Solve problems, help partners reach their goals – This is one of the most critical business development tasks. Partnerships never work when the benefits are one-sided. In addition to helping you reach your own targets, you really have to figure out how your proposal helps the potential partner reach their goals. Again, you would think this is a total no-brainer, but this does not seem to be the case judging by the large amounts of proposals that I get that are not really solving any of my company’s problems, or are so obviously mass-emails without any direct relation to myself or my organization. I consider these proposals to be spam and will refuse even reading those emails once I realize what they are.
Many startup founders are deathly afraid of building their own sales team. They default to channel partnerships to try and get distribution. Sigh. For those unfamiliar with the term, a channel partnership is when a person or organization sells products on behalf of another company. Partnerships like this can be great for both parties. But they also can also barely move the needle and be extremely time-consuming to develop. Here are a few things startup founders should consider when evaluating channel partnerships and whether this should be their go to market strategy.
In business development or sales, the biggest fish in your prospect pond are often what I like to call “arms dealers.” Arms dealers provide a related product or service to a group of fragmented targets. By selling to or partnering with an arms dealer, you can reach this group of targets in one fell swoop versus approaching individually. Hence, it’s typically far more efficient doing business with an arms dealer.
To build a long-term sustainable business, the best place to be is “just right” – useful to lots of partners but not so strategic that they are unwilling to rent it.
The idea is to create a number of BizDev 1.0 partnerships while simultaneously building and marketing a full service API. If you can do BizDev 1.0 with some number of (ideally high profile) websites and demonstrate that it is valuable to them (ideally quantitatively), you can then scale your service BizDev 2.0 style.
Let me start by saying that most channel relationships don’t work. Period. (Full Stop for you Brits.) I’ve seen way too many startups spend all their energy getting channel deals done only to find out that they don’t produce ANY revenue. Yet startups continue to pour tons of energy into a relationship that with the current structure will never work. This post is dedicated to explaining why channel relationships suffer and how you can improve them.
Almost every enterprise startup I’ve seen has a product that would solve a problem their prospective customers have. But that isn’t the key question. The key question is whether it solves a problem that is one of the prospective customer’s top immediate priorities.
If you sell a product direct to a customer – in person or on the phone – you need to understand what their pain points are and position your product benefits against those pain points.