The Age of Hyper Partnerships and Ecosystems: An Interview with Sarbjeet Johal
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.
Sarbjeet Johal was a programmer before shifting to leading partnerships at companies like Oracle, Commerce One, and Rackspace. He shared a strategic framework for designing a partner program, how the partners you choose reflect on your brand, and why this is the era of hyper partnerships and ecosystems.
How did you get into partnerships and alliances?
I originally studied business. I did a masters in economics and was working with a think tank in India for a couple of years. When I moved to the United States, I started working as a programmer at AT&T. My goal was to finish my Phd in economics, but I had a lot of success as a programmer.
After AT&T, I went to Visa, and then moved to tech companies. After VISA I joined a company Commerce One, a darling of the dot com days. I learned a lot from that IPO.
I then worked at Dell EMC, VMWare, Rackspace, and Oracle. While at Rackpace, I was in the process of building a Cloud Center of Excellence for them as Oracle hired me to do the same for them, although they ultimately decided they were not ready for that much cloud.
After that, I founded an incubator in Berkeley that has helped over 100 startups, and I worked with 3 different startups as a sweat equity partner.
So, in tech, I started as a programmer and then moved to customer facing roles and then pre-sales roles. I did a big chunk of partnerships and alliances work at Commerce One, Rackspace and Oracle.
What was your role in partnerships?
At Oracle, I sat in the middle of marketing, product, and sales when I was building the Cloud Center of Excellence. A key part of that role was building new partnerships and alliances and strengthening existing ones.
My role was to work with our partners and integrate them into our ecosystem. We started integrating them with Oracle Sales Cloud, and then Oracle Marketing Cloud. Oracle has a presence in almost every vertical. It is an applications, database, and platform company, and I had partners in all these different buckets.
We wanted to bring emerging companies into the Oracle ecosystem. I hooked Zoom up with Oracle Sales Cloud, for example, and now Zoom is one of the biggest consumers of Oracle.
We were mainly competing with Salesforce and we wanted to be at par with the Salesforce AppExchange. We were recruiting partners pretty aggressively to join OPN (Oracle Partner Network). So my role was of a business architect orchestrator keeping technology synergies in mind.
What were your KPIs in the partnerships role?
We were playing a numbers game so one was how many new partners we could bring in. Business folks had sales side quotas in terms of how many sales they were making with partners.
Those things are hard to measure to be honest. Sales enablement is hard to define and to track. We tried to measure it by doing a data analysis across accounts. Accounts were growing 20 percent before partner involvement, but 70 percent after, for example. At the macro level, you can judge the effect of partnerships on sales and upsells. All in all I am a big fan of OKR vs KPIs.
Do you have advice for others who are looking to grow their tech partner program?
A key part of doing partnerships successfully is being very clear on what you are trying to accomplish.
You have to know why you are investing in partnerships as they can be beneficial to a company in a wide variety of ways. Once you establish your overarching goals, you should create a framework for understanding which partners will best help you reach those goals.
I think it is helpful to understand the core decision as deciding whether you are trying to improve your capacity or your capability.
Partnerships ultimately need to drive more revenue for the company but it can do it in either one of these ways.
For example, if you are competing with Amazon in cloud, and you are trying to come across as a fuller solution, then bringing in a partner can enhance your capabilities as a product offering. If you are looking to supplement the work of your sales, marketing, or professional services teams, then partnerships can be a way to enhance your teams’ capacities.
Examine whether you are primarily trying to increase your TAM, improve your brand equity, expand your workforce, or enhance your product capabilities.
Once you understand your goals, you have to create a process for selecting partners. Most often there are many players in any one product category, and it is important to think about why you are choosing to align more with one company.
Is the brand affinity the same as yours? Are you trying to enter a new geographic space? Are you trying to augment your sales workforce and so need a partner who will invest go-to-market resources? Or are you looking to enhance your product in a particular way that the company can accomplish?
When I was at Rackspace, for example, we did a partnership with EMC and Accenture because we did not have enough people to service our own products.
How do you see the partnership landscape evolving?
Every big company has their own personas, their own personalities, and they behave differently just like we humans do. Some companies will never do a big acquisition or partnership. Because of their culture and ethos, they will always go with the smaller players when they are just emerging and they will be reluctant to do big partnerships.
AWS, for example, never does any big acquisitions. But they keep doing smaller acquisitions and talent acquisitions. Their best acquisitions are done early on with companies growing at a rapid pace.
For larger companies, it can be an asset to partner with smaller companies that have good flow. The smaller companies can have powerful narratives in the market, where they are creating the tailwinds. Zoom, for example, has a good presence and narrative right now.
People are realizing that partnerships can be a compelling way to enhance your brand. Partnerships show your intent and identity as a company. When you partner with someone, you are aligning with your partner. It’s like how people draw conclusions about who you are based on who you choose to be friends with.
