by tomnora | Aug 30, 2011 | Business Development
People often undervalue Business Development as a critical function in a startup. What is it? How does it differ from Sales, Marketing, Major Accounts? When is the startup big enough to dedicate a headcount to Business Development?
BusDev is less understood than most titles, and widely ranging in responsibilities. It is the critical glue between sales functions and the senior management. BusDev is relationships, longer term thinking, non-revenue partnerships, communication between Sales, Marketing, Engineering and Finance if you have all of those covered.
BusDev people see the potential connections between your company and several others. They find creative ways to do business or vastly improve business relationships, especially when they can work with BusDev counterparts at target partners. It’s like the 2 lead guitarists of 2 bands playing together going off into the corner and working on just their parts, and relationship. They’re focused on one thing.
BusDev people are also focused on one thing –– taking the businesses beyond simple linear transaction based relationships. They don’t worry about this weeks revenue or finance, etc.
In a smaller or earlier stage startup, the CEO covers most areas that have no dedicated leader, BusDev being the most common unfilled spot. Sometimes this works but often not. The problem is when the CEO is not a good match for this position – in experience, skill set or desire. It also distracts him/her from other CEO functions, and is not as impressive to the client, partners.
So, if you can afford a strong BusDev investment early, it can be a secret weapon that ensures your long term scalability and gets you funded.
Contact me if you’d like to discuss more.
by tomnora | Feb 1, 2011 | founder, startup CEO
The last blog entry I wrote [Who’s the Boss? What is a CEO?] made me think about overall business decisiveness and it’s critical role in growing a startup properly. There are many synonyms and attributes of decisiveness – certainty, determination, finality, resolve, authority. But there’s no single formula or magic combination for this quality.
Decisiveness is one of the key skills for the leader of a startup to succeed; not everyone involved, but definitely the leader/CEO. It’s fine if you’re not that type, just be honest about it and find someone to take role. An indecisive leader will get run over by the crowd quickly and lose the respect of those around him/her; better to let someone else run the show and focus on another task.
A strong CEO in an active startup should be making and implementing several decisions every day. The job of CEO of a real operating company includes many lonely times, no matter how many people surround you. But no matter what, the bullseye in on your head.
For most strong leaders decisiveness is an innate quality, a feeling of empowerment and confidence that comes from somewhere within as well as the support of those around you. Some people are just born with it, or into it. A great example is Sophia Amoruso.
You thrive on the pressure of making decisions. Inspiration comes from beating obstacles in your past, overcoming a hardship or two, intense desire to succeed, past (or current) poverty, or some other experience in life where correct decision making took you from bad to good. Also, a startup CEO is usually much more decisive in his/her 2nd or 3rd startup than the first. They’ve “been there before”, understand the forks in the road, have been hardened and/or humbled a little by mistakes.
Lack of decisiveness at the top impedes growth. Lack of decisiveness running a startup usually is related to lack of experience, a different personality, or lack of desire to be that person. Can decisiveness be developed or taught? I think so. Self-confidence?
Probably not so easily acquired. I was quite lucky early in my career to have several great role models (and a few bad ones). Examples and proactive mentoring came from several places for me, some quite early in my career. I’m now trying to give back by advising others and mentoring startups.
So be decisive as the overall leader of your startup and surround yourself with support to make better decisions. Find mentors, delegate, let go of details. Or be honest with yourself if this isn’t you and find find someone qualified whom you trust to take that role and let them run with it.
Your startup will be the winner.
Find me on Twitter.
by tomnora | Jan 27, 2011 | Revenue Growth, Scalability, venture
REPOSTED 2013
:: An ominous title for a blog post, but “Grow or Die” has been one of the most basic rules in the high-growth startup world for decades. And by growth I mean revenue growth.
The first trick is to offer something that the world will need more and more over the next few years (growing market), without that it doesn’t matter much anyway; your product/service/thing must “catch on”. This can be somewhat manipulated by your successful marketing execution (i.e. why one iPhone app succeeds vs. another).
If you do have something compelling, you’re either running as fast as you can to catch up to something bigger or to stay ahead of those below you. Lack of growth will encourage others to come along and knock you off the track, attack you; they will smell blood. Inconsistency in growth can do the same thing. Millions are currently watching boastful high flyers like Zynga, Google, and Facebook to see if they stumble. If you’re not offering something in a growth market, it doesn’t matter so much; you become either a zombie/lifestyle company or shrink slowly then die.
If you’ve got something hot, the idea is to spread your footprint quickly and prevent others from knocking you off (first mover). Growth means bigger and more complex barriers to entry – more advertising, products, support and security for your users/buyers, advanced services, etc. And protection form death. And gasoline to create more growth.
Flat to negative revenue growth is a real red flag, especially for early stage companies. Your stakeholders start to wonder what is going wrong? Did we build the wrong product? Are we becoming passé? Time for a new CEO? And all those other depressing clichés. If you’re venture funded, things get kind of ugly -unhappy board members, cut off from communications, down- rounds to keep you going, or no more funding.
Many early stage founders aren’t sure how to handle this requirement for success. What about users? Eyeballs? Hits? Press Mentions? Those are all nice and should be designed impact revenues, but usually aren’t a real measurement (unless you’re Twitter). Revenue growth must be the core strategy and drive all other strategies.
Continued growth becomes more and more difficult for larger companies, you must “feed the monster” as it grows. Many companies are currently hitting the wall after strong growth, like MySpace, Yahoo, Dell, Fedex. Even Google is starting to struggle due to a slowing growth rate, and attracting attention for this problem – losing employees to Facebook, trying across the board 10% raises, switching out their CEO of 10 years.
But the focus here is not big companies, it’s startups in their first years of revenue. Companies that hit their “first millions” then get stuck, and often panic. I was once VP of Sales for a startup that went from zero to >$10 million in one year, then back to zero the following year. Talk about panic! That’s an extremely contracted timeline for up then down the growth curve, but the general trend is not that unusual in startup land – up then down quickly. In our case we didn’t have our internal house in order, and didn’t know how to handle our sudden success – no strategic planning and thereby no adherence to such a plan.
The bottom line is that continuous growth, at a good rate, is imperative for long term scalability. If this is a hole in your business strategy, don’t ignore it. Put your heads together, hire expertise, call your advisors, revisit your business models, sacrifice sacred cows, and respect this key piece of your success.
But make sure you deal with it.
