Randy Weber

Let’s cut to the chase - No, it is not bad for small guys to partner with big guys.

Bronte Media references a post from Albert Wenger about small companies partnering with big Internet companies - Avoid David and Goliath Partnerships. The rationale:

Partnering with the biggest of the big on the other hand tends to be problematic because they are unlikely to be sufficiently responsive. […] So whenever possible, as a startup you should rely on mid size well established companies when it comes to strategic partnerships.

OK, I have lots of experience with this on both sides of the equation. All I can say is that there is some truth to this, but in general this is bad advice. At Verizon we worked with a few small companies and ended up essentially building their businesses and keeping them from dying during the dot.com bust. But I’ve also seen Verizon treat small partners poorly and likewise for other big companies that I’ve worked for. The key for the small player is to have a good contract that lays out how the relationship is to work and has sufficient penalties for not playing nice. Having an extremely responsive account management team also makes a huge difference.

Of course getting a solid contract is easier said than done. I didn’t like giving other companies much power over us when I was at Verizon. Likewise, the guys that were bigger than us didn’t like giving us much power. But if you can focus on win-win and genuinely add value to the bigger player, you can get to a place that works for both parties.

It’s worth noting that big companies in general don’t like doing deals with smaller players because of the risk that they won’t be around to fulfill their obligations. I was the guy that had the unfortunate task of delivering the bad news to hundreds of small guys that we wouldn’t do business with them and often the reason was that they weren’t established enough. Big guys tend to want to go with established players.

The thing that I think is most overlooked is that if the small guy can work a good deal with the big guy, it can make their business. It makes them a legitimate player and opens things up for additional deals with other large players and additional funding. This far outweighs the risk of the partnership not working out.

37signals wrote “Big business learning that smaller teams can rekindle the creative spark.”

The message: Keep teams small, give employees freedom and a sense of ownership, don’t focus too much on the competition, create a culture of experimentation, and use technology to enable remote teams.

They quoted the NY Times as saying:

By breaking huge business units into smaller, nimbler teams, companies stand a chance of rekindling the creative spark that got them rolling in the first place. After all, “small is the new big,” as Seth Godin, a prolific blogger and author, puts it in his 2006 book of that name.

I couldn’t agree more. When I was working at start-ups one product manager and one engineer could get more done in a day than an entire scrum team at one of my larger employers could do in a week. This came with the added benefit of nothing being lost in the translation and the ability to rapidly make changes until you got to where you wanted to be. I miss those days. It was very invigorating and both myself and the engineer walked away with a great sense of accomplishment and ownership.

Now go and spread the word.

A former co-worker at Verizon who was new to the group once asked me what it takes to learn how to be in Partnership Development. At the time I didn’t really have an answer. It had seemingly just happened for me. But after much reflection, it didn’t just happen for me. In addition to some basic skills, I had a lot of help along the way. Here’s what I think it takes to be effective at Partnership Development (and Product Management):

1. Vision – ability to see the future and visualize possibilities
2. Persuasion – ability to sell this vision to your management and your potential partner
3. Negotiation/Contracts – patience and attention to detail necessary to grind out an agreement, the requirements/specifications necessary to implement it, and the perseverance to manage the partnership (product) once launched
4. Leadership – ability to inspire members of cross-functional teams and get them to share your vision in order to develop and launch the partnership (product)
5. Communication and Organization – ability to keep everyone on the same page and up to date

All of this starts with a mentor to help you master these skills.

Vision and Persuasion
My former boss Shane taught me how to see the big picture and to sell that vision as we cranked out a multi-stage e-commerce strategy for a wholesale distribution company taking the company from a crude web site, to a polished online catalog, along with e-commerce and customer support applications that were back-office enabled. He was a great mentor and a friend.

Negotiation/Contracts
My former boss Patricia mentored me on the intricacies of negotiations, term sheets, and the contract process leading to a handful of multi-million dollar deals and dozens of smaller deals. It takes patience, perseverance, and creativity. She too was a great mentor and a great friend. She created the Partnership Development executive in me.

The attorneys I worked with (Allison, Cody, and Mark) were very gentle with me and helped me through the contract process. I still consider them friends today.

Together, all of these kind people helped me to understand the value of and how to get to a win-win-win partnership (both companies win, along with the customer).

Leadership
My former boss Kendall taught me how to survive in a matrixed organization with the result being the successful launch of over a dozen new features in a 3-month window for an online trade show startup. She was very good to me. A great mentor and a friend. She’s the one that pushed me into a larger organization to beef up my Product Management skills.

My former boss Karl taught me how to lead large cross-functional teams. He was a great mentor and a great friend. He created the Product Manager in me and helped me develop the confidence to try new things resulting in multiple successful product trials and the launch of millions of dollars worth of new products.

The Communication and Organization skills seem to come from practice. Lots and lots of practice.

If there is a theme in this story it’s that you need people to help you on your way towards developing the skills of your profession. I was very lucky to have had some great bosses/mentors/friends along the way to help me grow into my Partnership Development and Product Management roles. Thank you.

I look forward to passing these skills on as I advance in my career.

