The term BATNA, or Best Alternative To a Negotiated Agreement, typically refers to your fallback plan in the event that whatever negotiation you’re involved in doesn’t go through. Whether you’re negotiating the salary for a new job or the acquisition of your company, having a solid and strong BATNA can help strengthen your overall position.
However, the practice of developing options and alternatives is imperative outside of direct negotiations as well.
Let’s say, for example, you’re a startup that’s developed a shiny new widget. Its ready to go, you’ve poured everything you have into it: time, money, blood, sweat, tears, political capital with your family, the whole shebang. Now you’re working on that first big sales contract or you’re taking your consumer based product to market directly to customers.
But what happens if: plan A fails, you don’t close the sale, or your customers aren’t buying? Or, let’s say your rock star developer or sales person walks out the door to the competition? Maybe the economy tanks or your biggest customer fires you?
Now what? Are you finished? Out of cash? Out of options?
Have you thought through your alternatives, or plans: B, C, D…ZZ?
Startups in particular focus their initial energies on one path to revenue. Sometimes this means focusing on chasing one or two large initial customers. While for small teams with limited resources and finances, you have to prioritize and not spread yourself too thin, it’s imperative that you constantly work on improving your alternatives and strengthen your overall business position.
Sometimes, just walking through the process of exploring alternatives will allow you to identify bigger market opportunities for your company.
Here are a few basic questions I ask myself and other business owners when walking through their BATNA.
- Given your existing strengths and assets, what other problems can you solve and for whom?
- What are some other routes to market, i.e. resellers, affiliates, joint ventures?
- Are there other opportunities in the pipeline that you should be nurturing?
- Are there strategic partnerships that you can develop to help bring your product to market and scale quicker?
- How can you diversify the risk of someone leaving the company?
- What else can your technology be used for?
- Do you solve other problems for other people than the ones you’re directly focused on?
This is list is by no means complete. Usually though, if you start the brainstorming session by focusing on what your core strengths and assets are and then develop a list of other options for developing your market, it will get the conversation going in the right direction.
Now, I’m not saying go out and chase each of these options or alternatives. Focus on your core strengths and value proposition, and work opportunities that leverage those. Keep your priorities in order, but don’t ignore options that can mean bigger wins for you or build alternative sources of revenue.
The better you develop your BATNAs, the stronger foundation you create and the more you increase your overall value as a company.