Fear BizDev

So JDFI 2014a is over. Check the videos here :: http://www.youtube.com/watch?v=QO7W6ePtwM8&list=UU77igO-PM8Ww1pWCjfYdfUw

What a great event and investors are frothing to get at the startups. awesome.

I had great fun mentoring a few of them.

I have had some follow up talks post demo day and I thought I would share one tidbit.

There is always a few big companies swarming around startups looking to grow their own business via partnering with a startup. Startups are small and looking to grow so initially the thought of working with a big company looks really appealing – a growth strategy of sorts. Well – let me warn you – many times partnering or doing some sort of business development deal #BizDev can usually be worse than not partnering at all.

Some of the pros:

– Getting users
– Getting traffic without paying for it
– Getting some PR
– Being able to tell investors you are working with or have signed a deal with so and so
– Learning from a big company

But in reality what can happen is the cons:

– It might take months to bring the project online
– You will have all the red tape to sort
– You will be at the mercy of the big company development and QA schedules
– Investors will think that the deal is more important than it really is and hound you about it. Not realizing the schedule is now out of your hands
– You might find that the cost of the users was more expensive than just buying the users via marketing
– You probably won’t learn a lot from the big company cause in reality they are learning from you
– The PR is not that big of a deal – sure it helps but it won’t make your startup

I am not saying don’t do #BizDev but have a healthy skepticism for how hard it is, how it may slow you down and how it may throw you off your core business plan.

Sometimes #BizDev is better in the middle stages of a startup than the early stages.

Just saying…

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