The Kelsey Group wrote about something that was best left dead: the CueCat. In Quick Response Bar Codes Invade Yellow Pages the concept is that small bar codes can be inserted into print ads and scanned by mobile phones to link users to information over the Internet. The problem is that this has been tried and failed. I still have an old CueCat lying around the house. My former employer, Verizon Directories, actually participated in the CueCat debacle.

Slow Leadership discusses research out of Wharton about how treating partners fairly matters. No kidding. Any good business development person can tell you this. Yet many executives don’t get it. So here’s how it works: if your partner feels like you screwed them, then they won’t put any effort into the relationship and both parties end up losing. So the lesson for today is DON’T SCREW YOUR PARTNERS!

John Mariotti posted a guest article on Small Business Trends on Ten Reasons I Won’t Use Social Media Sites. In it he comes off as a stubborn, grumpy old man. Note to John - not everyone gets to spend all their time going from conference to conference shaking hands.

While I’ve founds sites like MySpace and FaceBook to be useless for business networking purposes, Linkedin has proven to be very useful. I’ve gotten many interviews through invitations to link up and through introductions. In my past role at Match.com, I reached multiple leads via Linkedin that I otherwise would not have been able to locate. So my experience is that social networking can be very effective both in finding a job and in finding a lead.

Bernard Lunn on ReadWriteWeb gave a list of 11 Biz Dev 1.0 Tips. Of particular interest are items number 3 and 4:

3. Wait until you hear the screams. If you have a fire engine, you are not needed until the house is on fire. The best sales people wait until they see a real need before applying a lot of effort…

4. Two ears, one mouth. …People don’t buy products, they buy solutions to problems. Find the problem and show a solution based on your product…

I can’t tell you how many times I’ve been sent after people to get a deal when there was no reason for them to want to work with us. It never works. We had nothing to offer. I can’t sell ice to an Eskimo. Nor can I tell you how many times I’ve been contacted by people with nothing to offer us but still wanting to do a deal. They either talk about the technology or, even worse, they expect me to come up with a way to work with them. My first question to everyone that calls is always - “What did you have in mind?” If they don’t have an answer, then we’re done.

Alex Iskold on ReadWriteWeb posted “A Guide to Business Development 2.0.” Of course I have a complaint or I wouldn’t be writing this. Alex thinks that “cold calling is dead.” He discusses Linkedin, APIs, and Twitter as alternatives.

Yep, Linkedin is great. APIs are nice if you have them, but biz dev folks aren’t in charge of such things. And outside of the early adopters and tech saavy folks of the Bay Area, not everyone uses Twitter.

Sometimes you have to cold call. No one ever answers their phone, so you’ve got 30 seconds to make your pitch. Most folks get far fewer voicemails than e-mails, so the likelihood that your message will be received is much higher. Even if you’re using Linkedin, you still have to rely on e-mail. In reality I almost always end up calling and e-mailing and that’s what most folks do to me. If their e-mail doesn’t interest me, then I don’t respond. I always return voicemail. If my employers took away the phone, I wouldn’t be able to do my job using nothing but Web 2.0 technology.

I’ve been a Match.com user for years. I really enjoy the service and am a big believer in it (and the whole matchmaking segment in general). I’ve gone from being an evangelist for Match.com to an employee. I’ve resigned from my business development position at Verizon SuperPages.com and accepted a position at Match.com as Director of Business Development. I’m very excited. The matchmaking business is fascinating with a lot of exciting things going on.

Disclaimer - I work for Verizon SuperPages.com, so I compete with Yahoo! Local. These notes are my comments and not that of my employer. 

Small Business Commando put together a teleconference today with Paul Levine of Yahoo! Local and Matt Booth of The Kelsey Group. The tagline for the conference was “Insider Secrets to Blow the Doors Off Your Competition using Local Online Marketing.” While the conference didn’t live up to the tagline, it was none-the-less very informative.

Matt started off saying that print yellow pages isn’t likely to go away anytime soon and that many of the major players are active in the local space online, in particular Verizon. He said that local search is growing at a faster rate than traditional IYP (Internet Yellow Pages) searches.

Paul says that they found most local searches to be commercial in nature. Yahoo’s local strategy follows along these lines:

1. User Participation (as evidenced by their use of user reviews and the connection with Yahoo! 360)
2. Integration with Mapping (believe that mapping can be an interface to local search)
3. Encouraging Merchants to Participate (as evidenced by ability for merchants to add/update online listings for free)

Of special interest, though it’s already pretty obvious, is Paul’s statement that Yahoo plans to include social networking and user participation across all Yahoo products.

Mobile is a big part of the future of local, though the technology is not there yet. In particular, Paul said that mobile devices need more bandwidth, more memory, and carriers to provide more information about users’ locations. In the next few months Yahoo will allow merchants to participate in the mobile environment.

Paul went into detail on Yahoo’s local products - local listings (free), enhanced listings, and featured listings. The upcoming sponsored search platform will include the ability to geotarget.

Yahoo works with Dex, YellowPages.com, Leads.com, and Lawyers.com to take their local products to market in addition to direct sales from Yahoo’s web site.

Interesting stuff.

Here’s a summary from The Kelsey Group.