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August 2012

Danger Will Robinson - Engaging the Elephant Top Down

Just last week I met with a software company with a cutting edge Cloud based web service – the type of service every engineer and designer in the world will be using some day.  They first engaged with Autodesk from the top down – by striking up a conversation with our CEO that led to Autodesk investing in the company.  Now this all happened four years ago when the Cloud based web services were young, fresh and mostly unproven. Danger sign

Though an Autodesk software partner for four years, this company had little understanding how Autodesk could help them build their business and - except for initial funding - was making no use of their relationship with Autodesk to grow their business.

How could someone with a direct relationship with the CEO end up so disconnected and getting so little value from their relationship with Autodesk?

The root of the problem is they had a relationship with the CEO and virtually no one else at Autodesk.  If you are a small company trying to leverage an elephant, having a relationship with the CEO is “nice” but - from a day to day “help me build my business” perspective - not all that useful.  The CEO has plenty to do and hand holding a small start-up is not near the top of the list.  To effectively leverage an elephant, you need relationships with several parts of the elephant – sales, marketing, product management, engineering, and so on.. 

Can you expect a CEO of an elephant to help you develop all these relationships – to do the personal introductions and organize meetings and presentations for you across what may be several divisions within the elephant?  Of course not.  That is why elephants that are  committed to developing and growing large partner ecosystems have teams dedicated to helping partners navigate and leverage their relationship with the elephant.  At Autodesk this team is called the Autodesk Developer Network.  Other popular names for these teams dedicated to helping partners are Developer Relations, Developer Marketing, Partner Evangelists and so on. These folks succeed when you – their partners - succeed.  They know who within the elephant’s organization is interested in what you are doing and can help you make valuable connections – whether with sales, marketing, technology, customers, etc. Top of pyramid

The company I had visited talked to the CEO, an Executive VP and then got lost.  They never engaged with the Developer Relations folks (the Autodesk Developer Network) so had no formal access to Autodesk technology, support, marketing resources, sales channels and just simple advice on how to most effectively leverage their relationship with Autodesk.  They felt ignored and left out in the cold because they assumed a relationship with the CEO - along with the financial investment - insured they would get all they help they needed.  It didn’t.  That said, I can understand why a small company might believe the personal relationship with the CEO and financial commitment would be the “keys to the kingdom”.  But don't you think this is being a bit naïve?

So When You Start Dancing with an Elephant

You need to develop a relationship with someone - or a team - within the elephant whose success is tied toyour success.  A person or team that will be there to act as your guide – that will help you leverage the resources and brand of the elephant to build your business.  You don’t want to depend on someone that doesn’t view helping you as important to their success. 

Remind you of one of my prior blogs? 

Elephants and Termites.  It’s all about your really knowing what the motivations and success factors are for the people you engage with within the elephant.  Is their success tightly tied to your success?  Do they have other priorities that could leave you feeling neglected, ignored or forgotten?  Do you have a very clear and objective understandings and expectations of what the various employees’ within the elephant can do for you – and what they can or will not?  As I said in Elephants and Termites, when in doubt ask them.  Ask them straight up what their priorities are – and where you sit among their priorities.  Find the people within the elephant where you are their priority.

The Proposal

After a hiatus of nearly a month, it’s time for me to get on with the “Marrying the Elephant” thread.  Though after spending 29 out of 37 days out of sight of land on the high seas, and almost all that time barefoot, I find myself being a littleslow getting back into a “business frame of mind”.  Enough excuses – here we go.

So how do you get the elephant to propose to you – to suggest the merger/acquisition? 

In most cases you don’t.  You need to propose to the elephant.  You need to convince the elephant that what you have – whether that be one or all of  the following - industry expertise and insights, deep customer understanding a relationships, leading edge technology not easily/quickly developed by the elephant in house – could be much more valuable to the elephant then to your small growing business. So you are really “selling” your business to the elephant.  It’s just the bride telling the groom they should get married – and not waiting for what may be an unsure groom to propose.

You’ll likely need to suggest the marriage to several employee’s of the elephant because it’s very frequently unclear who the decision maker is – or who can influence the decision makers.  It may also take two senior people to think a merger is a good idea to really get the ball rolling.  So it’s your making the proposal to a product line manager, senior industry manager, senior sales exec, vice president, head of M&A – and if you can get to him or her, the CEO.

How do you make the proposal?Marriage proposal 

You’ll need a few different proposals.  Pitching a CEO may be just half a dozen PPT slides – or even no PPT slides – big picture opportunity.  A product line manager is likely going to want to see lots of market size and growth details as well as technology benefits and where you deliver competitive advantage.  The head of the elephant’s M&A team will surely have an eye out for a spreadsheet showing existing revenue, revenue growth, profitability, projections over several years, and time to break even.

You Need to Listen Carefully

Everyone you suggest a marriage to will give you the opportunity to learn what the elephant finds most valuable – enabling you to tune your proposal to make it more attractive.  But this feedback can be very subtle at times and require you to dig into their response to understand what they are thinking and why about your proposal.  Hesitations in response to your statements and questions, body language and more.  Bring your major account sales skills and empathy to the table when haing these initial merger discussions.

Timing Could Be Wrong

Elephants have numerous demands on their time and attention.  They also go through “financial cycles” where they are at times more and less motivated to pursue acquisitions.  Sometimes it’s obvious when they are aggressively pursuing acquisitions as a business innovation and growth strategy as you can see it in their quarterly statements to the investor community, but sometimes you cannot and will need “smell it” as you talk to various elephant employees about the value to the elephant of acquiring your business.  A good example is a few years back when Google was on an acquisition binge acquiring what I think was over 50 companies per year for two or three years.  Then this last year as competition heated up and growth slowed down a bit, they refocused, actually “purged” themselves of a number of acquisitions (one example I am familiar with is their selling SketchUp to Trimble), and significantly slowed down the pace of new acquisitions.  If timing looks wrong, you will likely have to bide your time for what could be a year or two while continuing to position your business as an attractive acquisition.  

At times the next best move – especially if you feel your business has a limited window of opportunity and maximum value - is to visit the elephant’s biggest competitor (if you haven't already).

So don’t be bashful!

Whether you view yourself as the bride or the groom (or here in San Francisco it wouldn’t be all that unusual for there to be two brides or two grooms), propose!