DEAR STAGE 2: In the last quarter three distributors have come to us about partnering, including one so large it could be our whole business if it lands. We're early on GTM. Founder-led sales and nobody on the team has run partnerships. All three of these feel like a good fit. Where do we focus, and how do we know a partner is real? ~WHALE WATCHING
DEAR WHALE WATCHING: Inbound partner interest feels like validation, and it can be just that. But…if “good fit” describes all three of your options, you need a way to differentiate, pick and place your bets. Kudos to you for starting with the focus question. Too often we see companies try to serve all inbound partners and wasting precious time and resources.
This week I’m joined by two Stage 2 LPs who have built their careers in partnerships: Corinne Bartow, Head of Channel Partnerships at Alloy and Graham Collins, VP of Partnerships at QuotaPath. Read on for their advice…
Reframe the question
Corinne’s first reaction was to reframe the question. Rather than taking all inbound interest at face value, ask “who’s really going to move if we invest in the relationship with them?” She recommends watching behavior, not enthusiasm (actions speak louder than words anyone!?). Exploring each option makes sense and allows you to see how serious they are. “If there’s work for them to do, are they assigning people to do it? Are they pushing it off? Are they making an actual investment, or letting you do all the work?”
Graham experienced this first hard (and has some scar tissue). “I’ve had more bad partnerships than I’ve had good partnerships, and the uniting theme around the bad ones is I care more about the relationship than they do.” If you care more than they do, the partnership won’t succeed, even if the fit seems perfect, so get aligned early.
Co-author a one-page plan
Corinne is a big believer in alignment and specifically, a written co-authored joint business plan.
The document itself matters less than what agreeing to write it tells you. “I don’t believe if you write down the business plan and they nod their head that that means anything. And if they’re too aggressive taking the pen, you’re probably leaving something on the table.”
Graham calls it “a litmus test for whether they care about you or not. Are they willing to spend an hour going through the exercise of brainstorming and writing with you?”
This isn’t a novel, it’s a list of commitments and you should strive to keep it short. Corinne shared examples of what might be included: “We will meet biweekly and we will look at these six measures.” Are we building pipeline? Is the joint value prop resonating? Do we know how to get a pilot to the next stage? Who owns what? An IBM alliance plan might be 60 pages. Yours can (and should!) be one. In her experience the partnerships that go sideways are the ones that skipped this step, or wrote it once and filed it away never to be reviewed again.
Start small
Now for that potential whale partner. You have to put a price in the risk of investing your time and resources. Corinne said “It can be what makes the company, but it’s high risk and highly absorbing of your time.” Managing four or five layers of a giant partner’s org with no partnerships person means you are taking real time away from running your own business.
Her advice: “Small bites. Prove out your model for what works, because your first economic model is probably not going to be what you’re doing in a year.” Start with the partner whose field team is already doing the work and wants your product as a tool to do it better. It’s also helpful to remember that partnerships amplify a motion that already works, so any effort with partners should be pointed at the buyer you already know how to win.
One exception. If someone inside the big partner wants this badly enough to run the internal navigation for you (and you trust them), then it might be worth it. But that person really needs to be doing the work you can’t staff.
Don’t hire a VP of Partnerships yet
Tempting, but wrong for this stage. “You’re not going to hire Graham or me to come run this business,” Corinne said. “At this point, you’re in a sales stage.” If you hire anyone, hire a seller with a partnerships mindset. The program builder comes later, “when you’ve got four or five of these going and you want to turn it into a program.”
Pick the partner that’s already doing work, write one page together, and revisit it every two weeks.
Until next week!