I was at brunch this past weekend, celebrating my wife’s grandfather’s 88th birthday (side note: This man is amazing and truly an inspiration. Each and everyday including weekends, he gets up and goes to work, same schedule, same routine for over 70 years, non stop…doing something that you love…that’s a role model).
Anyway, after the brunch was wrapping up, the waitress who had provided amazing service the entire time stopped and asked, so what do you do? I promptly told her that I worked in business development…and then it happened (as it almost always does), the blank look of confusion appeared on her face and instead of asking follow up questions for clarity, she just nodded her head and kept it moving because it sounded important enough and she was only making small conversation.
However, this has happened countless times, especially if I am talking with people outside the traditional corporate world. Unlike other professions, like doctors, lawyers, engineers, and real estate agents, Business Development is one of those professions shrouded in mystery…not because Biz Dev is so secretive that I would have to kill you if I told you what I do (like my friend who works as a secret agent at the CIA…hi Tony j/k), the real answer is that Business Development is one of those catch all phrases that really means nothing, but is used for everything. More importantly, Business Development means completely different things based on the organization and also the stage of company. Business Development at a corporation is completely different than biz dev at a startup…let’s dig deeper.
Corporation Business Development = Nomad
Disclaimer – the role is different from company to company (which is why it’s so confusing), but this is a basic generalization
A Business Development professional at a corporation is like a nomad. Most corporations are set up where teams own specific products or services (P&L). This is like owning land, where you are responsible for maintaining it and growing the food on the land every year…if you have a bad crop year, it will be reflected in earnings and someone might not make it to the next year, but if you have a good crop year, everyone is happy, money is flowing and people organize over the top boondoggles (for real…real word). But the Business Development team doesn’t own land, they are the people in the organization that are always in search of new opportunities (land), searching for new locations to plant the corporate flag. For someone who has a low attention span, gets bored easily and constantly needs to be challenged in order to get out of bed every morning, this role is perfect. Being the explorer of a new frontiers can be exciting, but at the same time you never have a home…constantly in search for new land.
These individuals are often tasked with being open to new ideas and spending time learning about the new opportunities in the market. These are the people you see at conferences scoping out new technologies; giving away business cards like trees don’t matter and getting back to you four weeks after you send the intro email (don’t take it personal). From a start up perspective, the Business Development team is the best entry point into a corporation unless you know someone SUPER senior or you know your product / service can immediately help the core business (even if that’s the case you might be routed back to the Business Development Team as a point of protocol). Most of the time, they will give you a look, but know the buck does NOT stop there…they will eventually have to sell the new idea internally to the core business, because once again they do not own land.
Startup Biz Dev = Traveling Sales Man
Here is where it gets tricky; the Biz Dev team at a startup is essentially the first sales team. Compared to the Business Development team at a corporation, the startup Biz Dev team has a totally different corporate focus and most importantly incentive structure. The startup is (or should be) 100% focused on finding a sustainable business model and selling to new customers. So the Biz Dev team is essentially responsible for selling the products from the land and because startups don’t have a lot of land, the Biz Dev team is super focused on selling and selling fast. Scouting for new land and flag placement is less relevant to a startup because you have to take care of home first.
In terms of incentive structure, the Corporate Business Development team does not really have a P in front of the L for P&L (profit and loss). They are not tasked with bringing in cash, but bringing in new ideas that can potentially turn into cash. However, the startup Biz Dev team is all about the P. So if they do not bring in cash, the startup will falter and there is a good chance they will lose the land they were trying to secure. So Corporate Business Development is incented to bring in ideas, where Startup Biz Dev is incented to bring in cash.
Corporate Business Development + Startup Biz Dev = Search for Success
Here is the interesting paradox…although they have two totally different roles, they are both called Business Development because they must work together in order to be successful. Corporations are always in constant search of the next multi million dollar idea. Startups are in constant search of a sustainable business model or next big client. This is where the Corporate Business Development Team and the Startup Biz Dev Team intersect….they are both in search of new business.
In order for corporations to continue to exist and maintain relevance in this constantly evolving ecosystem of business, they must find new opportunities (land) to grow their business and innovate…quickly (exhibit A: Kodak)
Similarly, in order for startups to prove business model (funding ≠ proven business model), they must find new customers that are willing to buy their product. Both are in constant search for something new…new opportunities or new customers.
So, I guess the next time someone asks what I do, I will proudly respond, I do Business Development, the process of searching for something new.