Each month, Robert Walters California hosts specialized events within the various industries we recruit for. The purpose of these events is to create an opportunity for business leaders to share ideas, challenges, and best practices. Last month’s event, organized by our B2C marketing team, was centered around business development (BD). We wanted to know how startups choose new verticals to move into, how founders should go about making their first BD hire, and how BD professionals have successfully shifted from one industry to the next. See a summary of the discussion below, and please let us know if you’d like to attend future #BDMatters events by emailing us at email@example.com.
Leading the panel:
- Lee Anne Grant- Chief Business Officer @ The Assembly (formerly at Google, AOL, POPSUGAR, Brandless, Inc.)
- Drew Denbo- VP of Business Development @ Skillz Inc. (formerly at Rhapsody, Beats Music, Amazon)
- Prahar Shah- Vice President/Head of Corp Dev/Bus Dev @ Eaze (formerly at DoorDash, founder of Mobee, now “Wiser”)
- Bahigh Acuna- Growth, Strategy & Partnerships @ Postmates (formerly at Monster, Ancestry, Spotify)
Do you have a certain framework or process that you use to decide which new verticals to move into?
“I think any bus-dev person knows the difficulty we face when trying to convince internal stakeholders to launch into new verticals, especially for early-stage startups,” says Prahar Shah, Vice President/Head of Corp Dev & Bus Dev at Eaze. “In the beginning, your priority is on finding product-market fit in one core market that you've focused your vision and capital in.”
“My opinion is that you shouldn’t attempt to launch new verticals pre-series C (maybe series B). However, DoorDash was a different story. In 2014, the competitor delivery companies at the time lacked a true competitive differentiator or defensible moat. There were dozens of last mile delivery companies who had raised Series A and they all had the exact same playbook of signing up local mom and pop restaurants,” Prahar continues.
“National chains now represent a majority of DoorDash’s revenue, and is a major reason it has the most dominant market share in North America. The company is built on top of chains like Taco Bell and Cheesecake Factory. By focusing on these national chains, and signing more of them than any of our peer companies, we created a moat that continues to be defended today.”
Lee Anne Grant, Chief Business Officer at The Assembly advises businesses to “build separate teams for core business and new business, because trying to have one team focus on both can mean that both will suffer.”
“I’m a big fan of Amazon’s 6-page proposal,” adds Drew Denbo, VP of Business Development at Skillz Inc.
“There are so many great practices that Amazon has pioneered, many of those ideas having originated from the company’s leadership principles. In terms of new processes, the 6 page document format forces leaders and their teams to think backwards from launch, starting with a fictitious press release, fully explaining how customers and internal teams will be impacted by the proposed idea,” adds Drew.
How do you know which new verticals will help your business grow in the right direction?
“One of the biggest, most important things to do, is test the market and have conversations with potential partners to see if your BD teams also need to cast a wider net in order to fill up the proverbial funnel with lots of opportunities to be sure that one or more hits,” says Drew.
“I recommend nailing down one user experience first, and then think in terms of concentric circles outside of that core,” adds Prahar. “In DoorDash’s case, we focused on food delivery, which turned into national chain food delivery. Every time you launch a new vertical, you need to find a second product market fit,” says Prahar.
“Be sure to talk to your Head of Marketing and Head of Product to get an understanding of what’s really important. Your job in BD is to amplify what’s working, and to assist sales in the markets where you’re really seeing your revenue,” says Lee Anne.
“At POPSUGAR, we found that midwest retail was driving more of our business than the big name brands you’d see on the cover, so that’s where BD focused their efforts.The other option is to figure out what’s NOT working and to focus your BD efforts on how to solve that problem,” she adds.
What is your advice for BD professionals who work with founders who have technical or product backgrounds? Do you feel your role is understood and valued by these individuals?
“Most founders were the first BD people. They were the ones who had those initial conversations in order to figure out which partners were working and which weren’t working. Acknowledging them and learning what worked for them is really important,” advises Lee Anne.
“Your relationship with the rest of the business also depends on the culture. If the company is very product-driven, and the vision of the company lies within the product, then making sure you have alignment with product is incredibly important. You should be a servant to the product strategy, product vision, and product team. By asking them what they’re thinking of, and where they see the company growing, you can build that trust,” says Prahar.
Bahigh Acuna Growth, Strategy & Partnerships at Postmates says: “There's always going to be friction between departments: marketing and sales, sales and post-sales, BD and implementation (aka product).” “It’s important to never make assumptions or devalue people’s roles. Something that seems simple, like placing a logo on a product could be much more complicated than you would assume,” he adds.
How would you advise BD professionals who are looking to move from one industry to another?
“You're in a function. You're in a vertical. You're in a size/stage in your career. I recommend only moving one of those variables at a time. So if you work in BD, and you have experience working in early stage startups, then moving to a different industry should be a problem,” says Lee Anne.
“I suggest taking a very “first principles” approach. Take an owner mentality and learn the prospective business inside and out. For example, at DoorDash on your first day, you get your laptop, you meet people, and then you go out for the rest of the day and you do deliveries. Every single employee does this. Regardless of where you’re at you should learn that business through and through,” says Prahar.
“During my first 3 months at DoorDash, every weekend night I was out doing deliveries. When we first marketed Taco Bell partnership, I was out in Stanford putting up flyers on the campus about Taco Bell delivery. Being in the weeds and living your product and business is the only way to gain the respect, trust, and credibility to have folks support your deals,” continues Prahar.
“I went from DoorDash to the cannabis industry, which I knew really nothing about. Go to conventions and learn key topics in the industry. Learn about what challenges that industry is facing,” he adds.
“In my case I went from SaaS, to music, to genetics, to on-demand food delivery, and I didn't know anything before joining. I didn’t know that the music industry was so heavily regulated or how licensing worked, and I wasn’t familiar with the regulatory environment that surrounds a DNA business,” says Bahigh. “"You’ll bump into companies that will want someone with industry expertise, but you’ll also find that many companies give chances to people who are talented and have the right attitude regardless of their previous industry experience. In that case, you need to learn the industry as quickly as possible and apply your previous expertise into this new industry,” he says.
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