For most startups, the idea of hiring a Chief Business Development Officer is a pipedream. Only global corporations have that role, right?
After all, strategic partnerships and M&A are rare events for a startup and can be handled by the founder/CEO, or potentially even by someone in sales. If a startup is partner or channel heavy, those areas may be the focus of the sales team in general. Or, if there is sporadic M&A activity, it can be handled by external advisors or bankers. So, how do you know when to hire your first CBDO?
If you’re spending too much of your own time on things that a Chief Business Development Officer could be doing, it’s time to hire a CBDO. When a deal shows up, it’s a mountain of work. There are countless meetings and conversations, there’s a ton of due diligence that needs to be done, and you’re always thinking about the strategic roadmap moving forward. When a deal shows up, the time-dependent processes and tasks can consume all of your bandwidth. The problem is, you can’t control when it happens. It can be worth it to hire a CBDO—even if you think you’re only going to do one deal—just to take all that effort off your plate.
Another sign you should hire a CBDO is if your board asks you for your M&A roadmap, and you don’t have a great answer or aren’t sure how to get to one. For a startup, the strategic roadmap might just be to grow the company any way they can, but for a scaleup, you’ll have to be much more thoughtful about strategic growth. You’ll need to have metrics, benchmarks, and timelines, and you’ll need to know whether you can hit those milestones organically or whether you need to partner, acquire, or sell off parts of the business. A CBDO not only thinks about all the nuances of a strategic roadmap, but has done the work to make it easy to pull the trigger when the opportunity arises.
A more practical solution for many startups is to consider a fractional Chief Business Development Officer. A fractional CBDO may be the way to go if you need help creating a market map or defining your partnership or M&A strategy, and you don’t want to rely on an external advisor or banker for those. A fractional CBDO can also help execute M&A transactions that are too small for a banker. If you’re not sure whether or not a full-time CBDO makes sense for your team, you can experiment with smaller deals first. A fractional CBDO could also help define a major new strategic building block like “creating an indirect sales channel” or “international expansion” and work with you and your whole leadership team together to create them, especially if no one at your company has experience in those areas.
Whether or not you need a Chief Business Development Officer depends on many factors, and every company has different needs, but these signs can help you evaluate what’s best for your team.
-Matt Blumberg, October 5, 2023.