The Evolution of Partnerships: An Interview with Scott Pollack, CEO of Firneo
Scott Pollack has led partnership teams at companies like American Express and WeWork. More recently, he co-founded and runs Firneo, an invite-only community for partnership leaders to network and learn.
Scott shared why he felt like a professional ugly duckling working in business development, his advice for startups, why organizations should frame partnerships as creating value rather than driving revenue, and what larger companies look for in partnering with smaller companies.
What led you to start Firneo and what is its purpose?
For most of my career, I joked that I was a professional ugly duckling. I spent about 16 years working in business development and partnerships, split between large companies and startups, like American Express and WeWork. I was often surrounded by finance, accounting, sales, and marketing people, and no one was speaking the particular language that I was.
That professional isolation ultimately led me to found Firneo. Business development jobs didn’t exist 30 years ago, and it’s not necessarily a career you can study for or know exactly where you are going in your career path.
At Firneo, we are building a professional development community so we can learn from one another. We have created a space for business development leaders where they can get guidance and advice, and network with peers.
We are industry and location agnostic, and we have members from a wide array of industries, including media and entertainment, tech, and hardware.
There are three main reasons why people join our community. First, to improve their career path and to find new roles. Second, to explore partnership opportunities by networking with other people in partnerships who are also looking for partners. Third, to learn best practices, get new ideas, and up their game.
We are very much focused on creating a community and fostering deep relationships. The group is invite-only and that helps us to build meaningful connections. We used to have small group dinners in-person, but we currently moved that online.
How have you seen business development and partnerships evolve over the last decade?
Part of the challenge of business development has been the ambiguity of what it is. I actually hate that term because nobody knows exactly what it means. The role means different things everywhere.
I define business development as creating long-term value for the organization. Partnerships are a means to doing that.
In my career, I have been exclusively focused on strategic partnerships. But sometimes a business development role is more of a sales or growth role. This lack of clarity and defined career path is a challenge people in this role have had historically.
There is an opportunity for the field to give more definition to what the role is in all its functions. There are partnerships and alliances involving resellers, referrals, product integrations, and brands.
These can all bring incredible value, and as the field continues to mature, we can become more structured around what each of these roles do and where they sit in the organization.
Chief Revenue Officer was not a thing 10 years ago, and now it is a legitimized job title. It is an attractive career option for people who come from sales. Similarly we can create a pathway for partnerships people to become a Chief Partnership Officer.
Just as sales and growth are needed channels, partnerships is now a necessary channel too. Part of the onus on partnerships people right now is to demonstrate the value to their organization, and to create pathways that give structure to that and the role.
You defined business development as creating value not driving revenue. Do you think that is the better way to look at it?
Yes, I think that it is important to frame it as creating value instead of revenue. At the end of the day, a business must drive revenue, of course. But framing the goal of partnerships as exclusively driving revenue is very limiting in terms of what can be accomplished.
Revenue is the obvious reason for partnerships, but they can also create product, brand, and audience value. There are results that benefit the organization over time. Integration partnerships, for example, may not drive direct revenue but they do drive product value and that can result in higher retention and word-of-mouth referrals.
Limiting ourselves to revenue goals forces us to think short term. Product and brand enhancements might not result in new revenue next month, for example. But, in the long run, this type of value does drive revenue for the organization on a macro scale.
Most types of partnerships are not going to have the same immediacy as demand generation and sales. Partnerships can improve your brand equity and reputation, expose you to new audiences, and improve your product. Organizations should include these longer term goals in their KPIs. Sticking to short-term metrics borrowed from marketing and sales, like referrals and closed deals, sets an unhealthy timetable and the wrong expectations for partnership teams.
What is your advice to earlier stage companies thinking about launching into partnerships?
The first prerequisite is to define whether the timing is right to launch partnerships. There is a time when it is too early. Whether it is channel or technology partnerships, a prerequisite is that you already have people using your product and you know the value of it.
It is a risk to expand too early. Even if you can form partnerships, partnerships are established on certain value propositions, and if you pivot your own product and value, then you might have invested in partnerships that no longer work.
Finding this product-market fit will come at a different point for every company. In my career, this maturity would often coincide with raising a Series A. If you can raise a Series A that is a good signal that you have the core engine of a company that is working. Investors are vouching for your product-market fit.
Once you have a well-established understanding of your value, you should ask yourselves what value you could bring to partners. Why should they care? Whether this a one-off partnership or a program, what value do you have as a company that you can offer to partners?
