How is business development different from sales?
I often hear (sometimes perhaps intended pejoratively), that “business development is sales without a quota”. And in fact, there is much truth to that statement for the following valid reasons:
- Business development is about creating long-term relationships. Whereas most sales activities are focused around current month/quarter or perhaps year, business development has a multi-year horizon. Your business development leader requires lots of patience to deliver results, which means that as a founder, you should not hire a business development professional whose track record and ability to deliver you don’t fully trust. The worst thing you can do to your business development team is try to micromanage them, which tends to create risk aversion and shorter term mindset.
- Business development focuses on growing the pie for all the parties involved. Best way to negotiate a partnership is to create alignment on how the parties can achieve incredible results for customers by collaborating. Only then can the division of the pie be even discussed. So, financial terms should usually take the back seat to user experience, product and marketing considerations. This is obviously very different from a sales pitch that many times can be summarized as “Listen, have I got a special deal for you!”
- Business development leverages market trends and competitive dynamics. I believe investors and product management leaders often make excellent business development leaders because they have the experience to assess competitive dynamics and industry patterns to support their initiatives. Not only that, in order to build alignment across organizations for long term success, business development proposals need to be mindful of the magnitude of opportunity, resources required and the realistic timeline needed to launch and execute on a partnership.
My advice to founders is to start thinking about creating strategic market relationships early on. Many times, this means that one of the founders will have to wear the business development hat for some time. Try it for size, and you may actually enjoy it as much as I do!