Strategic Advice for Building a Partner Program: Interview with Ed Sullivan of PartnerReady
Nikita Zhitkevich lives in the world of partnerships. He leads partnerships and alliances for PartnerStack, which is a leading PRM and partner marketplace.
Nikita shared his insights on when you need a PRM, identifying your ideal partners, strategies to avoid channel conflict, and how he sees the partnership landscape evolving over the next 5 years.
Can you tell me about PartnerStack and what makes it different from other PRMs?
As a graduate of Y-Combinator, PartnerStack has been rooted in helping some of the world’s fastest growing SaaS companies scale. Companies like Asana, Monday.com, Unbounce, Intercom, and Intuit all use PartnerStack to manage and scale their partner programs, and onboard thousands of partners into our platform.
There are a few unique aspects to PartnerStack, which has led us to becoming the #1 platform on G2.
PartnerStack is the only solution that has both the PRM and a B2B focused marketplace that connects vendors with partners. On average, our marketplace drives a 30%+ lift in revenue for customers.
We are extremely focused on partner experience, which is a big distinction for us. Most PRMs are focused solely on the vendor experience. But if both sides of this equation are not having a good experience, then it becomes a problem.
And with PartnerStack, all of your channels can be managed from a single platform - affiliate, referral, reseller and ambassador. We see a lot of companies, agencies, and resellers choosing our platform to help them consolidate their channels into a single view.
How is your partnership team structured at PartnerStack?
Our team is still relatively young, as we launched it in April. The majority of this year has been building relationships and working with both agencies and resellers.
I lead the team, and we have an incredible Account Manager that works closely with our partners, as well as a partner marketing manager that works on any co-marketing efforts we run with partners.
Our partnership team is currently focused on two core areas:
First, working with agencies and resellers that are currently reselling SaaS vendors, bringing those vendors onto PartnerStack.
Secondly, working with agencies and resellers that are looking to shift their existing customers onto a modern partner management solution.
We often work with sales when one of their SaaS prospects wants to launch PartnerStack right away but doesn’t have the internal bandwidth. In those cases, we connect them with an agency partner who we know can do it right away and do it well.
Technology partnerships are also on our radar. We have recently built a number of integrations. One of our goals in 2021 and going into 2022 will be to further build out our technology partner program and our own integration marketplace.
We also plan to enter the app marketplaces of other SaaS vendors, especially CRMs like SugarCRM or Hubspot. CRMs are good partners for us because, with the exception of Salesforce, no CRM has a PRM as part of their product offering. So our software is complementary rather than competitive. And it benefits our customers to have those systems integrated.
“If you’re planning to scale your partnerships at all, you need the infrastructure in place to do this.”
What advice would you give for organizations trying to think through who their ideal partners are?
Ultimately, everything has to come down to revenue. Whether you’re pursuing referral, reseller, or technology partnerships, you have to tie them back to driving revenue.
Especially since you need the support of other departments in your organization, whether it is collaboration with the sales team or the product team to help build integrations, the benefit to the business needs to be very clear.
For agency and reseller partners, I would advise looking to see if they power similar products to yours. I’d also think about whether the partner will continue to evolve over time in the direction you are going and whether they truly understand your product and space.
For over a decade, Ed Sullivan led partnership teams at large companies like Salesforce and Publicis Groupe, as well as at early stage startups. Seeing how many seed to Series B startups struggled to successfully launch their partner programs, he cofounded PartnerReady, which provides fractional partnership leadership.
He shared his best advice for startups who want to fully leverage the partner channel, including how to begin, the best KPIs and timelines, strategic framing, team structure, and what to consider when scaling a program.
How did you get into partnerships?
I have been in the technology space for 14 years. I had a different career before getting into the technology world, but after getting here, I have had the good fortune of working in a field that I now love, BD & partnerships.
I have worked in several different situations in my technology career, from alliances at early-stage startups to playing in the big leagues at large, publicly traded companies like Salesforce and Publicis Groupe.
