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Balancing Business Development, Relationships, and Social Exchanges
Julian Walder is an entrepreneur and startup builder known for strategic marketing, innovation, and product management. Fueled by curiosity, he leverages technology to solve real-world problems.
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In this series I document my entrepreneurial journey and definitely some other's that inspire me
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In the world of startups, it's often a race against time to close deals, secure funding, and ensure your company’s survival. As an early-stage CEO, there's a lot of pressure to focus on business development and closing deals, sometimes at the expense of other important aspects like relationship building and consultative selling. Recently, a conversation with a fellow startup founder, who was upset about being refused a favor by another startup builder, led to a deeper reflection on the role of social exchanges in business relationships, and the importance of understanding and addressing the needs of others.
According to Canadian psychologist Jordan Bernt Peterson, all relationships, including business relationships, are social exchanges. This perspective holds even more significance in the early stages of a startup, where every relationship counts and is often nurtured personally by the CEO. It is crucial to understand the social exchange from the other person’s point of view, and comprehend their needs, focus, and personality traits as described by Peterson. Peterson's personality model is based on the Big Five personality traits and includes:
Openness to Experience: People high in openness are more creative, open to new experiences, and have a wide range of interests. Understanding this trait can help in identifying if the other person is open to new ideas or prefers sticking to known methods.
Conscientiousness: This trait involves being organized, dependable, and disciplined. A person high in conscientiousness may value reliability and a structured approach.
Extroversion: Extraversion involves being sociable, assertive, and energetic. An extroverted person may prefer direct and open communication and may be more receptive to forming new relationships.
Agreeableness: This trait involves being compassionate, cooperative, and likable. A person high in agreeableness may value harmony and cooperation over competition.
Neuroticism: This involves being nervous, emotionally unstable, and prone to worry. A person high in neuroticism may need more reassurance and support.
Understanding these traits can provide insights into the other person's needs, focus, and how they may respond to your request or proposal. It helps in tailoring your approach to match their personality and increase the chances of developing a healthy business relationship.
In the context of early-stage startups, the founders often play a pivotal role in building relationships with stakeholders, investors, and other startup builders. A founder's personality can greatly influence the nature of these relationships. For instance, a founder high in extraversion and agreeableness may be more successful in networking and building rapport, whereas a founder high in conscientiousness may be more effective in managing projects and following through on commitments. Understanding one's own personality traits as well as those of the people you are interacting with can lead to more effective communication, better alignment of expectations, and ultimately, more successful business relationships.
Asking for a favor or help might seem like a straightforward request, and Steve Jobs was a big fan of asking for help, but it can sometimes become a blocker in developing a healthy business relationship, especially if the person you are asking for help is in a similar pain as you are. Jordan Peterson's theories on social exchanges in relationships highlight the importance of understanding the other person's perspective and the dynamics at play. Each party in a relationship, business or otherwise, has their own needs, desires, and challenges. When you ask for a favor, especially from someone in a similar situation as you, it can create an imbalance in the social exchange, leading to strain in the relationship. It's important to understand that the other startup builder may have their own challenges, and your request might not align with their current needs or focus. This mismatch in needs and capabilities can create a barrier to developing a healthy, mutually beneficial business relationship.
Understand and Address the Needs of Others:
Instead of approaching others with a request for help or a favor, it might be more beneficial to start by understanding their problems and needs. Then, customize your proposal based on how your product can help them speed up their business development. This approach not only shows that you understand their challenges but also that you are invested in helping them succeed.
The Power of Consultative Selling:
Consultative selling is about understanding the needs of your prospects and presenting your product as a solution to their problems. This approach requires active listening, empathy, and a deep understanding of your prospect's business. It goes beyond just selling your product; it's about building a relationship based on trust and mutual benefit.
Identify the Pain Points:
Start by identifying the pain points of fellow early-stage startup builders. This can be done by conducting informal interviews, researching their online presence, or analyzing their industry challenges.
Customize Your Proposal:
Based on the identified pain points, customize your proposal to show how your product or service can address their specific challenges and help speed up their business development.
Approach with Empathy:
Approach the other startup builder with empathy and a genuine desire to help. Instead of asking for help or a favor, offer your assistance and explain how your product or service can address their challenges.
Build Relationships:
Focus on building relationships rather than just closing deals. This includes following up, providing additional value, and being a supportive partner in their journey.
Seek Feedback:
After presenting your proposal, seek feedback to understand if your solution aligns with their needs and if there are any areas for improvement. This shows that you value their opinion and are committed to providing the best solution possible.
As an early-stage CEO, the pressure to secure deals and ensure the survival of your company is immense. However, it's important to recognize that a different approach to asking for help is required. Instead of asking for help to solve your own growth needs, the true power comes from offering help to fellow early-stage startup builders. Start with Hey, look: I'm building this, and it can solve your growth needs! This approach not only showcases your product but also positions you as a problem solver, rather than someone seeking assistance. It aligns with the principles of consultative selling and the theories of Jordan Peterson on social exchanges, by understanding and addressing the needs of the other party and creating a mutually beneficial exchange. While business development and closing deals are crucial, building healthy business relationships based on mutual respect, understanding, and offering help can lead to more meaningful and beneficial partnerships for both parties.
We invite other early-stage startup founders to share their thoughts and experiences on this topic. How have you approached business development and relationship building in the early stages of your startup? Have you found more success in asking for help or offering help? What challenges have you faced, and what strategies have you found to be most effective? Let's engage in a constructive discussion to learn from each other and grow together.