I had an interaction with a first-time founder that reminded me how hard it is to learn the art of doing business development in startups. As opposed to life in a big company where you might get a positive response just by virtue of your employer’s name, you no longer have a big stick to swing. You are a no-name. You now represent a potentially risky alliance to anyone you call. You are a subject of curiosity at best, and suspicion at worst. So you have to advance by virtue of:
- Superior product and willingness to go the extra mile
- Your network and ability to manage relationships
I call it a game of simultaneous short and long ball. In a startup you’re under tremendous pressure to get deals and partnerships done (AKA bright shiny objects. They matter. A lot.) So a good game of short ball is essential. But your ultimate success depends on creating the best possible partnerships that will really pay off and yield solid relationships with wide influence–long ball.
I’ll tell you about a real life CEO-fail on on the playing field. He whiffed and it was a shame as it cost him a potential game-changing introduction.
Without naming names (as I’d like to see this guy salvage the situation) here was the sequence of events and my scorecard on each interaction:
- Introduction. A person I’d like to partner with made the introduction, urging me to reach out. Of course I did, because I want the connector to see my own creativity and responsiveness. So far so good. I like the way we are meeting.
- First contact. I wrote a quick email and got an enthusiastic response from the startup CEO. I watch these interactions carefully. Can the person write? Does he “get it?” It’s harsh, but our resources are precious and I can’t waste them on a B player. Grade: A
- First phone call. It took too long to schedule but we both cancelled once, so that was not his fault. I did not like that I had to chase him down to reschedule. When we finally talked he kept his cards close to his vest but he was enthusiastic about working together. Grade: B, for him. He did not prepare for the call with any ideas of his own, but his attitude was great. Grade D for me, for reasons outlined below–I gave him an inch and he later tried to take a mile.
- Next phone call. I introduced him to our VP of Business Development. He grilled her relentlessly and then proposed a ridiculous one-way street partnership. She was firm and positive but he gave her no chance to articulate her ideas. She was deterred, but not dismissive or even all that annoyed. I was mad at myself for forgetting how someone in his shoes (in a hot area, getting a lot of press) sometimes does not “get” the game of long ball. We form five new partnerships a week at Grommet and we have near-flawless pattern recognition for the CEO’s who mistake a flurry of press for indicators that things will always be so easy. (This other CEO has taken nine months to do the same number of partnerships we do in a week–he is still coming up the learning curve.) I should have played my own cards closer to the vest to see what he was really made of. Grade: C for both of us, but A for my VP. It’s OK that he was brusque–he does not have to be our friend. But his proposal was insulting. I liked my VP’s equanimity and determination to respond creatively.
- Next email. The above are just rookie mistakes-correctable. (And I played a contributing role in the negative outcome.) But the next move was nearly unforgiveable. The same day as the ridiculous phone call with our Biz Dev VP, he wrote me telling me what a great call he and she had had and asked for an introduction to one of my most valuable investor contacts. This is where he mixed up short ball (get a deal done) with long ball (build a relationship). I rarely get very angry at other entrepreneurs. I understand the stress and pressure and give them a long rope, just like I’d hope they give me. But this move was nearly fatal. Grade: F.
- My next email, then his. I wrote back suggesting we collaborate and assess a partnership before I could credibly make that precious introduction. I offered a meeting with one of my other investors, because he is travelling to the same city where this entrepreneur lives. I thought this was a creative way to break an impasse and give this young CEO a chance to shine in person. His response? He turned down the investor meeting and said he would find someone else to introduce him to my high-profile investor. Huh? Grade: Can I grade lower than F? And in writing this I wonder why I was being so generous in the first place!
- My next email. I wrote back saying, no problem, I’m not in a rush but too bad that I am the person my investor would rely on for an assessment of his business (so good luck finding another route!). His response: Crickets. Grade: It’s up to him.
Epilogue…TBD. I still admire his work and he can redeem himself if he responds contritely and creatively. But I share this story because business development is so hard to do well. Through HBS, Tech Stars, Founder-Mentors, and all the universities in Boston I find myself mentoring young founders very frequently. I hope this founder finds a good sherpa of his own. He’s smart and resourceful and can be a great success. And he gave me a fantastic “Don’t try this at home” example to share.
So I am.