Business development for startups 2013

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Partnership design and development for technology startups is based on a Business Model design. Partnership decisions impact the entire business model and require a disciplined approach.

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Business development for startups 2013

  1. 1. Biz  Dev  for  Startups An  exercise  in  partnership  model  definiFon,  
 planning  and  execuFon   ©  Copyright  2012  -­‐  FireMa4er  LLC
  2. 2. What  to  expect • • • • Prep  work  assignment  (done,  hopefully)   Part  1:  Defining  the  Biz  Dev  model  -­‐  30’   Part  2:  InteracFve  session  -­‐  n*20’   Part  3:  Planning  for  Biz  Dev  -­‐  45’ ©  Copyright  2012  -­‐  FireMa4er  LLC
  3. 3. Part  1 Defining  the  Business  (Development)  Model(s) ©  Copyright  2012  -­‐  FireMa4er  LLC
  4. 4. Biz  Plan  ≠  Biz  Model • Business  plan  is  a  story   • How  the  business  will  evolve  in  the  future  i.e.  science   ficFon   • Business  model  is  a  snapshot   • A  diagram  of  the  business  engine  i.e.  inputs,  outputs   and  components   • It  is  not  just  “how  you  make  money”... ©  Copyright  2012  -­‐  FireMa4er  LLC
  5. 5. Viable  model... • Is  repeatable   • Shows  HOW  business  results  are  achieved   • Shows  WHY  company  needs  money   • Shows  WHERE  to  put  it  to  work   • Shows  WHO  to  partner  with... ©  Copyright  2012  -­‐  FireMa4er  LLC
  6. 6. Biz  Model    Biz  Dev Partners Ac7vi7es Resources Cost  Structure Value   Proposi7on Customer   Rela7ons Customer   Segments Channels Revenue  Streams Adapted  from  the  Business  Model  Canvas  by  Alex  Osterwalder  et  al.,  2010 ©  Copyright  2013  -­‐  FireMa4er  LLC
  7. 7. Example:  Small  Inc.   • Developed  a  very  advanced  web   recommendaFons  sobware     • Built  to  integrate  with  eCommerce  sites   • Sells  sobware  licenses,  SaaS  subscripFons   to  large  eCommerce  sites   • Has  8  customers,  sales  of  550k/year   • Has  two  sales  people ©  Copyright  2012  -­‐  FireMa4er  LLC
  8. 8. Example:  Small  Inc.   Partners   -­‐  eCommerce   plajorm  vendors Ac7vi7es   -­‐  R&D   -­‐  Product   Development   -­‐  Sales Resources   -­‐  Intellectual   Property   -­‐  Dev  Team Cost  Structure   -­‐  Customer  AcquisiFon   -­‐  Sales  Team   -­‐  ConsulFng  and  Customer  Support Value   Proposi7on   -­‐  Customers:  Increase  sales   through  recommendaFons   -­‐  Users:  Easier  to  find  what   you  want   -­‐  Partners:  Add  valuable   feature  to  your  offering   overnight   !   Customer   Rela7ons   -­‐  Prof  services   -­‐  Maintenance   -­‐  Training   Channels   Customer   Segments   -­‐  Medium  Online   Retailers   -­‐  App  Stores/ Digital  Media   -­‐  Large   MulFchannel   retailers -­‐  Direct  sales   -­‐  SaaS   -­‐  Channel  sales   -­‐  OEM Revenue  Streams   -­‐  Licenses  +  Maintenance   -­‐  SaaS  subscripFons   -­‐  Services Adapted  from  the  Business  Model  Canvas  by  Alex  Osterwalder  et  al.,  2010 ©  Copyright  2013  -­‐  FireMa4er  LLC
  9. 9. Example:  Small  Inc.   • Partner  model  impacts  enFre  model   • Small  Inc.  and  Big  Inc.  must  have  “mirror”   models     • Different  partnership  model  =  
 different  tradeoffs ©  Copyright  2012  -­‐  FireMa4er  LLC
  10. 10. Part  2 InteracFve  Workshop:  How  are  YOU  going  to  partner? ©  Copyright  2012  -­‐  FireMa4er  LLC
  11. 11. What  is  your  model? Partners   Activities Resources Cost Structure Value Proposition Customer Relations Customer Segments Channels Revenue Streams Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010 ©  Copyright  2013  -­‐  FireMa4er  LLC
  12. 12. Housekeeping • 10  minutes  presentaFon   • 10  minutes  Q&A   • Focus  on  one  partner  type/model   • Focus  on  (partner)  value  proposiFon   • Discuss  among  peers  (It  is  not  a  pitch!) ©  Copyright  2012  -­‐  FireMa4er  LLC
  13. 13. Part  3 Planning  for  Business  Development ©  Copyright  2012  -­‐  FireMa4er  LLC
  14. 14. ExecuFon  Steps 1. Clarify  partner  value  prop   2. Select  target  partners   3. Execute  on  the  deal  pipeline ©  Copyright  2012  -­‐  FireMa4er  LLC
  15. 15. 1.  Which  value  prop? Partners Activities Resources Cost Structure Value Proposition Customer Relations Customer Segments Channels Revenue Streams Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010 ©  Copyright  2013  -­‐  FireMa4er  LLC
  16. 16. Tools • Value  Chain  analysis     • • • Where  are  you  capturing/creaFng  value?     How  much  value?     Which  porFon  of  the  value  can  be  shared  with   partners? ©  Copyright  2012  -­‐  FireMa4er  LLC
  17. 17. Tools Adapted from Simply Market Report, 2010 ©  Copyright  2013  -­‐  FireMa4er  LLC
