Business Development 2.0

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  Originally uploaded by Andrew & Nicole.

It used to be that web companies needed to hire one or more smart networkers and set them loose on all the other web companies in search of deals that bring traffic, users, additional functionality, revenue, and a host of other good things. Most of our companies have business development people and they are some of the most talented people in our companies.

But we have witnessed some interesting things happening in and around open apis, rss, search, crawling, embed code, widgets and mashups that suggests there's a new way to do business development. Here are but a few of the interesting things we have noticed:

• YouTube makes it flash video player available via embed code on MySpace and their traffic takes off.
• TripAdvisor search engine optimizes its service and becomes one of the most popular travel services.
• Technorati hits delicious' api for its tags and builds the web's most succesful tag search service.
• Indeed crawls the Internet for jobs and builds a popular job service overnight.
• Kayak crawls the Internet for flights, hotes, and cars, and builds a popular travel service overnight.
• Qoop takes Flickr's API and builds a Flickr printing service without ever engaging with Flickr's team.
• Netvibes takes a few RSS feeds and builds a start page that looks as complete as MyYahoo overnight.

You get the picture. These days it's often better to just take what's already freely available on the Internet to integrate with other web services. As Caternina explains in this post, the Flickr team didn't really have enough time to focus on the multitude of companies wanting to offer a printing service. Qoop just built one and when Flickr looked at it, it was an easy decision to offer it to their customers.

We have noticed another thing happening. When you do get a business development deal with a leading web service, the implementation is everything and it often sucks. Witness the job search space. Indeed has a deal with the NY Times. SimplyHired has a deal with MySpace. I've looked at the media metrix numbers and neither jobs service (NY Times and MySpace) is delivering any real usage (0.1% of myspace users visit careers.myspace.com which is SimplyHired's myspace service). Think of the time and energy that went into these deals. And to get 0.1% of the users to take up a service is so deflating. I think it might have been better to do some creative advertising deal that could have gotten done much quicker and might have delivered better results.

The bottom line is that web 2.0 offers a new way to get integration with leading web services and you don't have to waste your time and the time of other busy people trying to craft deals that will probably work out badly anyway. As Caterina says, "Much, much better this way!"

Comments

[Charlie Wood]

Great post, Fred. I have two bits of supporting evidence:

Whenever I talk to press and analysts about Spanning Salesforce, they always want to know what kind of deal I had to strike with salesforce.com in order to provide RSS feeds for their data. When I tell them that no deal needed to be stuck, that all I did was write some code against a public API, they're confused. Score one for Business Development 2.0.

I often talk to prospective partners who want to build some software (e.g., a desktop widget or a mobile client) on top of the Spanning Salesforce feeds. They want to schedule phone calls, have meetings, and trade paperwork. I tell them that's not how it works: just write your software and sell it. The interface between the companies is no different than the interface between the applications--the API. If you want to include the price of a Spanning Salesforce subscription in your product, there's an API for that. If you want to build custom feeds for your users, there's an API for that. If you want to issue a joint press release, well, there's no API for that but maybe I'll build a form. Score 2 for Business Development 2.0.

It's disorienting for people used to doing things the old fashioned way, but once they get it, they love it. "Much, much better this way," indeed.

[d4rr3ll]

This reminds me of the talk that Tom Coates gave in London [slides], where he highlights the paradigm shift that is happening where we are moving away from a 'web of pages' and towards a 'web of data'.

[Berkay Mollamustafaoglu]

There are challenges though..
When creating a business that is dependent on another, there is a certain risk.
Can you be sure the "public" api will still be there once you build the service? will it be available for free or for a reasonable fee?
If there is no business deal, the provider can pull the plug, prevent you from using it, offer competing service etc.
Myspace - YouTube may be an example. Clearly, Myspace is not happy with YouTube leveraging them and will do whatever in its power to prevent them or at least "tax" them. They may not choose to do so when they are building their presence but conditions may change later on. I think any business currently relying on Myspace faces this risk.
Then again it can be argued that YouTube already got what they needed from Myspace..

