Great business development (BD) people are hard to find. You may meet a smart, charismatic, articulate BD person who can’t get anything done. Or a highly networked deal person who leaks value when he misses all the details of a deal and structures terrible terms. It can be hard to differentiate between what deals people actually accomplish versus what they take credit for in terms of a product’s success.
So what should you look for in a BD person?
Smart people with lots of raw horsepower. Smart, creative, and think well on their feet.
Articulate/good communicators. Need to communicate well with both internal teams (engineers, PMs, lawyers, execs) as well as the customer or partner (which may include their legal, engineering, and deal people).
Creative/fearless in deal terms. Push the envelope on what is possible and are willing to make a crazy ask of the partner or client. You never know what someone will give away until you ask.
Able to get shit done. Have a history of closing multiple complex deals with creative or aggressive terms. One person who worked for me at Twitter closed three or four partnerships while he was a part-time intern working remotely during his school year.
Structured/can run a deal process. Structure is underrated in deal people. You want someone great at shepherding all internal and external stakeholders through the various phases of a deal (ideation, pitching, negotiating, structuring, closing, implementing).1You want these people mining a list of prospects, aggressively framing a negotiation, and setting up internal prep meetings before calling external parties. Unstructured deal people create churn internally due to a lack of consensus on external gives or lack of planning for a negotiation.
Detail-oriented. Reid Hoffman once told me he expected his deal people to read every word of every contract, including all the legal language. This allows them to catch all sorts of gotchas that are otherwise buried in unexpected ways and to think through the implications of what the contract says.
Part lawyer. Able to pick up and grok key legal nuances, even without an overt legal background.
Good culture fit/put the company first. You want your businesspeople, like all your employees, to put the company first. There are all sorts of ways businesspeople may benefit themselves rather than the company (more on this below).
Able to work well with others across the organization.
Pragmatic and keep big picture in mind. Figure out what is important, optimize for it (80:20 rule), and get the deal done. Don’t optimize for little things that don’t matter, except as a negotiation tactic. Similarly, some deals should not get done. Great deal people will take a step back and decide whether to walk away, and they won’t try to force a deal to happen if it shouldn’t. Some of the best “deals” are the ones that don’t happen.
Able to understand partner and market needs. Understand what partners really want (versus what they claim they want), as well as trends in the marketplace that may impact both their company’s and as well as the partner’s leverage and needs.
Tenacious. Deals can take a long time and a lot of back and forth. Bad deal people give up toward the very end to “just close the deal” and may leak enormous amounts of value that they didn’t need to give up.
Relentless. Sometimes you need to keep knocking at a door over and over until someone finally answers.
Moral compass. Like all employees, you want people who will do the right thing even if it uncomfortable or against their self-interest to do so.
Bad business development people may exhibit the following:
Great at selling, bad on follow-through. Some BD people are charming, fun to talk to, and really smart. Unfortunately, they have terrible follow-through and can’t seem to get anything closed. They may be full of empty excuses for why they had to give on a major term that is important to your company. The only way to screen these people out is reference checks, as they are great at selling, poor on substance. Raw charisma is drastically overrated by technical founders. Don’t be fooled just because someone is friendly and charming.
Disorganized/unstructured. Fly by the seat of their pants, don’t send follow-ups, or communicate poorly internally. Needless meetings or internal churn often result.
Leak value. Often overthink what is “fair” for the other side. Make too many assumptions about what is important to the other side and just give a lot of terms away. Or, they just want to close the deal at all costs versus thinking through what is actually good for the company they work for.
Don’t think like an owner. Bad deal people don’t think like business owners. They treat the company’s money or resources as not a big deal to use and will give away extra value in a negotiation because “it doesn’t matter,” “it’s within 20%,” or the like.
Don’t think the details matter. See above.
Outsource too much. Bad deal people become too dependent on other company functions—for example, not understanding a legal term that comes up over and over because “that’s Legal’s problem.” Sometimes terms important to the business are buried or hidden as legalese or “technical specs.” A great deal person will ferret these out.
Optimize for themselves and their network versus the company. As gatekeepers to external parties, some business development people may use this point of leverage to benefit themselves. They may build relationships at the expense of the company by being too easy on a deal so that the partner likes them. Or they may constantly network at external boondoggles and on panels to build their own reputations, rather than working. 2
Display a cowboy mentality. Some deal people go off and strike a deal, or mention terms to an external party that you can’t back away from, without any internal discussion or approval. They may act defensive when questioned about this and feel they are “getting it done.”
Are emotional. Deals have a lot of ups and downs—you need an even keel.
Spin things internally. Deal people need to be able to “turn it off” when it comes to selling something internally to their boss, peers, or executive team. You need to hire people who won’t BS or spin internally, even if it is sometimes their job to do it externally.
History of deals. What deals have they themselves negotiated? How complex were the terms? What is an ask they received that no one else at the company believed they would get? What is a clever deal hack they pulled off? What impact did the deal actually have on the company?
References. Deal people often have lots of friends, as their job is outwardly focused and they can be charismatic. They may give you a long list of meaningless references (e.g., friends at their current company, who actually don’t know much about their work but think they are a “great person”). Get references from people who worked with them directly on deals. Back channel more information on them. Ask about the specific deals they worked on, how relentless and creative they were, and the tangible impact their deals had on the company. Did the terms end up working out or backfiring? Were there edge cases they did not think about that came back to bite? Did they champion a radical position that paid off big?
Follow-through. How is their follow-through during the interview process? How structured are they? What approach do they take in negotiating compensation?
Culture. What are they optimizing for? Title? Equity? Future growth? Something else? How do they fit in your culture? Businesspeople will be different from technical or product people in a number of ways, but they should still hold to your core cultural values.
Don’t expect the people who are great at thinking of and executing deals to be great partner managers (post-deal management). You will eventually need to find both types of people for your team. 3
- Thanks for Marc Leibowitz for spelling out the various deal-making stages, as well as other ideas.
- Some external speaking or networking events may be useful to your company. But the businessperson should choose the small handful of events that really matter, and have specific goals for them, rather than just claiming “all exposure is good exposure.”
- Thanks to Marc Leibowitz, Clara Shih, and Kim Malone Scott for feedback, ideas, and comments on versions of this chapter. Read the original post at eladgil.com. [http://blog.eladgil.com/2013/02/hiring-great-business-people-is-hard.html]