1. Biz Dev for Startups
Developing a network of partners by
defining your Business Model

2. Business Plan

3. Biz Plan ≠ Biz Model
• Business plan is a story
• How the business will evolve in the future i.e.
science fiction
• Business model is a snapshot
• A diagram of the business engine i.e. inputs,
outputs and components
• It is not just “how you make money”...

4. • Viable (= repeatable) business model...
• Shows HOW business results are achieved
• Shows WHY company needs money
• Shows WHERE to put it to work
• Show WHO to partner with...

5. Biz Model Biz Dev

6. Biz Model Framework
Partners Activities Value Customer Customer
Proposition Relations Segments
Resources Channels
Cost Structure Revenue Streams
Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010

7. Biz Model Biz Dev
Partners Activities Value Customer Customer
Proposition Relations Segments
Resources Channels
Cost Structure Revenue Streams
Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010

8. Example: Twitter
Partners Activities Value Customer Customer
- Search Engines - Service Mgmt Proposition Relations Segments
- Mobile Ops - Policy - Users: free, easy, fast way - Customer - Users
- App Devs enforcement to disseminate & find support - Brand
- Socnet Devs - Marketing information/content - Analytics Advertisers
- Analytics Devs - Sales - Advertisers/Brands: easy, - SMEs/Local
fast way to engage directly - Celebrities
& communicate with
consumers
Resources Channels
- Partners: distribution &
- Userbase - Search engine
incremental user base/
- IT resources - Web/widgets
traffic to monetize
- Public APIs - Mobile
- Private APIs - Apps
Cost Structure Revenue Streams
- Infrastructure - Promoted Tweets/Trends (Cost-per-Engagement)
- Staff (dev, support, sales) - Promoted Accounts (Cost-per-Follow)
- Paid API feeds (“Fire hose”)
Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010

9. Example: Twitter
Partners Activities Value Customer Customer
- Search Engines - Service Mgmt Proposition Relations Segments
- Mobile Ops - Policy - Users: free, easy, fast way - Customer - Users
- App Devs enforcement to disseminate & find support - Brand
- Socnet Devs - Marketing information/content - Analytics Advertisers
- Analytics Devs - Sales - Advertisers/Brands: easy, - SMEs/Local
fast way to engage directly - Celebrities
& communicate with
consumers
Resources Channels
- Partners: distribution &
- Userbase - Search engine
incremental user base/
- IT resources - Web/widgets
traffic to monetize
- Public APIs - Mobile
- Private APIs - Apps
Cost Structure Revenue Streams
- Infrastructure - Promoted Tweets/Trends (Cost-per-Engagement)
- Staff (dev, support, sales) - Promoted Accounts (Cost-per-Follow)
- Paid API feeds (“Fire hose”)
Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010

10. Example: Twitter
• User value prop + Partner value prop
• Clear, relatively simple partnership model
• Revenue-, metrics-driven
• “Last year, Google paid $15 million to access
the Firehose, Microsoft $10 million, and Yahoo
joined later with a cash and revenue-share
deal.” - ATD/Wall Street Journal

11. Biz Dev Execution

12. Execution Steps
1. Define the partnership model
2. Clarify partner value prop
3. Select target partners
4. Engage the pipeline
5. Seal the deal

13. 1. What is your model?
Partners Activities Value Customer Customer
Proposition Relations Segments
Resources Channels
Cost Structure Revenue Streams
Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010

14. Models Partners
• Marketplace (commission) Merchants
• Advertising (rev share) Publishers
• Infomediary (subscription) Data Vendors
• Merchant (margin) Manufacturers
• Manufacturer (sales) Distributors

15. Models Partners
• Affiliate (commission) Merchants
• Licensor (royalties) Manufacturers
• Subscription (fees) Content creators
• Utility (metering) Integrators
• Community (donations) Contributors

16. 2. Which value prop?
Partners Activities Value Customer Customer
Proposition Relations Segments
Resources Channels
Cost Structure Revenue Streams
Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010

17. Tools
• Value Chain analysis
• Where are you capturing/creating value?
• How much value?
• Which portion of the value can be shared with
partners?

