B2B PARTNERSHIPS

[Audio] Welcome! My name is Lara. After two decades in large tech, I'm now working helping innovative and high impact companies scale. This is the first episode of my new series on key business topics, stemming from recurring conversations with founders. Business partnerships is also a topic I'm particularly fond of, as channel building roles are some of the most "fun" and rewarding I've done in my career. They're externally oriented, strategic, and focus on building long term connections. Let's jump to it. And of course, if you have comments or questions, you know where to find me and I'd love to hear from you..

[Audio] So the goal of this session is, in a few minutes, to share an overview of why partnerships matter to your business, help you structure your thinking, and identify possible ways to approach them. It won't be exhaustive, but hopefully will pique your curiosity and stir some thoughts and new perspectives..

[Audio] First, a quick comment on why many early-stage businesses are not considering alliances. Sometimes, there's simply no time for it, or it's not priority – which is in fact the same. Sometimes founders haven't explored the topic. Some want to win a few customers first, which may make a lot of sense if you're still working on your use cases and product, or want credibility. Others think they're still too small. We can get back to that, it's not necessarily a blocker but will change the type of alliances you can aspire to. Confidentiality concerns are also something I often hear about. Every case is different but on that one, I would tend to think real IP and innovation can be protected, and if your idea is too simple to clone, there may be other concerns. On the other hand, time to market may be of essence, and that's one of the things sometimes partnerships can help with. So that's a good time to look into why you may want partners..

[Audio] In a nutshell, partners extend your capabilities. I tend to think if it in four rough buckets : - partners who know the customer. It could be they're already serving your ideal customer, and have existing relationships with them or have their trust. These help you gain focus in your message, credibility, maybe even open doors for you. Market knowledge is more broad – for example, the partners know an industry well, or have a presence in a market where you are not. These partners can give you speed to market and reach, and ensure you are focusing your efforts where you can win. I use technical knowledge in a broad sense – it could also refer to the legal constraints of operating in a regulated industry, or the ability to deliver a service effectively. In fact, if technology is a core component of your product I would probably advise against outsourcing your own technical development too much, as you want to retain your IP and what makes you unique. There are of course scenarios where I've seen it work well. You may also want to change some of the conversations with your providers, considering them as partners and having more of a dialogue, so it could be a rethink of some of your existing relationships. Not least, you could consider partnering where someone else can do something you're doing better than you. Many large companies work with integrators not because they need to, but because it's more effective to share the benefits and be able to scale, than to compete with everyone. When I engage with a new client, I like to ask them who their competitors are – then review that list looking for opportunities to partner..

[Audio] This view is the natural continuation of the previous one, and helps think about the different ways you can engage based on the value each player is bringing. Life isn't as clear cut so you may have a reseller who also offers, say, technical support. But it helps us think about how to approach things. For example, you may use a provider as a white label service. Or decide having such a well respected supplier or working with the best Cloud security standards is key to your value proposition. If it is the latter, most likely it's because your customers respect them – which may change the way you engage and build your relationship with them, and influence what you're willing to pay. You'll also notice I've added a couple of surprising partnerships. Customers is an interesting one – at Microsoft I have seen customers become partners once they had developed their use case. Think of a customer with global offices, or who is using your solution in an unexpected way. Or at who could be willing to purchase your solution on behalf of someone else. What opportunities do you see? Public bodies isa generic term, but embassies often player a role in helping start-ups in new markets, and associations can also be good allies. It won't work for every business, and must be put in the perspective of your priorities, but it is worth assessing your options..

[Audio] Now here are some of the questions I would ask. Most are self explanatory, however many are not as easy as they seem. Often both parties will have an interest in managing the relationship with the customer. Starting with the customer experience – where they will get support, and would they prefer only one billing – can be a good starting point. You will need to agree on who does what – for instance, if a lead is transferred, what are the criteria it must meet. If a partner is referring leads to you, how long will they get a commission for? Paying an upfront referral fee might not be advantageous if you sell Software as a Service or services that are pay-as-you go, but offering a percentage for too long is also complex. In software, the standard is probably one year. Many partnerships fail because the company leaders see the benefits, but individual frontline sellers are not adequately compensated, or simply lack the understanding to position the new offer. Consider the sales and technical training and support your partner may need. And of course, keep an eye on any risks – including reputational. This is also true in reverse. And it could be a hurdle for start-up, as your partner may want to check your long term financial viability before engaging. There are ways around it, but to avoid wasting efforts it's important to assess your counterpart's perspective well. I remember once in Latin America my team spent six months engaging a local partner, only for the deal to be put on ice by the partner's global head office. Better due diligence on what was happening on the other side could have saved us time! And remember, the scope doesn't need to be uniform. You could decide to sell direct in your home market, have multiple resellers in the EU, and let one of them have the exclusivity and run on their own in the Middle East..

[Audio] Let's talk about shaping your plan. It always starts with your business goals, current differentiation, capabilities and constraints. Capacity is an important one – any time you generate demand for your services but cannot deliver, maybe because you can't serve that market or your team is overloaded already, you may be generating demand for something or someone else. Assessing your target customers and markets is a good way to go, because you can spot markets that are relevant but not addressable, for example too small to reach profitably, or regulated. You can then build an overview of where you want to play, and where you want to engage partners. There's really no one size fits all. At times, you may want to partner with an incumbent, so they can get some of the value you generate, but you get to enter where you can't compete. Other times, nothing better than beating your competition in market share or a key deal, to convince them to engage with you. Too many companies create elaborate plans or spend time discussing partner fees too early. Doing some market listening is essential – whether it's from your own ecosystem via 1:1 or focus group conversations, industry experts and data, advisors or even prospect partners. Be realistic in assessing your resources and what the partners will need to succeed in contributing their part of the deal. And have mutually agreed KPIs that will allow you to step out or focus. Remember, defining your KPIs may well be part of your program. When I launched Microsoft's partner program for Cloud in Latin America, we didn't have a clear view of how many partners one seller could manage, and how long it would take to get them ready. Part of my mission was to establish those KPIs and build the business case. I'd also add – only work with partners you're comfortable with. Partnerships are long term deals when everything goes well, so make sure company values and ways of working match, and there is mutual trust and open communications..

[Audio] So this is it for me for today, I hope this short overview will get you interested to explore some new ideas and opportunities. If you're intrigued, but not sure you have the bandwidth or skills in your team, here's a slide I borrowed from the Portfolio Collective, where I'm a founding member, on why looking for contract or fractional talent may help. I'm happy to talk about partnerships, or any other go to market question you may have..

[Audio] So this is it for me today. If we're not connected already, please do find me on LinkedIn. I work as advisor and fractional executive with SaaS businesses, and am particularly passionate about agritech and green tech..

[Audio] Thank you for listening. I very much welcome your feedback on how to keep making this series better, and would love to learn about your business and challenges..