This is Part 3 of a four-part series about things you should know about the entire value chain of doing business development and partnerships at a startup company. The posts are skewed for product integrations on third-party websites. You can find Part 1 here and Part 2 here.
Before I begin discussing closing, I would recommend that no matter what I write below, the best way to learn how to really close deals is to work under someone who has done it many times and can teach you the craft. You can be a natural born pitchman/woman, but there is no such thing as a natural born closer. If you are a junior employee and have the opportunity to jump to the majors and run the show or work under a founder or a VP of BD/Partnerships to learn the fundamentals- work under the seasoned pro.
Now, here is what you need to know about closing:
Understanding Why Someone Would Want To Work With You
If you want to work with Company X, you’d better bring something to the table. I’ve written a post before about The Four Golden Rules Of Partnerships. This is really where they apply. Either you are going to make Company X money, save Company X money, grow Company X’s userbase, or improve Company X’s product. These are the only four major reasons why Company X would want to work with you.
What Are They Focused On?
After you identify what it is you offer Company X (it may be only one, two, three, or all four of the golden rules), then you need to know where the company is on their roadmap (i.e. what are they focused on?). There are three stages in business: product development, scaling, and monetization. If you want to work with Company X and your partnership would help monetization efforts, when they are just focused on product building, it probably wouldn’t be a good fit at this moment. If you can help with scaling when they are focused on making money, then you probably won’t partner.
Let’s take Tumblr as an example. Presently, Tumblr is in monetization phase. They have scaled unlike many others and are looking to monetize and turn themselves into a business. If you came to Tumblr with a user acquisition or product improvement partnership (unless the product integration made them money) they would most likely not be interested in partnering at this time.
How Much Can You Help Them?
After you have identified what you have to offer and understand where the company is in their roadmap, the next big question you need to think about is how deeply you can affect the other side. Take a company like AOL. If you want to work with AOL, and you offer a way to grow their userbase, the question is, “well, how many new users will you bring?” If that number is five users, then you definitely don’t have anything to talk about. But if that number is 50,000 new users a day then maybe that’s interesting enough for them to explore further.
Have You Done It With Anyone Else Before?
After all is said and done, the big question is, “Can you prove it?” You can talk a good talk, but all the company really cares about is if you will be able to do what you say you are capable of. If so, can you prove it with use cases or examples of other companies you have worked with to make a much stronger case.
Timing And Motivators For Partnerships
One of the major elements for product integrations is how timing is everything. Sometimes your timing may be off at first connection, but keeping in touch with the other side could lead to something in 3-6 months. One closing trick I have come to see successful a few times over I’ve dubbed the “Launch Partner Strategy.” This is best used for launching new features.
Instead of just pushing out a new feature, you try and wrap a few companies actually involved with the launch (and subsequently integrating your product offering). This only works if you can pre-sell these companies on what is in the hopper (not an easy task to get someone to commit to integrating something before it is ready). But if done well, it can turn your medium-sized announcement into a mushroom cloud type of ripple effect. Having great examples to point to from the get-go can make all the difference.
As I said in the beginning, closing deals is not an easy task and there is no such thing as a born closer. Learning the ropes from an expert, experienced deal-closing veteran is the only way to do it. Be wary of being the guy/girl in charge of closing deals for a company, without the proper experience. Quit that job, go to work for a closing machine and then become the closing machine yourself.
Alex Taub leads business development and partnerships at Dwolla. He blogs at AlexsTechThoughts.com.
Mariano Rivera photo via Keith Allison/Flickr