I was talking with a friend of mine yesterday about doing business development deals, and he was quite frustrated by the process that he was experiencing with one potential partner. He was calling on the highest levels at the company and knew that the ultimate decision rested with an executive committee. He met with 4 of the 6 members of the committee and each meeting seemed to be better than the previous one. In his last meeting, one of the executive committee members told him to go to yet another person to get the deal done. My friend was caught in a classic case of pass the hat. Everyone was excited about doing a deal, yet no one was willing to step up and take ownership of it. Before assuming any deal will happen, you need to ask yourself a few questions such as:
1. Who owns the relationship? In the example above, everybody was excited about a potential partnership, yet no one stood up to champion the deal and own it.
2. Who will get fired for not doing a deal? Every person has annual and quarterly objectives they need to hit. If doing a deal with your company creates more work, then why should they do it. However, if doing a deal with your company fits in the parameters of their overall goals, then you are probably in the right spot.
3. Who will implement the deal? In many cases, VCs and entrepreneurs can do a great job calling on a high level with executives at a company. However, the executives at a company do not usually implement the deal. Once a deal is signed, you need to understand who the day-to-day interface will be and how you and your company can make that person look like a hero.
In conclusion, I told my friend to stop wasting his time with that company and to focus on other deals. As a startup your resources are limited and some of the major decisions you make at a company are what you are not going to do rather than what you are going to do. In other words, you need to know when to say no. If you can do that earlier in a business development or sales process, the better off you will be.