Recently I wrote a post about Alex Hawkinson, founder of SmartThings, where I quoted him as saying “I was worried I would put my shingle out and no one would show up.” A common worry for any entrepreneur is that “no one will show up” when he or she takes the big risk and goes out to start a business.
For most founders, that lovely shortened title “Biz Dev”, business development, doesn’t yet exist. They are their own business development team, leveraging their friends, family, former coworkers, gym buddies – anyone and everyone to make those first few sales that turn a company from an idea into a business. This is why VCs are evolving into “accelerators”, and startups are often more interested in a potential investors connections than their bank account.
But when the founders begin to get busier, or find they need to focus more on the core product, or “the big picture”, sales begins to be delegated out to smiley, polished, attractive talkers, with resumes reading like a New York socialite: interned at Fortune 500 company, B.A. in Liberal Arts, people skills, raised $XX, worked on Senator So-And-So’s campaign. These charming people are cheerfully willing to do a job no one else wants to do, to look rejection dead in the face and to push-push-push!
When Biz Dev People Expire
Lean Startup teacher Steve Blank has an interesting take on these people. He talks about new ventures hiring VPs of sales on high promises, only to fire them a few months later when the sales weren’t coming in. Joking about common conversations between aggressive CEO/Founders and their freshly minted VP of Sales, he said they would ask what’s going on? The VP of Sales would answer ‘We have this and this in the pipeline’. The answer was always in the pipeline, until the CEO/founder decided they “needed to pivot. The way we used to pivot in the old days was firing executives.”
Then Where Do We Get Sales?
I’m not going so far as to imply all VP of sales/business development people are full of hot air. There are some amazing go getters out there – I woefully turned down an opportunity to work for one DC VP of Sales who I will say is probably one of the most connected people in the U.S. But I am suggesting businesses need to reassess what qualities they are looking for in hiring for this high salaried position.
One interesting alternative to sales comes from Salesforce founder, Marc Benioff. On his blog he writes, “We did not have a formal sales organization at this time so in our quest for early customers, everyone on the salesforce.com team was encouraged to contact anyone he or she knew in any industry, or at any start-up.” This approach taps on the network of every employee, creating an interesting ownership for employees with the revenue being generated, as well leveraging the company’s reach.
While Marc’s view is everyone is “sales”, Seth Godin’s boldly claims in “Rework” that “Marketing is Not a Department”. As the manager of a marketing department, I’m not going to pretend that didn’t throw me off, but in practice I see his point. In a software company the customer service team is “marketing” when they resolve customer issues. In a service company the consultants are creating relationships and taking advantage of opportunities to “upsell”, adding on products or services based on needs they identify.
So Are Bus Dev Execs Obsolete?
The answer to that question is no. While it’s important to train your customer service team to be able to create sustainable relationships and inform about additional benefits and services, as well as leverage all your employee networks, having someone devoted to the constant work of prospecting and “closing” new deals is still essential to building bigger, better companies.
Mostly, in hiring business development execs I would urge businesses to be careful. Think about clear objectives for the new person, what will make you “happy”? Try to understand the needs for the position, maybe even working it for yourself, before you hire someone into it. This is something that worked well for many founders – even if they weren’t the most qualified in a position, at least by trying the work themselves, they understood the challenges and skill set the position would require.
For more insights and help with getting your own business launched, visit me at Onertia.com. Onertia is a marketing and business strategy consulting practice for early venture companies.