App Marketplace Benefits: With Stripe, Wix, Aircall & LeagueApps
At our November 1, 2022 event hosted by the SaaS Ecosystem Alliance, a panel of thought leaders well-versed in marketplaces, partnerships, and alliances discussed the benefits of building and launching an app marketplace.
Pandium CEO, Cristina Flaschen moderated the panel which included Hugo Buret, Strategic and Product Partnerships at Stripe; Asaf Remler, Head of Strategic Partnerships at Wix; Bharat Chopra, GM, Connect and Design Shop at LeagueApps; and Ian Cugniere, Program Manager, Marketplace at Aircall.
What prompted the decision for your organizations to invest in implementing an app marketplace strategy (public and/or in-app)? How did your organization determine it was time to invest in this initiative?
Ian opened by explaining that Aircall’s decision-making revolved around the requests they were receiving from customers to aid in automating workflows. It was also a means of relieving their customer-facing teams of some of the “grunt work”.
It was a means of relieving our customer-facing teams of some of the “grunt work”.
“Two main reasons, really. The idea was really to scale the number of integrations and also, of course, the use cases we could address,” Ian shared. For that, the marketplace was the best solution, and it also gave our future partners the ability to build integrations via the app and API.”
Our customers started asking us, ‘How can you help me do this in a more easier fashion?’
Bharat explained that the decision to launch an app marketplace became clear when their customers recognized the value in the amount of data available within the LeagueApps platform, and asked for methods to utilize those robust data sets across other platforms and efforts.
“When our customers started asking us, ‘How can you help me do this in a more easier fashion?’ We built our API and at that point in time, a number of different companies were building integrations, where they were pulling the data from the gaps with the permission of the mutual customer,” Bharat shared.
“All those integrations were living on their products. We didn't have a lot of control, we didn't have a lot of oversight, and we certainly weren't benefiting from revenue share potential. That's around the time when Cristina was introduced to our CTO, Brian, and we realized we had a relatively straightforward and powerful wayto launch our integration center,” offered Bharat.
Hugo chimed in saying, “We already had a set of what we called Stripe extensions, which allowed partners to come in and develop and integrate with Stripe. We already had a base of a couple of thousand developers that were already surfaced there, but they didn't have a good way to market their integrations.”
Partner developers didn't have a good way to market their integrations.
“We launched the Stripe marketplace to be able to do this. We allow integrations to live in the Stripe dashboard. Those three things were kind of the primary drivers in terms of technical infrastructure, and then how to surface them in the right places across the Stripe ecosystem,” Hugo added.
SaaS companies can’t develop every need, feature, or use case internally.
Asaf explained that the decision was like that of any product cycle, often originating from the voices and needs of the users. Essentially the app marketplace is a means of recognizing that SaaS companies can’t develop every need, feature, or use case internally. He summarized the concept of an app marketplace as a means to leverage the power of the internet to create a one stop shop for customers.
Hugo added, “The key part here is to figure out where the sweet spot is as a platform. You could open the marketplace and obviously there's a lot of developers who come in and do many different integrations in different areas, but there's some areas they're going to work better than others. Identifying that upfront pretty early was a critical factor of success for us.”
Bharat expanded on LeagueApps approach, sharing that when they first started, we looked at the entire $75 billion sports industry in America, and broke it down into 44 different categories. Within each of those categories, they prioritized partners based on a few different criteria.
This criteria was based on revenue potential for them, and categories that would strengthen their core platform and solve problems that their partners needed solved. We also identified which categories they wanted to own and build ourselves.
In those cases, he shared, it just didn't make sense to dive into an integration partnership when they knew that was not going to be long lasting. They also deprioritized certain categories and looked at companies that he called “horizontal tech companies.”
These included companies like MailChimp, Google Sheets, or QuickBooks Online, for example, where those products fill needs and a different problem for them and their partners.”
Ian agreed with Bharat’s approach and added, “This is why we had such a focus on CRM at the very beginning, because the value was so obvious for all of Aircall’s customers. It was very easy to decide which category to focus on.”
Cristina then asked Hugo about how Stripe went about assessing and prioritizing tech partners and integrations given that Stripe is an API first product.
How did Stripe go about assessing and prioritizing tech partners and integrations given that it’s an API-first product?
At Pandium, Cristina works with many companies whose partnership ecosystem is maturing, advising them on figuring out their strategic partners, and was interested in hearing Hugo share their thought process.
