How do you generate revenues? By selling to customers! How do you get customers? By making them aware of their needs and the solutions you provide to fulfill those needs.
Welcome to sales, marketing, and business development (“biz dev” for short). We could probably get a day-long lecture on the nuances and subtleties of these three terms from a marketing/biz dev guru, but for a second let’s assume that all three activities focus on generating revenues. The time frame when revenue generation actually occurs may differ, but the ultimate long-term result will be the same in all three cases.
At Avicena, biz dev happened in short and infrequent episodes with limited follow-up tied in with the amount of time I had left over with everything else happening at the fi rm. Our very first biz dev activity happened when I took the time to meet with the recently retired head of a big five accounting and consulting firm in April 2000 in New York, just before graduation. The leads that
came out of that meeting translated into our first angel investor offer as well as the initial informal indication from the big five firm to represent us as our accountants. Then nothing for four months as I went under with technology, hiring, operational, and content commitments. In August and September, I took the time to meet 40 potential customers in Tampa, New York, Boston, and Washington D.C. to gauge interest in our product as well as test possible pricing ranges before launch. Four very strong leads came out from this trip but I disappeared again for two months and didn’t follow through. In October 2000, we did the formal launch at an industry exhibition, received an acceptable response, did a lukewarm follow up, and then went blank again. In January and February 2001, I did a whirlwind tour of Tokyo, Dubai, Karachi, and then Dubai again, meeting clients and investors. Th is tour was followed by two dedicated months of high-intensity business development legwork focusing on strategic investors and relationship partners. By the time the legwork started yielding results, we had shut down.
Somewhere in between, in a moment of temporary insanity, I also decided to hire two additional high-end biz dev resources so that my moments of blanking out could be rectified and we could recover some of the leads that we had lost by my inconsistent follow-up. Toward the very end, I realized that a biz dev resource is not a fire-and-forget missile. You can’t hire them and leave them on their own. They work best in wire-guided mode when you direct and track the focus of their queries and evaluate their performance based on customer feedback and bottom-line improvement. Without the direction or the performance measurement, you might as well burn the cash you are paying them. The missing months it took us to finally accept this fact and take corrective action put a sizable dent in the incubator’s limited resources.
Moral of the story:
Do biz dev as soon as possible, do technology as late as possible, and, given a choice, never relinquish control of biz dev and cash generating activities without an objective and consistent performance evaluation mechanism.