I have had a ton of fun during the span of my partnership career. It hasn't always been easy, but it has been gratifying.
In my early days, SaaS was a fairly new thing. Of course, SaaS is pretty commonplace now, but it was the early days of SaaS partnerships when I started. The types of relationships and the mechanics of how partners and channels could operate in this "new world" order of SaaS were all brand new to us in the space.
We had to grow and invent new ways of partnering very quickly. All the early SaaS partner practitioners tried many new things, which I dare say are becoming commonplace techniques.
Ultimately, we experimented with formulas on how to create interoperability between SaaS and On-Prem, then SaaS-on-SaaS. We also had to help evolve the methodologies of how the ecosystem of service providers could build new business models around SaaS tech.
The system integrators watched their cash cows dry up as clients moved from on-prem software over to SaaS. And agencies/consultants watched as clients shifted to more user-friendly self-service SaaS tools.
As a partnership practitioner, I was able to rise to executive levels in the firms I worked for, so I also have had a ringside seat during the SaaS industry's evolution. It's been fun and exciting, and I have had the opportunity to experience all the ups and downs that anyone entering the tech world hopes to experience.
About five years ago, my now co-founder and I were executives in the Publicis Groupe organization. In our roles, we had the opportunity to work with a wide range of technology companies (in the 100s).
We had a bird's eye view on several phenomena that we found baffling.
First, we noticed how poorly supported most partnership departments and teams were by their executives. Everyone was under-budgeted, under-valued, and under-appreciated.
This first phenomenon seemed to cause the second, that just about every partnership person had a chip on their shoulder. We realized that core executive leadership teams were not putting good faith in their partnership programs and thus neglected the partner teams and their efforts. As a result, accomplishing a partner team's mission was misaligned with the rest of the organization.
Add to this formula a "we make it here" mentality espoused by the standard Silicon Valley startup playbook. You know the one: direct marketing -> SDR -> Direct Sales -> Customer Success.
This "internally protectionist" playbook has left little room for partner professionals to have institutional trust and mandate from their leaders.
We observed that early-stage companies are very focused on product-market fit and direct sales. These companies lack the experience, patience, training, resources, or skills to do partnerships right.
Part of the problem has been that there is not enough mature, experienced talent to go around. Many young workers are growing up in the partnership profession now, which is fantastic to see, but there is a real shortage of executive-level partnership leaders who can operate in the C-Suite.
This shortage has left a big gap. PartnerReady fills the gap by providing experienced partnership executives to join the startup's leadership team on a fractional basis. The startup gets an experienced person to guide strategy but does so at a sliver of the cost of a full-time executive. It's the best of both worlds for the startup.
My co-founder and I took inspiration from the proliferation of fractional leaders in other SaaS executive roles like marketing and finance (fractional CMOs and CFOs). We realized that the partnership profession was equally ripe for this evolution, so we started the concept of "Fractional Partner Leadership," or the less commonly used "Fractional Channel Chief."
What do your clients and engagements typically look like?
Our clients typically range from Seed Stage to Series B technology companies and service providers. We have affordable offerings for the earlier Seed Stage companies, all the way up to full Fractional Leadership for the Series As and Bs. Essentially, in an engagement, we come into either a blank sheet of paper situation, or we find ourselves involved with a fledgling effort that needs fine-tuning.
Our core value proposition is to come in as "practitioners," not "consultants." As a practitioner, we are not just advising a company; we are putting our "hands in the soil" as if we are VP/SVP of partnerships.
Essentially we are an extension of the leadership team. We determine what the company's partnership, channel, and ecosystem strategy should be. We lay the groundwork for the partner program, including building the early relationships.
Then we spec out what the partner team and budget should be. Our final development stage is hiring and training the eventual permanent team that the client needs to run a successful program long-term. In the end, we turn the keys over to the client, often staying as a periodic mentor or advisor as required.
