At a nascent stage, for early-stage startups Business development and the strategies around it involve targeting Customer segment, expand locally or globally and leverage networks and relationships pertinent to the Startup.
What is Business Development?
From a bird’s eye, Business Development is all about the ways that you are driving value for your customer, segment that you’re targeting, the value proposition has for that segment and the sequence in which you are going to tackle those segments based on the product-market fit.
There is a general misconception around Business Development, Marketing and sales among startups, especially at an early stage. The founder needs to understand that while Business development is a process around Customer segmentation, Marketing is about getting customers to understand what’s the solution and what you’re trying to sell. It is about creating a Brand value proposition to get recognized for the solution/product. And sales is more of a tactic for Identifying channels for customers to buy the product along with Pricing, Discounting etc.in the backend of the process.
“At early stage, the Founder and the team combine these elements (Biz dev, Marketing and Sales) without scale or metrics in a conjoint fashion”
Business Dev is the bigger picture, Marketing is a strategy and Sales is low-level execution.
Process of devising the strategies
Startups must indulge in a line of questioning while forming strategies for instance at Ideation stage – the questions to focus on are “What is the actual problem I’m trying to solve and whom am I solving it for? Here the approach is to carry out Market research and gain from personal experience to validate.
At a mature stage where startups have validated the product-market fit, the approach shifts to leverage market data, insights from marketing and finding segments with similar problem statements. One strong and full-proof strategy at this point is to look at partnerships and networks to grow the scale.
Proven strategies for
Early revenue stage:
- Explore your personal network – work through incubators or accelerators and Validate your idea
- Tactics – Find people with a sound understanding of the problem area
- Gather insights from your existing customers
- Understand the gap between offered value and perceived value by the customers
- Focus on the more detailed segment to put marketing efforts for lead generation
- Leverage the data to your advantage
- Observe and understand the competition and their positioning
- Have enough metrics to measure across different functions – detailed metrics around value generation
From Market strategy to Business development
When it comes to business development, startups could majorly zoom in on Customer, Markets and Relationships for market validation to fine-tune Value Proposition to develop a sound Go-To-Market with a niche segment to start with. As the Startup moves to further stages, differentiating on cost or product or overall to Position is a sure shot approach.
Channels and Partners in Biz Dev at different stages:
“Partnerships become critical to helping drive value as you grow; you don’t have to run alone and knock on every door”
At Early stage, Online channels are an absolute path to lay the foundation for creating awareness among the customers. Partnerships, Omni channels and build physical presence play a crucial role in later stages as you. Figure out channels that have complimentary value offering.
The first set of “ideal hires” for Business development
- Either a member of your founding team or somebody who comes after the first customer acquisition to aid your biz dev. Leverage your advisory network – Mentors, investors for this before hiring.
- Somebody who is data-driven and could bring in a good blend of data and analytical insights to establish a repeatable and scalable process.
Watch the complete interview for more quirks! Know more about how a Growth stage startup differs from an Early-stage startup here
Keep watching this space for more under Fire Up Series.
Stay safe and sound!
– Sunita Kumari, Team CIE