18. Tools
Adapted from Simply Market Report, 2010

19. Tools
• Customer Acquisition Cost analysis
• How much does it cost to acquire a customer?
• Does the partnership increase or decrease it?
• What volume targets must be met so that it
makes sense?

20. Tools
Adapted from Evernote, 2010

21. Tools
• Customer Lifetime Value analysis
• How much is each customer worth?
• What are the most attractive segments
• What are the best channels long-term?
• Does the partnership increase CLTV?

22. Tools
Distributor Direct
Customer Customer
Adapted from Occam's Razor, 2010

23. 3. Which partners?
Partners Activities Value Customer Customer
Proposition Relations Segments
Resources Channels
Cost Structure Revenue Streams
Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010

24. Be deliberate & focused
• List of top 25 target partners (as per model)
• Score them by criteria (1 to 5)
1. $ value of deal to them! (50%)
2. $ value of deal to you (30%)
3. Speed/ease to close (10%)
4. M&A option value (10%)
• Degree-of-separation is not a good criteria

25. The “Standard Deal”
• Simple to design, understand and deploy
• One-page term sheet, simple excel sheet
• Working capital positive or neutral
• Do you need to finance your partners?
• ~0 custom development (90% built-in)
• Have you thought about product features?
• What about support?

26. The “Standard Deal”
• Everybody understands...
• Licensing agreement
• Reselling agreement
• Revenue Share agreement
• White label agreement
• Distribution agreement
• ...

27. 4. How do you engage?
Adapted from Real Pro Systems, 2010

28. Partner Marketing
• Developing marketing content for biz dev
• Biz dev presentation (≠ investor presentation)
• Partner case study
• Partner financial model
• Technical training material
• Speaking/attending industry events
• Engaging industry analysts

29. Build a pipeline
• Create a lead generation program
• Partner-focused content > web leads
• Events > live leads
• Analysts > referral leads
• Put a $ value on each opportunity
• Treat partner prospects as sales prospects
• Convert & nurture opportunities

30. Tips for healthy pipeline
• Do
• Enroll your board for intros to your list
• Go for #1 in your list first
• Know when to cut your losses
• Don’t
• Chase brands for brands’ sake
• Work only with large companies

31. 5. Do we have a deal?
Partners Activities Value Customer Customer
Proposition Relations Segments
$$$
Resources Channels
Cost Structure Revenue Streams
Adapted from the Business Model Canvas by Alex Osterwalder et al., 2010

32. "Tutto il mondo è paese”
• Trust
• “Warm” intro, 2 degrees
• Your board, their board, investor, other
partners, time-tested relationships...
• Make it easy to help you
• Meet in person

33. At the table...
• Ask 5 questions for every answer you give
• Both sides are buying and selling
• Focus on the partner pain points and value
• Write down next steps and be timely
• Leave lawyers and NDAs for last

34. A “funny” accent
• Unfamiliar corporate/legal structures
• Unfamiliar market references
• Pre-conceived industry associations
• Cultural biases do exist and are very strong
• Be consistently better than your reputation...

35. Be ready with facts...
• Do your homework, research people
• Trustworthy CEO + Team?
• Who owns the IP?
• Who backs the company?
• How long has it been in business?
• Acknowledge missing elements

36. ... and with style
• Arrive on time or early
• Play conversational tennis
• Never argue a point
• Remember that “maybe” means “no”

37. Top 10 Mistakes

38. 1. Having an unclear partnership model
2. Having an unclear partner value prop
3. Spray and Pray i.e. not being focused
4. Partner with other startups i.e. risk^2
5. Not having a formal pipeline process

39. 6. Thinking biz dev is a part-time job
7. Overestimate your board “contacts”
8. Ignoring working capital i.e. cash
9. Not being operationally deal-ready

40. 10. Not following up!

41. Matteo Fabiano
mf@firematter.com