No matter the stage of our client company, we solve the chicken and egg scenario of providing expert guidance and execution for companies who need to evolve their partner program but cannot yet afford an executive full time.
What advice do you have for a SaaS company just starting their partnership program?
In today's hyper-connected technology world, few companies can survive in the tech/SaaS world on their own without interconnection with other technology companies, service providers, and influencers.
In our expert viewpoint, partner leadership is a strategically critical leadership role, whether fractional or full-time.
We see so many companies where the CEO or executive leadership team does not have the experience to create ecosystem strategies and don't know where to start.
Unfortunately, instead of seeking an expert leader as they might do with marketing or sales, they hire the wrong person for the wrong reasons.
We have often seen scenarios where the decision is to hire a brand new college grad with no experience to "test out partnerships" but keep the budget low. Or they decide to remake a failed salesperson that they don't have the heart to fire into a "partner person" to find him/her a "new home."
They throw these individuals out in the world to "do the partnership thing," which usually means "bring me leads" (but we don't want to spend any money). This person ultimately runs worldwide, creating many "logo" relationships but has little substance or generated revenue.
So my advice … DON'T do this!
Developing a partnership, channel, or ecosystem strategy is a STRATEGIC asset to the company, so hire a true professional. Either put the budget together to hire a full-time VP-quality person, an up and coming Director level (a "true" Director with years of experience), or hire a Fractional Partner Leader.
Please take my advice to treat partnerships as a strategy and not an afterthought, no matter what course you take.
How do you create real value in an ecosystem or partnership program?
We advise companies to start by creating a strategy defined by what we call the "Value Chain of the Customer" or "VCOC."
The first step in the VCOC analysis is to put yourself in the shoes of your ideal customer. To do this, you need to map out all the tools, service providers, influencers that they listen to, etc., that the customer uses to do their job. "How do they get from Point A to Point B?"
Once you lay out this ecosystem, you can then put your product onto the map. Who's around you? What technologies touch yours? What service providers help the customer in your sphere of influence? Etc.
Now you have the start of a roadmap for yourself.
With this map, you can start to identify companies that you might be able to work with. At this point, the critical part comes in, finding "mutual value" with potential partners.
The word "partnership" contains the word "partner," which means it is not a one-way street. You want to find relationships that have mutual value where both parties are willing to work together. It's a fine art to get this blend of aligned interests, but if you can get this formula to work, you will benefit yourself, your partner, and, most importantly, your customer.
My old boss, one of my mentors, always said, "I would rather have one partnership of quality than 20 'logo' relationships that don't do a damn thing." (He called the latter relationships "Barney" relationships... after the purple dinosaur, you know, "I love you, you love me!")
It is important to remember why you are creating partnerships in the first place: to serve the customer and sell your product to solve the customer's needs. He who has the biggest portfolio of partners does not always win!
What results and timeframe should leaders expect from a partnership program?
As mentioned earlier, partnerships as a concept are a strategy, not a "get rich quick scheme."
The same amount of care it takes to build a marketing plan and a marketing team, the sales motions, and the sales team are also applicable to partnership and ecosystem building.
Realistically going from a blank sheet of paper to a reasonably functioning team producing initial results is about 12-18 months. In our engagements, we educate our clients on a tried-and-true framework we use, which takes the client through 4-5 phases over 12-18 months.
The first three months is time to get your research done and get your blueprint laid out. You perform your Value Chain of the Customer analysis, figure out where you need to spend your time, think through your business mechanics, and get a solid foundation down. This process includes talking to beta partners to see how people respond and how the arrangement is working.
For the next 3 to 6 months, you should go after high-value partners. Start by creating relevant buckets of partnerships. For example, you might break it down by co-selling partners, co-marketing partners, and technology partners or partners representing hubs of integrations (like CRMs, cloud platforms, ERPs, etc.).
