Olson’s Observations

This post has been in the works for a while but Micah Baldwin - the new BD guy over at Lijit - really got me to want to sit down and finish it. I had the chance to meet Micah about a few weeks ago when he was in NYC. We headed over to the Lombardi’s Pizza after the Bug Labs meetup (which was a lot of fun) and, as fellow BD guys tend to do, started talking shop.

One of the questions which we spent a bit of time talking about (and one we both get a lot) is: Is business development the same as sales?

Honestly, it is hard to say what business development is and isn’t whereas sales is much more of a process and a science and, therefore, much easier to describe. Thats said, I would say that the question about what it is BD guys do and whether or not BD is simply a fancy title for sales is justified and one that should be explored.

While there are a lot of things in sales and business development have in common they do differ on a couple points and Micah posted about one of the major differences soon after our dinner at Lombardi’s.

Micah’s main thought is that the big difference between sales and business development is the allotment of risk.

Sales typically involves a B2C type transaction where a product is sold to a consumer who pays a set (or relatively set) price for that product. The product presumably relieves some pain for the consumer and the salesman is able to bring in revenue for the company. It is a win-win situation with low risk on both sides (but I would argue most of the risk really lies with the consumer since the risk for the salesman can be - at least somewhat - mitigated through process).

Business Development on the other hand requires shared risk. In other words, business development is more about long term partnerships where driving revenue for both sides is the main concern.

BD is all about funding a way for two companies to work together in order to achieve mutual success via increasing revenue and/or finding new sources of revenue.

Micah said it best when he said:

Remember, with a Sales person, money is exchanging hands, while the Business Development person only has a contract with expectations for success.

Of course the less systematic approach of business development makes BD really hard to track. With sales you can simply track how many widgets were sold but with business development you need to track the results of the deals that were closed which may not be immediately evident.

Good business development is all about planting a lot of seeds and cultivating them so that deals will blossom and improve not only the company the BD person works for but also the companies that are on the other side of the table.