[fred]

all great comments. thanks.

berkay - you raise a good point but often its about achieving "escape velocity" and then you can take things into your own hands. clearly that is what YouTube did with MySpace.

[howard Lindzon]

wooooo awesome. I get it. Hope my partners and board do :)

[Tony Alva]

I remember your long hair days, and your avatar is not indicative. You've sort of a Roy Orbison thing going in it.:-)

[Charlie]

You forgot Feedburner and Typepad...

[roger]

awesome post, fred. you are so right. i've already forwarded it around. it's all about leverage, and your post makes it perfectly clear.

[Bob Boydston]

It's called, "not having to re-invent the wheel", to overuse a cliche.

[Cameron]

Fred, your comments are right on in terms of 2.0 as a tool for BD, but you stopped short of saying what that means to the role of BD. Nothing has changed. The BD guy has always been the guy who sees how two companies can play together. Today's smart (good) BD guy simply works more with his in-house API guru and less with his Rolodex. Love your blog...

[Adam Breindel]

Sharp post. I think it's great you've put a label ("Biz Dev 2.0") to this phenomenon. We've pursued both paths ("grab the right data and go for it" as well as traditional "deal discussions"). To be sure, there's value in both. But, for us, fast time to market and cool functionality (like one-click airline check-in) have so far come from the "Biz Dev 2.0" efforts.

[Adam Breindel]

Sharp post. I think it's great you've put a label ("Biz Dev 2.0") to this phenomenon. We've pursued both paths ("grab the right data and go for it" as well as traditional "deal discussions"). To be sure, there's value in both. But, for us, fast time to market and cool functionality (like one-click airline check-in) have so far come from the "Biz Dev 2.0" efforts.

[Dimitar Vesselinov]

The next meeting will be in Second Life...

[sourabh niyogi]

Stunning observation, we use a whole bunch of the APIs in our service and I didn't really recognize the extreme degree of openness as a disintermediation of bizdev teams until you pointed it out. No "dry cleaning"!

[Jobs Markets]

what do you think of a concept like wagescore.com - interesting if they can execute. seems like a small outfit, but a big idea. needs proper precautions, but definitely promising.

[vaspers the grate]

My favorite business model of all is Post Secret.

Make money doing next to nothing. Let user create ALL your content.

Then publish books and related merchandise (calendars, pens, CDs, screensavers, mousepads, etc.).

[Kevin Burton]

For the record Delicious blocked Technroati and continued to do so even after Technorati repeatedly requested access. They've also done the same thing for Tailrank and most other web 2.0 companies I've talked to.

Its very clear that while Delicious claims to be open they clearly go back and forth on this issue.

I'd love to be proven wrong though.

[Isabel Wang]

Wow - what timing. You wrote your post on the same day that TechCruch reviewed Dapper.

"The company says it’s effectively offering an easy way to create an API from any website... Dapper provides a point and click GUI to extract data from any web site that can then be worked with and displayed via XML, HTML, RSS, email alerts, Google Maps, Google Gadgets, a javascript image loop or JSON."

Looks like we'll be see many more examples of Business Development 2.0 very soon.

[Sachin Palewar]

Humm, I get the idea. Now I need to try it out, lets see what we can do. Will discuss if I succeed.

[Alberto Escarlate]

Strange that a few days after reading this post I got spammed from QOOP. Back to BizDev 0.1

[Carter Nicholas]

I guess this makes the role of bd (initially) more of a strategic thinker and less of a salesperson. The bd person still needs to think the product through and get the right team of people doing the technical "getting" of information. First example from our site would be pulling in google maps to map hotels, and more api's to be used in near future. In terms of distribution, I considered looking for someone as a "technical marketer" covering sem, seo, rss and api and co-brand distribution. Then, since the groundwork of implementation is laid on a technical basis, the negotiations with other co's become less complex, and the role can perhaps be more junior. TBD...

[Gregur]

Very funny... almost as www.businesshackers.com