We like to take these buckets and create a list of the top 5 targets in each of those buckets, intending to set up several prototype partners in each one of these categories. This phase is time to experiment and do many A/B tests to find value propositions and formulas that work.
With these prototype partners, you spend time developing the relationship mechanics. For technology partnerships, for example, you will be specifying out what you need to do from a technical standpoint and how to work with product and engineering teams. You need to figure out the sale mechanics with channel partners, how leads are passed to your sales team, or if reseller relationships are applicable.
As the partner leader, you might be doing this yourself early on, but you may have a manager or director focusing on one particular area or bucket if you have a small team.
It is reasonable to expect that in 3 to 6 months, you should have some base prototypes of what works and some early success stories. And between 6 to 12 months, you will have a small portfolio of functioning partners.
You will gauge what you can expect in returns from different partnership types, what your KPIs are, and you should understand what a good partner vs. a bad one looks like.
What software do you recommend for partnership teams?
After your early wave of partners, it is time to think about what technologies you need to scale. Ultimately you will need some pieces of technology. Early on, you do not need anything super sophisticated.
You can start with many disparate tools like Slack, Excel/Google Sheets, but those don't scale over time.
When setting up your tech stack, you will need to figure out how you will support partner training and enablement and ensure they have the right marketing and selling materials.
You will also be wise to set up clear communication lines and have communication vehicles to allow partners to ask questions and get some hand-holding if needed. You will need systems in place to scale these interactions.
How do you recommend organizations think about organizing different types of partnerships?
In my experience, I think it is essential to have a clear line of delineation between technology integration partners, go-to-market partnerships, and solution partnerships.
Tech integration partners are those who build interoperability between platforms.
The go-to-market (GTM) partnershipscould be the tech integration partners (for co-sell/co-market situations), service providers (consultants, agencies, SIs), or other channel partners.
And solution partnersare service companies that have built solutions around your platform. I make this distinction between these categories for a reason: how you measure the teams.
Your tech integration leader and supporting team need to work with your engineering and product teams and the partner's technical teams for integration partnerships.
The skill required for this particular role is about creating value through interconnectivity. These folks should not be expected to be experts in driving sales activities. Instead, the MBOs (management by objectives) should indicate the strategic effort on which this leader and team are judged.
The GTM leader and team specialize in co-selling and co-marketing and collaborate with partners to get referrals, close deals, or get resale sales done. It might start with webinars and thought leader pieces and then shift to tackling customers together or passing on leads.
Backend solution partners are another bucket of partners. As a SaaS company, if you cannot hire enough customer success people (due to budgets) or train people fast enough, having a stable of solution partners behind you is a way to scale customer implementations and launches. Partner teams that focus on solution partner development should be judged on MBOs indicative of this particular focus.
What's your advice for partnership leaders at early-stage companies?
When it comes to growing your partner business, it is important to support your partners. These partners are not there to serve you.
Instead, remember these are business owners or companies with their own strategic plans. They want to make a living or grow their company, and they have chosen you and your product to work with and offer to their customers.
If you do not support your partners and do not show them how they can make money by working with you, they will leave and find other ways to grow their business. Do not take partners for granted.
As you add partners, you need to scale up your sales enablement, partner sales support, and partner marketing.
In the early days of your program, many of these functions will be poorly defined, very haphazard, and not professionally developed. That's okay. But as you grow your program and partner base, it is essential to evolve your support and not neglect it. Yes, it is work, but it is an investment into the success of your partner program.
What are some lessons you have learned from partnerships that failed?
The truth is many partnerships go wrong. A lot of relationships are not executed well.
I see so many companies that fundamentally do not understand the mechanics of a relationship or why they have a partnership in the first place. Usually, the partner leader has poorly designed objectives, usually brought on by misaligned expectations from their CEO or executive leaders.
How do you solve this?
