to understand in advance what value you can bring to a person.
Business development is such an interesting tangle that you start to unwind, not knowing what to expect: you must always be ready for any contacts and communications and perceive them as a new discovery, and not a barrier to the implementation of tasks.
Since while creating new products or directions the point of uncertainty is very high (any new introductory, any new person can shift your business model, paradigm, your view of the process or problem in a completely different direction), then it is openness that allows you to build any communication.
Before any negotiations, I recommend you to conduct preliminary preparations:
Form up position and disposition.
Search information for an interlocutor.
Prepare potential questions from the interlocutor and answers to them.
When you come to the negotiations, it is also important to understand the goal of the conversation and what is the final result you want to get. If you don’t have such a thought — you aren’t ready to lead these negotiations and you’re simply not ready.
I follow two simple rules:
Win-Win, when both sides win in the negotiations and in the deal.
1+1=11, when sides unite to become stronger and reinforce each other.
These two basic rules will help you start building relationships. New directions are always small directions, for example, a startup. And here you need to understand that almost any large company is a supporter of the development of small companies, since their growth dynamics is always ahead of a large company.
The win-win value can be found by looking for different interaction models. For example, make profit sharing (when partners have clients, and you have a new product) and share the received revenue. You can also interest partners in cross-sale, cross-marketing: there are a huge number of legal tools.
Supporting the second rule, you have to pay attention to what you are developing. It is more profitable to unite two leaders in the market than to compete with each other. And if earlier brands competed with each other, now there is a common tendency to unite in order to give each other synergy. This is proved by a major deal between YandexTaxi and Uber to create a “digital monopoly” in the taxi market. This is a striking example of 1 + 1 = 11, when companies covered all their painful needs by merging, gaining in revenue, number of customers, and attracting taxi drivers.
If you look at the modern market, then indeed, there are more such conglomerates. The modern trend in business development is when large corporations start to unite and make a joint product.
This trend has become a common thing almost everywhere, from technology companies to things, including the fashion industry, where brands have never been part of a collaboration before. Competition in the telecommunications market used to be for districts, houses, and now — for each apartment and resident. In other words, competition has become a struggle point, it has grown manifold, and new players need to unite with old ones if they want to win something, or they need to change the business model and solve the old needs in new ways.
I have both the experience of a corporate player and a person who runs their own business — and from these two positions, preparation for meetings is no different. If we talk about how to approach communication from the business development point of view, then it is important to be known among people and for you to know the interlocutor.
Do not use NLP techniques (Neuro Linguistic Programming techniques — Startup Jedi). Indeed, some techniques can work, but if your interlocutor understands that you are using NLP, then you will receive nothing but negative from his side and the negotiations will fail.
Negotiations should be conducted with honesty, openness and courtesy. If you hide something from your partner with whom you conclude a win-win, nothing will work. If you aren’t open to communications, new opportunities, there will be no partnership 1 + 1 = 11.
No, I will not. Moreover, if this information is published somewhere, then it will no longer be of great use. The pressure lever isn’t needed in business development, but, it is more relevant in sales, for example.
If we talk about business development with the creation and development of new directions, the use of other business models in old markets, then this is not about tough negotiations. After all, the most important task of a business developer is to see new opportunities, and if the goal is to “squeeze out” someone, then this isn’t about new opportunities, but about how to get a competitor out of the market.
Unfortunately, or luckily, you need to accept that such a combination is possible and it can even have its pluses.
When entering a long-term relationship, you need to work on yourself and on how to please your potential partner, show that you can be complementary.
Currently, there are people with whom I like doing business in my environment. However, I often met others with whom I didn’t want to move on, but it was clear why this should be done.
It’s great when there is an opportunity to work with cool people and assemble a team of competent, open, honest people, those who are committed to creating and promoting a new business. However, we are at work — for work. If you need those people with whom you enjoy communicating, take the work out of the brackets.
Usually, there are 2 types of people, who react in a specific way to a request for a favour, for example, of presenting you to someone:
My percent of the possible deal is X.
I help you gratuitously but maybe, one day, I will ask you for a similar favour.
Both of these examples are fine. I am a supporter of the development of any kind of connection between the people by uniting them, presenting them to each other, exchanging contacts. I am very glad that I have many people on my life path who don’t have monetary/non-monetary motivation to connect me with someone.
Often startuppers, who work with the West, are trying to implement their rules into our subculture. And these are the rules you have to follow:
Don’t accept the mentality of one country on the territory of another. The culture of the countries is very different in image or communication. For example, in Russia, it is difficult for people even to come to someone with a request to introduce him, but in the USA this is a common thing as most of the transactions are carried out only through introduction.
The vital thing to understand is why you build up this communication. Always ask yourself a question: Why and what is the purpose of this meeting?
Most of the meetings are concluded with a lack of goal-setting. As a result, 80% of negotiations lead to nowhere, because neither side knows what they wanted from the meeting. I myself should admit that I have held many meetings without a goal, but in order to better understand what the other side is doing and this can also be some kind of a goal.
CIS residents very often try to arrange business meetings and mix them with building friendly relations. Relations in the United States are built in a completely different way: people can be business partners for many years without ever having lunch together.
In the end, there are parting words for those people who are afraid to try themselves in something: Don’t be afraid, just try and you will succeed!