One Mistake that Can Crush (BD) Pipeline Dreams

by Scott - 4 Comments

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Prior to SinglePlatform, one of my biggest business development mistakes was failing to include a measure within my hitlist that allowed me to prioritize opportunities.


For those foreign to the concept, a hitlist (or pipeline) comprises of all of the companies that you could potentially partner with, sell to etc. It’s essentially a list of targets.

Inevitably there are going to be some target deals that move the needle for your company more than others. Doing a deal with Google, will probably make your company more valuable than doing a deal with a startup that may not be around in a year. Thus, as you build out your hitlist it’s important to be able to quantify how much value opportunities might drive so that you calibrate your time and effort appropriately. Let’s call this measure the SOP (size of opportunity) and be clear that every hitlist should include a SOP column or measure.



What your SOP measure comprises of depends on your strategic goals.

For an integration partnership (API), a SOP might be the amount of unique visitors prospective partners receive. This metric gauges the audiences you might reach by integrating.

For a cross-promotional partnership (i.e. email list swap), a SOP might be the amount of users a target has or the size of their email list – again, guaging the potential audience you might reach through a deal.

For an enterprise sale, the SOP might be a unit that quantifies a revenue opportuntiy. If I was selling a POS solution to a big box retailer, my SOP would be the number of brick & mortar locations that a retailer has assuming every one was elibilgle for my solution. If I was selling an enterprise HR solution (i.e. linkedin), my SOP might be the number of employees in their HR department.

Without having a clear picture of the SOP, we tend to spend more time on smaller, less meaningful opportunities because the deal cycle (and subsequent win) happens faster  providing the dopamine hit that all sales or BD professionals love. I’m definitely guilty of this. In reality, if doing a deal with company X, is going to drive 10x the value of company Y, I can justify spending 9.9x more time on the deal with company X than Y. When you fail to include a SOP metric (or scale) to value opportunties, it can be challenging to maintain a disciplined, efficient methodology.

The SOP is also a guide for the sequence of your pipeline approach. When I’m first getting started, maybe I’m not ready for a meeting with a target that has the greatest SOP. I personally like to make sure I have my pitch air-tight and the optics provided by other partners/commitments before hunting the great white elephant…but when I do feel my shirt tail ruffle from the wind at my back, I’m swinging for the fences.

Using a “SOP” makes it easy for us to work smart instead of just hard…and the most successful people always make it easy to do the right thing.

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If you’re interested in BD, I recently read a post called A co-founder’s guide to Biz Dev written by Ian Hogarth from Songkick. It’s spot on and suggest you check it out.

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4 comments, add to the conversation.

  1. jcap49

    1. Songkick guys are legendary & Ian’s post was great. Good call on sharing :)

    2. Thoughts on doing a quick post on the different types of BD deals? You talk about integration, enterprise, cross-promotional – might be good for folks who would like to hone in on a specific type or those in general who are a bit less knowledgeable about the different spaces.

    As always – great read & cheery pictures!

    Reply

  2. cdclark33

    Awesome, Scott. In terms of prioritization aside from SOP, I also think about, esp for product integrations, the quality of the product (which is hard to nail down, which I do subjectively after experiencing the demo build or past products and the product manager’s thinking), the likelihood of it closing (i.e. personal connections, where in lifecycle it is), and how much work we need to do.

    For example, if we have that tiny startup with small SOP but we have an awesome product and the CEO is the brother of our CFO, and it requires little effort or time, then that would be higher priority than Google if it had low likelihood of closing and it would require a ton of engineering time and resources.

    Reply

    1. ScottBritton

      Definitely agree. High quality products that might not have as much traction are important because 1) they might emerge someday 2) can be beautiful integrations you can point to / have more control over the integration as the 3rd party.

      Reply

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