Category Awareness is the Great Separator

Nearly all BD deals start where there is no category awareness. Was Apple thinking about footwear and apparel development before Nike approached them? Highly unlikely. Likewise, the company you’re pitching may be thinking about advertising, or customer relationship management (CRM), or security but not about food service, or property management, or automotive fleet management, or anything you’re pitching. It’s not on their radar. But if that’s where the opportunity lies that you want to pursue, it’s your job to make them aware and to help them visualize what’s possible. You propose a strategic partnership to develop and pursue this jointly. That’s BD.

But if the company has been thinking about security, for example, it’s on someone’s plate. It’s someone’s responsibility. That individual needs to, at some point, investigate how to increase security for the company and their employees. So when you approach them about a new tool—a key fob, let’s say—that generates a constantly rotating password that employees would use to access highly sensitive company information, they’re sold. It’s exactly in line with what they were looking for. Granted, they weren’t aware of this type of product or its functionality before you called, but they knew they were after a security solution. You pitch it, they love the product, they’re sold. And in the end, there is nothing strategic about this deal. You made a sale. They cut you a check. You move on to your next prospect. That’s sales.

That’s also very different from approaching a company about jointly developing an entirely new security system that does not cur- rently exist, rather than selling an off-the-shelf product. Maybe this new security system utilizes biometric sensing technology to determine identity and verify access and behavior through an independent database. It may even leverage geolocation using technology exclusive to wireless carriers. This type of new system requires expertise in security, as well as biotech, possibly with multiple wireless carriers. Developing this new technology jointly versus going it alone could occur only through a BD deal, as evidenced by the four distinctions: (1) because developing such a technology and product would be a strategic decision for both companies, (2) no revenue would be generated on the front end, (3) it is not clear initially who within the target com- pany would be responsible for championing such an initiative, and (4) going for the yes initially will only get the project shot down.

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