First, make sure your partners fit your strategy. Don't just sign a partner because it is convenient or because the CEO's buddy is at the other company, or the prospective partner is an easy inbound lead. Instead, look critically at why you are doing the partnership in the first place and what investment of time, money, and energy is appropriate. It is okay to say "No." (Even to your CEO.)
Second, understand what motivates your partners. If both parties to a partnership do not know what makes the other tick, then ineffectiveness and friction will occur.
You need to understand how you will both work together towards specific objectives and help each other. You have to engage in truthful and honest conversations with partners to ensure your teams' and your companies' interests align. Then hold each other accountable. You can't just sign someone and then walk away.
Finally, do not enter into a partnership if you are not on the same page. It's better to have a few collaborations that are delivering results than dozens that are not working. Leadership teams need to incentivize quality and outcomes over the number of partners. Even with affiliate partnerships, you need to understand both sides' motivations and profiles for it to work well.
What is your advice for those trying to scale a partnership program?
Once you have solid prototype relationships, you need to take these successful programs' mechanics and strategies and build good playbooks. You need to bridge from tribal knowledge into a more concrete process to train your people and find prospective look-alike partnerships.
Build best practices on your team - not just technical knowledge but the right approach and mindset. As a leader, it's your job to nurture and grow your employees. Junior partnership people don't necessarily understand what they need to do, and you need to provide examples.
I have always tried to lead with a servant-leadership mindset rather than a dictator mindset. You need an agile, flexible structure when you are running partnerships. Set the strategy and empower the people under you to execute on their own.
If a company can afford to, I recommend having distinct technology partnerships, GTM, and solution partner teams, as I mentioned before. Each of those teams needs to build specialized expertise. On the tech partnerships side, you need people to be technical enough to manage the relationship with the product manager and interface with partners' product managers, who dictate their product roadmap. I have seen partnership managers try to do both the go-to-market and technical side, and they were overwhelmed. Those two elements require different mindsets and skill sets, so if you can subdivide between two or three separate teams, it's a good thing.
As you scale, you have to figure out how you look and evolve different types of partners. It is critical to look at your results and the landscape around you every 6-12 months to see how you are doing. Is your program still doing what you intended it to do?
I worked with a client company whose partner program has been wildly successful for several years, but then they saw the program fall off a cliff, and it stopped getting results. It turns out that as their technology went through its maturity curve over a several-year timespan: the way their customers bought their tech, the service providers the clients used, and the tech stack all evolved and shifted, but this company's partner program did not evolve with the changes.
Relationships can become obsolete, so either retool the relationships or sunset those partners. If they do not see business from you, chances are they are going to be losing interest in you anyway. Over time you need to keep a close eye on the evolution of your product's customer journey - products evolve quicker than ever, and you have to keep up!
Any other advice for partnership leaders?
If you haven't caught the drift of my point of view yet, it is imperative to look at partnerships and ecosystem development from a business strategy perspective. If you are not able or willing to put in the strategic work, you are wasting your time, and you might as well find another profession.
And if you are interviewing for a partner leader role and the CEO or executive leadership team is unwilling to treat partnerships with the strategic framework needed, then say "no" and move on. Partnerships are not the "magic ATM machine" at the end of the hallway, and you'll save yourself the heartache and aggravation.
Many partner leaders get into ill-defined roles, have wrong expectations and unrealistic KPIs. To overcome this, these leaders get super-tactical, chasing anyone as partners and desperately trying to land deals. They run as fast as they can as if running hard will magically produce results. I have seen many people chase misaligned objectives and ultimately are providing value to no one. They waste their time and their partner's time. And guess what? They hate their jobs too.
If you're getting into a leadership role, you have to figure out what you're trying to accomplish and how you are solving the customer's problem. If you take the time to be thoughtful, it will mature your program. You have to teach your leadership team the value and effectiveness of partnerships and how that value is obtained for your company. Being a partner leader requires managing up sometimes. You are the CEO of the department, and you have to think that way. Ensure you have a strategic plan for success.