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MtB workshop 2011: Business Development for Startups
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MtB workshop 2011: Business Development for Startups

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MtB workshop 2011: Business Development for Startups MtB workshop 2011: Business Development for Startups Presentation Transcript

  • Biz Dev for Startups Developing a network of partners by defining your Business Model
  • Business Plan
  • Biz Plan ≠ Biz Model• Business plan is a story • How the business will evolve in the future i.e. science fiction• 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”...
  • • Viable (= repeatable) business model... • Shows HOW business results are achieved • Shows WHY company needs money • Shows WHERE to put it to work • Show WHO to partner with...
  • Biz Model Biz Dev
  • Biz Model FrameworkPartners Activities Value Customer Customer Proposition Relations Segments Resources ChannelsCost Structure Revenue Streams Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010
  • Biz Model Biz DevPartners Activities Value Customer Customer Proposition Relations Segments Resources ChannelsCost Structure Revenue Streams Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010
  • Example: TwitterPartners Activities Value Customer Customer- Search Engines - Service Mgmt Proposition Relations Segments- Mobile Ops - Policy - Users: free, easy, fast way - Customer - Users- App Devs enforcement to disseminate & find support - Brand- Socnet Devs - Marketing information/content - Analytics Advertisers- Analytics Devs - Sales - Advertisers/Brands: easy, - SMEs/Local fast way to engage directly - Celebrities & communicate with consumers Resources Channels - Partners: distribution & - Userbase - Search engine incremental user base/ - IT resources - Web/widgets traffic to monetize - Public APIs - Mobile - Private APIs - AppsCost Structure Revenue Streams- Infrastructure - Promoted Tweets/Trends (Cost-per-Engagement)- Staff (dev, support, sales) - Promoted Accounts (Cost-per-Follow) - Paid API feeds (“Fire hose”) Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010
  • Example: TwitterPartners Activities Value Customer Customer- Search Engines - Service Mgmt Proposition Relations Segments- Mobile Ops - Policy - Users: free, easy, fast way - Customer - Users- App Devs enforcement to disseminate & find support - Brand- Socnet Devs - Marketing information/content - Analytics Advertisers- Analytics Devs - Sales - Advertisers/Brands: easy, - SMEs/Local fast way to engage directly - Celebrities & communicate with consumers Resources Channels - Partners: distribution & - Userbase - Search engine incremental user base/ - IT resources - Web/widgets traffic to monetize - Public APIs - Mobile - Private APIs - AppsCost Structure Revenue Streams- Infrastructure - Promoted Tweets/Trends (Cost-per-Engagement)- Staff (dev, support, sales) - Promoted Accounts (Cost-per-Follow) - Paid API feeds (“Fire hose”) Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010
  • Example: Twitter• User value prop + Partner value prop• Clear, relatively simple partnership model• Revenue-, metrics-driven• “Last year, Google paid $15 million to access the Firehose, Microsoft $10 million, and Yahoo joined later with a cash and revenue-share deal.” - ATD/Wall Street Journal
  • Biz Dev Execution
  • Execution Steps1. Define the partnership model2. Clarify partner value prop3. Select target partners4. Engage the pipeline5. Seal the deal
  • 1. What is your model?Partners Activities Value Customer Customer Proposition Relations Segments Resources ChannelsCost Structure Revenue Streams Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010
  • Models Partners• Marketplace (commission) Merchants• Advertising (rev share) Publishers• Infomediary (subscription) Data Vendors• Merchant (margin) Manufacturers• Manufacturer (sales) Distributors
  • Models Partners• Affiliate (commission) Merchants• Licensor (royalties) Manufacturers• Subscription (fees) Content creators• Utility (metering) Integrators• Community (donations) Contributors
  • 2. Which value prop?Partners Activities Value Customer Customer Proposition Relations Segments Resources ChannelsCost Structure Revenue Streams Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010
  • Tools• Value Chain analysis • Where are you capturing/creating value? • How much value? • Which portion of the value can be shared with partners?
  • ToolsAdapted from Simply Market Report, 2010
  • Tools• Customer Acquisition Cost analysis • How much does it cost to acquire a customer? • Does the partnership increase or decrease it? • What volume targets must be met so that it makes sense?
  • ToolsAdapted from Evernote, 2010
  • Tools• Customer Lifetime Value analysis • How much is each customer worth? • What are the most attractive segments • What are the best channels long-term? • Does the partnership increase CLTV?
  • Tools Distributor Direct Customer CustomerAdapted from Occams Razor, 2010
  • 3. Which partners?Partners Activities Value Customer Customer Proposition Relations Segments Resources ChannelsCost Structure Revenue Streams Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010
  • Be deliberate & focused• List of top 25 target partners (as per model)• Score them by criteria (1 to 5) 1. $ value of deal to them! (50%) 2. $ value of deal to you (30%) 3. Speed/ease to close (10%) 4. M&A option value (10%)• Degree-of-separation is not a good criteria
  • The “Standard Deal”• Simple to design, understand and deploy • One-page term sheet, simple excel sheet• Working capital positive or neutral • Do you need to finance your partners?• ~0 custom development (90% built-in) • Have you thought about product features? • What about support?
  • The “Standard Deal”• Everybody understands... • Licensing agreement • Reselling agreement • Revenue Share agreement • White label agreement • Distribution agreement • ...
  • 4. How do you engage? Adapted from Real Pro Systems, 2010
  • Partner Marketing• Developing marketing content for biz dev • Biz dev presentation (≠ investor presentation) • Partner case study • Partner financial model • Technical training material• Speaking/attending industry events• Engaging industry analysts
  • Build a pipeline• Create a lead generation 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 opportunities
  • Tips for healthy pipeline• Do • Enroll your board for intros to your list • Go for #1 in your list first • Know when to cut your losses• Don’t • Chase brands for brands’ sake • Work only with large companies
  • 5. Do we have a deal?Partners Activities Value Customer Customer Proposition Relations Segments $$$ Resources ChannelsCost Structure Revenue Streams Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010
  • "Tutto il mondo è paese” • Trust • “Warm” intro, 2 degrees • Your board, their board, investor, other partners, time-tested relationships... • Make it easy to help you • Meet in person
  • At the table...• Ask 5 questions 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 timely• Leave lawyers and NDAs for last
  • A “funny” accent• Unfamiliar corporate/legal structures• Unfamiliar market references• Pre-conceived industry associations• Cultural biases do exist and are very strong• Be consistently better than your reputation...
  • Be ready with facts...• Do your homework, research people• Trustworthy CEO + Team?• Who owns the IP?• Who backs the company?• How long has it been in business?• Acknowledge missing elements
  • ... and with style• Arrive on time or early• Play conversational tennis• Never argue a point• Remember that “maybe” means “no”
  • Top 10 Mistakes
  • 1. Having an unclear partnership model2. Having an unclear partner value prop3. Spray and Pray i.e. not being focused4. Partner with other startups i.e. risk^25. Not having a formal pipeline process
  • 6. Thinking biz dev is a part-time job7. Overestimate your board “contacts”8. Ignoring working capital i.e. cash9. Not being operationally deal-ready
  • 10. Not following up!
  • Matteo Fabianomf@firematter.com