How the API killed Business Development
In the “old days” integrating two distinct software solutions was hard work. It took time and precious (engineering) resources to achieve. Companies that wanted to partner to sell a combined offering had a lot of work in front of them. Therefore it wasn’t just enough to assume that integrating to a third party would have financial benefits for one or both parties. You had to be as close to certain as possible.
Business Development was created to solve that problem. Well educated, (often MBA), expensive individuals were hired by technology companies to identify rewarding partnerships then do the legwork to understand the potential and costs.
Of course, business development people didn’t always get it right. Sometimes that’s because it’s hard thing to predict how successful a combined offering might truly be. Sometimes that’s because they weren’t goaled around the long term success but rather the short term benefit of announcing a grand new partner. Either way, when they got it wrong it was the engineers and project managers who were stuck with the mess.
I remember the first time I saw it change. It was around 2007. My company had developed a prototype for a social network focused on athletes. Video was therefore critical. I think our design abilities sucked but one thing we nailed was compressing and storing high quality video simply and quickly. We were in the Bay Area and Facebook was getting a lot of attention. We thought this could be something really valuable to them and looked at setting up a meeting to discuss “how we could partner” We had good connections and got to their CFO at the time.
My CEO was shocked when the response was “We have an open set of API’s if you want to partner” That was the beginning and end of the conversation. That wasn’t how things worked up until that point but it was obvious it was the way it would work more and more going forward.
As I mentioned, BD guys and gals were expensive and their results often dubious. And Developer CEO’s were eating the world and often had first hand horror stories of working on some of those projects. Business development was relegated to the trash heap and replaced by “Sure we can partner. Our API’s are public and our marketplace is self service. Good luck!”
Honestly that’s probably the right answer 75% of the time. The decline of the business development person is most likely a good thing. The death of the business development role though could mean missed opportunities. Microsoft reached soaring heights but working with IBM. Many smaller startups achieved success by finding that “anchor tenant” In today’s startups I don’t see that person doing the hard work to explore opportunities with other companies. It’s too often “Let’s integrate to their API’s, tweet it and blog post it, and sit back and let the market decide” That’s not really “hustle”
- jmlite posted this