  18. 18. Tools • Customer  AcquisiFon  Cost  analysis   • • • • How  much  does  it  cost  to  acquire  a  customer?   Does  the  partnership  increase  or  decrease  it?   What  is  the  most  effecFve  channel?     What  volume  so  that  it  makes  sense?   ©  Copyright  2012  -­‐  FireMa4er  LLC
  19. 19. Tools • Customer  LifeFme  Value  analysis   • • • • How  much  is  each  customer  worth?   What  are  the  most  a4racFve  segments   Does  the  partnership  increase  CLTV?   Does  the  partnership  “lock”  customers  in? ©  Copyright  2012  -­‐  FireMa4er  LLC
  20. 20. Tools Distributor Customer Direct
 Customer Adapted from Occam's Razor, 2010 ©  Copyright  2013  -­‐  FireMa4er  LLC
  21. 21. 2.  Which  partners? Partners Activities Resources Cost Structure Value Proposition Customer Relations Customer Segments Channels Revenue Streams Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010 ©  Copyright  2013  -­‐  FireMa4er  LLC
  22. 22. Models    Partners • Marketplace  (commission)    Merchants   • AdverFsing  (rev  share)    Publishers     • Infomediary  (subscripFon)    Data  Vendors   • Franchising  (fixed  costs)    Manufacturers   • Manufacturing  (sales)    Distributors ©  Copyright  2012  -­‐  FireMa4er  LLC
  23. 23. Models    Partners • Affiliate  (commission)    Merchants   • Licensor  (royalFes)    Manufacturers   • SubscripFon  (fees)    Content  creators   • UFlity  (metering)    Integrators   • Community  (donaFons)    Contributors   ©  Copyright  2012  -­‐  FireMa4er  LLC
  24. 24. Be  deliberate  &  focus • List  of  top  25  target  partners  (as  per  model)   • Score  them  by  criteria  (1  to  5)   1. $  value  of  deal  to  them!  (weight:  50%)   2. $  value  of  deal  to  you  (30%)   3. Speed/ease  to  close  (10%)   4. M&A  opFon  value  (10%)   • Degree-­‐of-­‐separaFon  is  not  a  good  criteria ©  Copyright  2012  -­‐  FireMa4er  LLC
  25. 25. Do’s  and  Don’t’s • Do   • • • Enroll  your  board  for  intros  to  your  list   • • Chase  brands  for  brands’  sake   Go  for  #1  in  your  list  first   Find  a  champion  in  the  organizaFon     • Don’t   Work  only  with  large  companies ©  Copyright  2012  -­‐  FireMa4er  LLC
  26. 26. 3.  How  to  execute   Adapted from Real Pro Systems, 2010 ©  Copyright  2013  -­‐  FireMa4er  LLC
  27. 27. The  “Standard  Deal” • Simple  to  design,  understand  and  deploy   • One-­‐page  term  sheet,  simple  excel  sheet   • Do  you  need  to  finance  your  partners?   • • Have  you  thought  about  product  features?   • Working  capital  posiFve  or  neutral   • ~0  custom  development  (90%  built-­‐in)   What  about  support? ©  Copyright  2012  -­‐  FireMa4er  LLC
  28. 28. The  “Standard  Deal” • Everybody  understands...   • • • • • • Licensing  agreement   Reselling  agreement   Revenue  Share  agreement   White  label  agreement   DistribuFon  agreement   ... ©  Copyright  2012  -­‐  FireMa4er  LLC
  29. 29. Partner  MarkeFng • Developing  markeFng  content  for  biz  dev   • • • • Biz  dev  presentaFon  (≠  investor  presentaFon)   Partner  case  study   Partner  financial  model   Technical  training  material   • Speaking/a4ending  industry  events   • Engaging  industry  analysts ©  Copyright  2012  -­‐  FireMa4er  LLC
  30. 30. Build  a  pipeline • Create  a  lead  generaFon  program   • • • • Partner-­‐focused  content  >  web  leads   Events  >  live  leads   Analysts  >  referral  leads   Put  a  $  value  on  each  opportunity   • Treat  partner  prospects  as  sales  prospects   • Convert  &  nurture  opportuniFes ©  Copyright  2012  -­‐  FireMa4er  LLC
  31. 31. At  the  table... • Ask  5  quesFons  for  every  answer  you  give   • Both  sides  are  buying  and  selling   • Focus  on  the  partner  pain  points  and  value   • Write  down  next  steps  and  be  Fmely   • Leave  lawyers  and  NDAs  for  last   ©  Copyright  2012  -­‐  FireMa4er  LLC
  32. 32. Do  we  have  a  deal? Partners Activities Value Proposition Customer Relations Customer Segments $$$ Resources Cost Structure Channels Revenue Streams Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010 ©  Copyright  2013  -­‐  FireMa4er  LLC
  33. 33. Thank  You Ma4eo  Fabiano mf@firema4er.com ©  Copyright  2012  -­‐  FireMa4er  LLC
  34. 34. Bonus Top  10  mistakes ©  Copyright  2012  -­‐  FireMa4er  LLC
  35. 35. 1. Having  an  unclear  partnership  model   2. Having  an  unclear  partner  value  prop   3. Spray  and  Pray  i.e.  not  being  focused   4. Partner  with  other  startups  i.e.  risk^2   5. Not  having  a  formal  “pipeline”  process ©  Copyright  2012  -­‐  FireMa4er  LLC
  36. 36. 6. Thinking  biz  dev  is  a  part-­‐Fme  job     7. OveresFmate  your  board  “contacts”   8. Ignoring  working  capital  i.e.  cash   9. Not  being  operaFonally  deal-­‐ready   10.  ...Not  following  up! ©  Copyright  2012  -­‐  FireMa4er  LLC

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