What Startups Need to Know About Business Development vs. Sales
During the Ynext™ Incubator boot camp, I gave a presentation on Strategic Partnerships. After working with startups for a number of years, I find that many entrepreneurs think that business development and sales are two different terms for the same job. However, there are key differences. Understanding these differences is essential for a startup to be successful.
First, understand that there’s a difference between sales and business development. A lot of people in startups don’t like to say “sales,” so they call themselves business development, but most of what they’re doing is customer acquisition. It’s still sales.
In sales, your goal is to acquire customers. It’s like fishing. Catch the fish, bring it into the boat, and start fishing again. In business development, it’s about exponential revenue growth and building partnerships. Can you leverage someone’s bigger boat to catch more fish? Can you gain access to larger lakes with even more fish? Are you working with the right fishing buddies?
Second, sales and business development professionals have different skill sets. The typical salesperson has as an outgoing personality and is a relationship builder. They’re stellar networkers, opportunity seekers, and are tenacious. They love a clear path to victory.
Business development people also build relationships, but they’re more suited to strategic thinking. They know how to create compelling value propositions and realize that it takes time to build long-term mutually beneficial relationships.
Third, sales is short-term, business development focuses on the long game. They’re thinking about where the company is going over the next several years. They’re working on ideas to show partners that they’re ready to work together. For example, they realize that they need to bring partners into customer deals, losing some short-term revenue to incentivize the partner to work with them in the future.
Finally, business development people are responsible for tech alliances where products need to work together, but no direct revenue opportunity may be created. There are long-term benefits from the “networking effect” by making someone else’s product work better and easier with your product, like the way Yodlee® Interactive works with many fintech customers. Business development professionals are looking for partners that contribute to the company’s ultimate ecosystem.
Meanwhile, salespeople look for immediate clients and users, which bring in revenue and keep the company running. They’re out hustling, taking meetings, and spending hours on the phone each day. They may not be involved with long-term solutions, but without them, there’s no short-term either.
Ultimately, business development and sales are two sides of the same coin. They work towards the same ultimate goal — revenue growth — for their company. But one can’t properly function without the other. Both roles are essential and a unified strategy will help startups acquire new customers, expand partnerships, and achieve growth.
If you’re an entrepreneur looking to drive sales growth or acquire funding, our team at Eisbach Group can help to identify strategic partners, cultivate business ecosystem relationships, and navigate through the funding process.
To learn more about Ynext Incubator – a 6 month program for developers, innovators, and entrepreneurs – visit the Ynext Incubator website or follow @YnextIncubator on Twitter.