Being in an ecosystem is essential and will only become more so. But most often there are more available partners than resources to support those partnerships and companies will have to become more intentional about who they partner with and why.
What’s your advice to smaller partners who are trying to get the most out of their partnerships?
Today, there is no way you can succeed alone in the B2B world. Small companies have to invest in partnerships, but they have more limited resources to do so.
For smaller companies, one of the biggest benefits of partnerships is alleviating the concern that business buyers have about vendor viability. This is a real issue in B2B sales.
The buyers may worry that you won’t be here in a few years. Partnering with larger companies goes a long way to assuage that fear. It shows that someone established and knowledgeable has done due diligence on you.
To become an OPN partner, for example, Oracle does due diligence to vet the partner and requires a fee. So when you become a partner, you can leverage that to raise your brand value and raise more money.
Don’t be reluctant to seek larger partners. You can use the names of your bigger partners to showcase your intent and demonstrate that you are serious about the business.
You should also try to form partnerships where the bigger partner invests money in your company. If they have invested, they will be more inclined to put you in front of their customers. The most successful companies here in Silicon Valley are the ones that seek smart money - money that results in partnerships and introductions to customers. Google Ventures, for example, will push you to succeed through Google customers. These types of multi-channel relationships can be hugely beneficial.
It’s also important not to spread yourself too thin. Don’t do more than two more partners in each product category at a time: mature those and then add more. You won’t have the resources to manage too many integration points and, if you try to do more, your integrations won’t be good and you will lose credibility in the market.
For the best ROI, joint marketing and sales campaigns work the best. You have to educate the market about your integration and create joint content with your partners. This builds brand equity and increases adoption and customer success. Sometimes companies spend a lot on the integration but do not spend enough on the go-to-market.
You should treat new integrations like new products. Have a launch plan and a communication plan. Apply the same principles you would to any new product, except include and leverage your partner.
Do you have any advice for ensuring different internal departments work well together to make partnerships work?
The walls between different departments need to be lowered, especially inside the incumbents. Typically, the older the company, the higher the walls become between departments. Plaque builds up as companies get older.
Your inter-department company communications should become a well-oiled machine. Think about how that can happen - if you already have a flatter structure, it will be easier for information to flow.
If your company is hierarchical, then it will be harder to communicate. Just look at what Conway’s law says: "Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization's communication structure."
I was at PeopleSoft, for example, and its structure was flatter and communication among departments there was great. Larger companies often prevent that. For example, they might prevent partnerships people from doing their own marketing.
At the end of the day, even in B2B sales, last time I checked, we’re still people selling to other people. Human psychology and empathy matters. Communication and openness to new ideas are key.
The best companies are the ones that have the best feedback loops. Feedback should pass from one division to one another, to partners, to customers, and to the broader market.
You want to work at a company whose leaders truly value communication and transparency, because those values are key to a company’s long-term growth and success. Without leadership’s buy-in, it’s almost impossible to achieve.
You should work to lower barriers to inter-departmental communications. This can be set up through shared data processes or regular meetings. If you can afford to, you can even have people temporarily join different departments so they can learn how that department thinks and then go back to their own team and share that knowledge.
How are partnerships evolving in an era of digital transformation?
This is the age of hyper partnerships. You have to partner like crazy. Most of the big tech companies are great at partnerships. You will see many high flying companies who are criticized for not being good partners.
You have to understand partners are a long term play. There’s an old proverb, “You want to go fast, go alone, you want to go farther, go with others.”
You can’t talk about partnerships without ecosystems. It is the age of ecosystems. You want to belong to an ecosystem. You can’t hang out alone and expect that someone will come to you. Now there are platforms, like Salesforce and Marketo, and meta-platforms, like AWS, Azure, and Google Cloud.
I would divide the tech stack into 3 distinct systems. First, systems of record, like ERPs and HR tech. Second, systems of differentiation, like marketing and sales software. Third, systems of innovation, which are newer breed applications, and that is constantly changing.
In order to be a system of innovation and what I would say is a true tech company, you need the infrastructure as a service. You need to be in the developer ecosystem.
You can build good differentiated systems on Salesforce, for example, but that is a 20-year-old company. How do you truly innovate on an old system? To do real innovation you need raw tech, not baked tech. To create a new recipe you can’t just mix up old sauces.
Cloud gives you agility. You don’t have to wait for service on your servers, you can pay as you go, and it enables experimentation. You can fail quick, fail cheap, and fail often. If you’re not failing, you’re not growing. Don’t let the pace of experimentation slow down!
So in Digital Era, on one side, make your vendors your partners, and on the other side, your customers. As I said earlier, it’s the age of hyper-partnerships and ecosystems. Be open!