“We want our ecosystem to be as open as possible,” Hugo shared. “Any developer really can come in and develop on top of the platform using the APIs that we have available. We did see a lot of traction in certain areas, more than others from the base of extensions that we had, and we dove in quickly into those as a primary vector of engagement.”
Asaf added, “The reason we (Wix) decided to go for up-market is that we are a global company, and we want to provide solutions. We want to make sure every Wix user feels like it's made for them.”
“By having APIs, you can work with local shipping solutions and local invoicing. This allows us to go global. Wix is a platform for any type of user, any type of business. It allows us to go global and to serve a lot of different types of users and businesses.”
“You're going to have apps that perform or extensions that perform a very vast amount of different types of functionalities. You will have extremely narrow integrations that perform one or two actions on behalf of a specific user. We even have some users building private apps for their own needs internally. Being able to cover all those different capabilities is important,” Asaf shared.
Cristina stated that she has noticed a philosophical shift from 15-20 years ago, where every software company wanted to build everything and wanted to be excellent at everything that we do. Now, she’s noticed that SaaS is swinging hard in the other direction, which is to get really good at a specific set of things, and then partner with companies that are complementary in areas they don't want to be an expert in.
What are some of the positive outcomes that you have experienced by implementing an app marketplace?
In this section of the conversation, panelists pointed to positive outcomes such as:
Increased revenue from partnerships
Increased customer satisfaction, retention, and stickiness
Enhanced platform capabilities
Increased integration adoption
Decreased churn rates
Ian opened the conversation with the impact of app marketplaces on revenue. “I love the revenue metric particularly because in North America, more than 50% of our revenue is driven by partnerships, not just influence.”
Ian clarified, however, that while they are excited about the revenue that partnerships have brought in, the focus for them has been to fill gaps for customers organically.
Ian also went on to explain that the app marketplace has raised the degree of “stickiness” with customers. In other words customer retention is directly driven by platform integrations. He also pointed to increased brand awareness as a function of a marketplace.
The app marketplace has been a means of strategic expansion.
At Wix, Asaf shared that the main outcome they have noticed is in the area of user retention. He went on to say that the relationship between user churn and integrations is complex, but they do know that users churn because of a lack of specific integrations.
“We have to constantly be in conversation with our head of product and understand what users need and what impact each and every request has. Then, we prioritize,” he expanded.
He added that the marketplace has been a means of strategic expansion by allowing partnerships to create competitive pricing models that use complementary products to fulfill customer needs while creating strategic advantages.
More than 50% of our revenue is driven by partnerships, not just influence.
Hugo noted that for Stripe, having only launched their marketplace a few months ago, they were primarily focused on enhanced platform capabilities and stickiness. He also noted that they were more likely to focus on and note more positive outcomes as their marketplace matured.
Bharat discussed LeagueApps’ focus on the length of time it took to launch an integration. As time progressed, they evolved to measure adoption of integrations. They’ve seen integrations cause further reduction in their churn rates and are working toward further tracking and understanding attribution and new customer acquisition.
Hugo offered an approach of “phasing and then nurturing what you have, in terms of categories and apps first” along with incremental improvement.
“I like the idea of having an ecosystem come in and plug into areas where your platform doesn't do a good job or doesn't have the right solutions. That's where we're seeing a lot of traction. It's a partnerships that allows you to scale in areas where you don't have an offering,” Hugo stated.
How has the launch of this marketplace changed your go-to-market activities? How is your sales team doing this? How are you marketing the marketplace experience?
Bharat started by sharing that, at LeagueApps, they spent a lot of time getting a few integrations built, making them effective, and doing internal training.
“We really held back on large go-to-market around our integration center until we had a nice portfolio that we were really proud to talk about,” opened Bharat. “It allows us to say that we have a bigger platform that solves more of their problems.”
Hugo noted that Stripe’s focus has been on startups and SMBs, which has caused them to focus on self-serve and enablement GTM activities. He explained that they will likely grow to pursue enterprise or growth segments in the future.
Asaf discussed Wix’s focus on marketing to professionals who build websites for clients, and so, they are enabling complementary products that add functionality on top of their platform in order to allow their customers to build a successful business.
Ian added his own focus on tracking long-tail partners, and making sure that they were also getting brand recognition from the partnership as well.
The panel concluded with questions from the audience about the importance of developer relations for launching and managing an in-app marketplace experience and using an app marketplace strategy to fast track growth.
If you're interested in hearing the full discussion, watch the full recording here, and apply to become a member of the SaaS Ecosystem Alliance to network with 1100+ product, partnerships, and engineering leaders working on building SaaS ecosystems.