Is your product disruptively better and can drive revenue or service sales for them? Can an integration to their product replace a missing feature for them? Having a clear value hypothesis is key to getting off on the right foot.
You also have to understand who they are, and work out your ideal partner profile. If you have a 5 million dollar opportunity, for example, Google or Microsoft might not get out of the bed for that. With larger marketplaces, you can use your own resources to build an integration and drive adoption, and that will give you the opportunity to validate whether you are creating value there.
What should companies think about when deciding which types of partnerships to focus on?
I would remember that different types of partnerships can often go hand-in-hand. It is usually better to avoid vanity partnerships that lack depth and are limited to a burst of celebratory PR. Those short-lived partnerships often involve a ton of effort getting the initial press release out, but after that initial euphoria, there is not much left driving the partnership.
The most successful partnerships require a commitment to a long, happy marriage. If you don’t have shared resources on both sides and a planned investment, many of the relationships will quickly fizzle out.
In my experience, multi-dimensional partnerships can be very successful. When I worked at Amex, which is a 150-year-old company, we did a partnership with Foursquare that delivered an incredible amount of brand value for both companies. The partnership was also a technology one, and based on a product integration.
The product integration allowed customers to get discounts when they used their Amex to check in on Foursquare. This was about ten years ago, and while the partnership might have driven some amount of revenue for both companies, the real value was in the branding. The headlines were incredibly valuable to both companies.
At the time, Amex was not known for being a sexy or tech-focused brand, and the partnership made it look more tech savvy. Foursquare was still early stage, and partnering with Amex gave it an incredible amount of legitimacy and credibility.
That partnership changed the trajectory of the Amex brand. Fintech was nascent at the time, and Amex replicated that partnership model with Twitter, Facebook, Uber, and other innovative companies. It was able to establish itself very differently in the market, and of course that ultimately attracts new customers.
In partnerships, there are many faces of value and these values often go hand-in-hand. Larger companies, for example, don’t really care about the revenue share a smaller company will bring to the table. But they may care about the brand, product, or audience value a smaller company can offer.
What is your advice for companies who are looking to scale their existing partner program?
One element that is easily overlooked in scaling is support for partners. When you get to a point of scale, you already have successful strategic partners and it is easy to ignore and not give real support to the partners who are just coming up.
You should create a program that has a structure that enables newer companies to be pulled up. Decide what the criteria and KPIs are to scout those companies and facilitate their growth in your ecosystem. Make clear that it is on them to put in the work if they want to progress up the tiers of your program.
Explain to smaller companies exactly how they can demonstrate their value. When you have a marketplace, for example, they might have to drive prospects and customers to their listing with marketing campaigns. But whatever criteria you have, share this with entry level partners so they understand exactly what they need to do to get to the next level, and what benefits they will see. Don’t just highlight already established partners.
The intention of a partner program is to really help create that long tail. If you define the clear structure and steps around your tiers, some smaller companies will eventually become strategic partners. But you need the right systems and processes in place so companies know how they can get your attention and are motivated to come up the ranks.
Any other advice for partnership leaders looking to persuade their organization to expand more resources on partnerships?
Building a successful partnerships organization requires two levels of buy-in from the top leadership team: first, they need to see the value of a partnership program sufficiently to invest resources to get it started. Second, they need to be bought-in to the fact that they may not see any tangible results for 1-2 years.
Partnerships are a long-term game, and it’s incumbent upon any partnership leader to make the case that there is a potential for a meaningful percentage of company revenue to come from a scalable partnerships program if the program is given what it needs to grow and mature. If you can’t successfully make that case and get that two-part buy-in from the CEO and leadership team, then you’re dead in the water.
But if you can earn the trust and patience of leadership, then partnerships can open a pathway to rapidly scalable and cost-efficient growth.
Any other advice for people thinking about entering the partnership roles from either a sales or product background?
I’ve seen people enter into partnerships roles from almost every imaginable background: sales, product managers, consultants, lawyers, military veterans, non-profit fundraisers, -- you name it. There is no defined career path for BD & Partnerships, which affords everyone an opportunity to build their own case as to why they can be a great fit for the role at a given company. The challenge is just in demonstrating how you are, regardless of background, a person who understands the value that your company brings to prospective partners and the value that prospective partners bring to your company.
The real fun begins once you’re in the role. There’s no textbook to read or playbook to follow in this role. The best way to learn and grow is to surround yourself with a community of peers & mentors who understand the work you do. That’s how you’ll create long-term value for your company, as well as your career.