The Avis Rule

I have worked at big companies.  Once you get 4+ hops between you (the CEO or business leader) and the customer, you are generally spending more time managing people than actually being an active contributor.  Your job is to provide strategic direction, people development, and communication.  I always have to remind myself of that.  In a startup, you are constantly dumbfounded as to why you can’t get these big, monolithic companies to move faster.  The reality is that they wont.  They are big.  There are some exceptions to this rule:

– The Avis Rule – guys that are in second place or lower do try harder;  I remember being the RealPlayer product manager in ’96 and trying to get a distribution deal done with both Microsoft and Netscape.  Guess who was easier to do a deal with?  Microsoft.  #2 in the browser wars (at that time) was hungrier.

– Beers and Steak Dinners – if you’ve built a personal relationship with your business partner, you will get stuff done.  Its not Web 2.0 but its reality.  People like to connect with people. 

– Competitive situations – if you do a deal with another large company, the other company will either try to kill you or partner with you.  More likely they will try to buy you if they think they are going to lose you.  This is especially true with M&A events and VCs.  Alas, this is just human nature.

I have been running a totally ad hoc and un-scientific poll over the last 2 months around prospective customer response time.  Granted there are a lot of variables that weight the response time by personal relationships, but, here was a fun little exercise that I did. 

Average response time from initial email to email response:
Advertising network executive – 1-2 days
Major search engine – one week
Advertising agency – one week
E-commerce executive – one week
VC – under 1 hour
Brand – > 2 weeks
Internet startup – under an hour

What does this imply?  Faster companies move faster.  It is interesting to note that even big advertising network companies respond pretty quickly.  I tend to plan our business development path around engaging viral and word-of-mouth networks versus relying on big enterprise deals with big players.  Even when you close a big deal, its still hard to get the wallet share of revenue or impressions up in a timely manner.  If you need a big customers to move the needle, then pick off #2 or #3.  They usually need the help and haven’t invested as much in R&D.  You could really fill a gap for them. 

Plan your time wisely, take a deep breath, and  understand that its hard work sitting thru staff meetings all day in a big company.