“The basics work. They always have and they always will. That will never change. So the key to us improving our performance in any area of our lives is identifying what those fundamentals are, and being relentlessly committed to performing them with consistency.”
This is a quote from famous speaker, coach, and author Alan Stein Jr. — and although he’s talking about basketball, his message also applies to dealmaking.
On his Raise Your Game podcast, Alan shared that in 2007, he was invited to work at Kobe Bryant’s Nike Skills Academy, a three-day camp for the best college and high school basketball players in the country. While at the camp, Alan asked Kobe himself if he could watch him practice one morning.
When he arrived at the gym at 4am, Alan was shocked to see that Kobe spent the first 45 minutes of his practice doing “basic footwork and offensive moves” that he often taught to middle school players. “He was doing everything at an unparalleled level of effort and with an unparalleled focus. And he was doing everything with surgical precision,” he recalled.
After practice, Alan couldn’t help but approach Kobe and ask him, “You’re the best player in the world — why are you doing such basic drills?”
Kobe replied, “Why do you think I’m the best player in the world? Because I never get bored with the basics.”
Both basketball players and dealmakers can learn a lot from the lesson that Alan says Kobe taught him that day: Just because something is basic doesn’t mean that it’s easy. And continuing to strengthen and hone these foundational skills over time is the key to winning.
Despite distractions like on-going market uncertainty and GenAI hype, the fundamental steps in the deal flow process have stayed the same — just like dribbling and layups. And the dealmakers who focus on fortifying these five foundational jobs to be done with the latest data and technology will rise to the top time and again. Let’s dig in.
Market mapping is typically the first step in the deal flow process. Not only does it help organizations research specific industries and investment opportunities, but it’s also the key to creating and refining effective investment theses. Although investors have been mapping markets for decades, building a comprehensive market map is now more important than ever as industries have become extremely fragmented and firms continue to grow more specialized.
While using traditional, manual approaches to plot massive markets of thousands of companies has always been time consuming, thoroughly mapping and accurately segmenting niche sub-sectors of mostly private businesses presents a new set of challenges. "If you've ever spent an all-nighter scrubbing M&A comps, you know the pain," laments corporate development expert and Tenant Company executive Charles Shannon.
Top dealmakers like Charles Shannon are turning to sources-first data to help them map private markets more efficiently. Sources-first data is created by connecting information across hundreds or even thousands of individual sources, such as buyer’s guides and conference lists. Companies’ profiles are linked to all the sources where information about them is found, creating a network of insights that gives dealmakers the context necessary to rapidly identify similar companies, generate competitive intelligence, and better understand entire categories.
It wasn’t long ago that investors expected deals to come to them via network connections, in-person conferences, or intermediary interest. Now, sourcing for both platform and add-on opportunities has changed, with 97% of dealmakers engaging in direct deal origination.
Organizations once dredged the Internet for as much information about private companies as possible, attempting to cast a large net and identify investment-ready opportunities before anyone else. However, growing competition, increased specialization, and ongoing market uncertainty mean dealmakers must sharpen their direct sourcing strategies to maximize efficiencies and stay ahead.
Dealmakers must now use data and technology to pinpoint and prioritize ideal proprietary opportunities for their organizations earlier in the sourcing process. One of the most effective ways to do this is by utilizing scoring. Custom scoring models instantly identify and rank private companies that match specific thesis criteria. It’s as easy as assigning specific values, or weights, to relevant company attributes like sector, company size, or even headcount growth. The greater a company’s score, the better the fit, and the more it should be pursued.
It’s strange to think that just a few short decades ago email was a novelty. Today, founder and operator inboxes are flooded with messages on a daily basis — many of which come from your competitors. Standing out requires a special touch to show that you are paying attention, understand their space, and can help take them to the next level — even if they’re not quite ready to transact. And personalizing messages with recipients’ titles and company names is no longer enough.
Top firms looking to build rapport and make an impression must take it a step further and incorporate recent and relevant events into their outreach. This can be anything from a "congratulations on your new CFO” to a "sorry we missed you at last week’s conference" to a “have you noticed your top competitor’s latest acquisition?”. These types of emails are sure to catch top targets’ attention, but there’s just one problem: They are notoriously tedious to create and impossible to scale.
GenerativeAI (GenAI) gives dealmakers the power to craft highly personalized outreach emails at scale. Simply give a GenAI-powered Assistant simple instructions of how you would like the message to sound, or provide a copy of an email that worked well in the past. Then ask it to write a draft using recent, relevant details for a particular company, and quickly edit the output before sending. While it’s possible to use ChatGPT to generate these types of emails, it’s much safer and more accurate to use a GenAI solution that’s been purpose-built for dealmakers.
To learn more about what that means and how it works, check out this guide!
Research shows that trade shows remain among dealmakers’ top tactics for identifying, researching, and connecting with potential investment targets. Historically, harnessing conferences as part of your deal origination strategy meant attending all the big shows and meeting as many people as possible.
But showing up and wandering expo halls in hopes of running into a high-quality, transaction-ready opportunity simply is no longer efficient or reliable. That’s why smart organizations are changing tack and now using the power of in-person conferences to meet face-to-face and deepen their relationships with the right companies.
Using the latest deal sourcing technologies allows dealmakers to quickly and accurately pinpoint the conferences that will have the highest concentration of top targets, and are therefore the best use of their teams’ time. Some cutting-edge platforms are even able to proactively recommend the right conferences based on thesis criteria! From there, organizations are able to learn more about these companies, establish rapport, and schedule meetings with them prior to attending, making their facetime with them that much more effective.
Just like sourcing, monitoring the companies in your deal pipeline and current portfolio used to be fueled mostly by networking and word of mouth. While the rise of digital made it easier to stay on top of public businesses through their websites and news articles, keeping tabs on private companies that don’t publicly release much information about themselves is still a manual, time-consuming exercise — albeit one that can have an outsized impact.
Take, for example, Charles Shannon’s market map of 900+ businesses. “I want to know which company in my market map is hiring faster than others,” he says. This gives him a compelling reason to reach out and showcase his knowledge of the space, whether it’s to congratulate the growing company and pitch an intro meeting, or to highlight their growth as an FYI to a more compelling competitor.
Rather than hiring full-time employees to try to keep track of pipeline and portfolio companies, business development teams at Tenant Company and other leading organizations rely on technology to do it for them. The latest deal sourcing solutions can actively monitor private companies across millions of sources and alert dealmakers of key growth signals, like new executive hires or product announcements, in real time.
As Alan Stein Jr. said, “The basics are where the gold is. The highest performers I’ve ever been around in basketball or business have found a way to fall in love with the basics.”
Consistently examining the fundamentals of market mapping, deal sourcing, email outreach, conference planning, and pipeline/portfolio monitoring through the lens of the latest data and technology is sure to give dealmakers an ongoing competitive edge. Rather than getting caught up in market hype and uncertainties, focus on where the gold is: executing the basics with unparallelled effort, focus, and surgical precision — just like Kobe.
And remember, just because something is basic doesn’t mean that it’s easy. Fortunately, Sourcescrub is here to help. To learn how dealmakers at Tenant Company and other leading organizations master these five fundamental jobs to be done, read this guide, “Human in the Loop: Strategies to Partner with AI and Drive Real Results.”
