October 1, 2020
When startups consider go-to-market options and are planning their market rollout, companies are typically facing several options. Initially, most startups will pursue a direct sales approach validating the market and confirming a product-market-fit. However, as scaling the company’s sales becomes a key focus, an alternative or complement to expanding the sales team may be considering a channel partner strategy. Partners may extend reach into market segments where the startup doesn’t have expertise or simply accelerate customer acquisition. The partnering option applies to B2B and B2C businesses alike. While both direct and indirect sales strategies may result in driving a successful market rollout, their implementation requires significantly different strategic and operational decisions.
Having worked with hundreds of startups over the years, I found that especially B2C startup founders tend to display a strong bias towards a direct sales go-to-market approach. This preference is typically not rooted in deep analysis, but comes as a result of limited insights, lack of B2B engagement experience and the intuitive impression that the B2C route will be easier to navigate. This is in direct contradiction to the notion that acquiring customers “in bulk”, i.e. through a trusted 3rd party with an existing relationship, maybe an important success factor in scaling the company’s customer base.
Getting partnerships right and boosting a startup’s go-to-market success is not a simple process. However, it does pay to take a closer look at this option. At a high level, two specific considerations warrant special attention.
The Benefits of Partnering
A startup needs to evaluate the benefits a successful channel engagement may contribute to its market success. This evaluation is framed by the specific product or solution and its value proposition, the complexity of the sale, the sales cycle, the typical deal size and other success factors that determine the leverage a partnership approach can create. Typical benefits include:
Leveraging the established market position of a partner to promote and sell the startup’s products and services will accelerate its time to market. The partner may offer instant access to an existing customer base and a pipeline of prospects. The channel partner may be motivated to position the startup’s innovative solutions thus enriching their product portfolio and expanding their own business. Such a partnership may significantly lower the startup’s barriers of market entry.
In a joint go-to-market partnership, existing and experienced sales resources become available to the startup (“more feet on the street”). The company will leverage the larger and experienced sales organization to sell its solutions to potential customers. This presents a significant expansion of the startup’s own sales resources and capabilities.
Associating the brand name of a larger, more mature channel partner with the startup’s product will instantly inject a level of trust and credibility into the sales cycle. These sentiments don’t typically exist with the product of a new market entrant and would need to be built over time. Leveraging a partner’s trust and credibility therefore presents an instant competitive advantage vis-à-vis other emerging players.
Key Requirements for Successful Partnering
While these and other benefits are attractive, a startup that aspires to leverage a channel partner needs to have certain pre-requisites in place to enable a successful partner engagement. These requirements need to be well-understood and meeting them will ultimately determine the right timing to pursue a partner strategy.
Such key requirements include a partner strategy, i.e. a thought-out plan to identify and engage possible partners, the willingness to commit resources to the partnering initiative, an understanding of corporate culture and awareness of decision-making processes in large enterprises, a set of realistic expectations, and a level of organizational maturity that supports successful partnerships. These and other pre-requisites are critical success factors that may make the difference between partnership success and failure.
Startups that are considering the pursuit of a channel partner strategy should seek out an experienced advisor that can provide initial guidance and extend further decision support along the partner recruiting process as well as the execution of the joint market rollout. An advisor may also provide valuable insights into maintaining and expanding a beneficial business relationship.
Yabusame Partners regularly supports emerging technology companies with GTM planning and execution and is available to discuss and structure a collaboration model tailored to our client’s needs. Please reach out to email@example.com to discuss your business objectives in detail.
September 1, 2020
The Armenian Virtual Bridge (AVB) Accelerator is a pioneering joint initiative between the Republic of Armenia's Ministry of High-Tech Industry and the Armenian General Benevolent Union (AGBU) Silicon Valley Chapter. AGBU is one of the oldest and largest Armenian nonprofit organizations. The Government of Armenia has designated AGBU to execute the AVB accelerator program by entering into a close collaboration with Silicon Valley Ignite (SVI), a Sunnyvale-based ecosystem that offers a one-stop destination for all resources required to launch and grow a business in Silicon Valley.
The AVB accelerator aims to facilitate market launch or business growth for Armenian startups via educational programs and mentoring. The program is designed to equip entrepreneurs with technical and business development expertise, as well as soft skills. Their interaction with domain experts and their presence in Silicon Valley will enable these entrepreneurs to tap into the Diaspora’s extensive network for strategic introductions as well as facilitate fundraising efforts. The aim for the first cohort is to accept startups that have either created a prototype or have released a product or service (in at least one market), and at this time, are planning to expand into or grow in international markets.