Latest / Partnerships Unraveled / 103 - Scott Sacket - Leveraging Distribution and Improving Partner Time to Value

Transcript

103 - Scott Sacket - Leveraging Distribution and Improving Partner Time to Value · Partnerships Unraveled

• 0:07
  Speaker 2: Welcome back to Partnerships Unraveled, the podcast where we unravel the mysteries about partnerships and channel on a weekly basis.
• 0:13
  Speaker 2: My name is Alex Whitford and I'm the VP of revenue here at Chanext, and this week I'm very excited to welcome our special guest, scott.
• 0:20
  Speaker 2: How are you doing?
• 0:21
  Speaker 2: Very good?
• 0:22
  Speaker 2: Thank you, how are you?
• 0:23
  Speaker 2: Yeah, I'm doing very well, scott, very well.
• 0:26
  Speaker 2: Maybe it'd be great for our listeners if you could give us a little bit of information about who you are and where you've come from.
• 0:32
  Speaker 1: Yeah, so very excited to be here.
• 0:34
  Speaker 1: My name is Scott Sackett and I am the Senior Vice President of Partner Strategy at AvePoint.
• 0:39
  Speaker 1: I've been with the company almost 18 years in a variety of roles, but the last eight very much focused on building our channel, and prior to AvePoint I worked at a managed service provider for several years as well, and so channel's been a big part of my professional life.
• 0:59
  Speaker 2: So 18 years at one brand and then focusing in on channel, that's quite a transition.
• 1:06
  Speaker 2: One of the things that I find really interesting about the transition that maybe AvePoint have made was you geared, your product was very much geared towards the enterprise, but you made a strategic decision and convinced your CEO to head down market and target more SMBs.
• 1:22
  Speaker 2: How the hell did you come up with that idea?
• 1:26
  Speaker 1: Yeah, well, frankly, the world was changing right.
• 1:28
  Speaker 1: You know, we started as a SharePoint company and SharePoint was very much enterprise on-premise, large server farms, you know, deployed all over the world for the biggest companies to collaborate.
• 1:40
  Speaker 1: And then here came cloud and it really changed everything for not just our customers but for us.
• 1:46
  Speaker 1: It essentially democratized access to technology.
• 1:50
  Speaker 1: So what was inexpensive, right, large, expensive servers to buy, all of a sudden became very easy for small companies to gain access to.
• 2:01
  Speaker 1: So when things like SharePoint Online and M365 came out, we really looked at the market and realized well, actually, small businesses are now using SharePoint Online, they're getting access to this technology, and a big part of the market was really now not just enterprise, and we needed to develop a strategy in order to go after that market.
• 2:25
  Speaker 2: And so what's really interesting?
• 2:26
  Speaker 2: Strategy in order to go after that market.
• 2:27
  Speaker 2: And so what's really interesting and it's a story that we hear very consistently right Huge change in market forces huge change in product availability.
• 2:35
  Speaker 2: Getting your product right is one of the hard things, but picking the right route to market can be just as challenging.
• 2:39
  Speaker 2: Why did you decide to focus in on channel to help those and help drive after those SMB customers?
• 2:46
  Speaker 1: Yeah, you know we did a lot of analysis, right.
• 2:48
  Speaker 1: I mean, we were lucky that we weren't a new company.
• 2:52
  Speaker 1: We weren't sort of just trying to figure out product market fit and what would work.
• 2:55
  Speaker 1: We had an incredible business in the enterprise space.
• 2:58
  Speaker 1: What we really had to figure out was how we can start touching a different segment of market and we knew I mean right off the bat, we knew that we couldn't go direct to SMB.
• 3:10
  Speaker 1: It just wasn't going to work.
• 3:12
  Speaker 1: It then became more about well, what does that look like for channel?
• 3:16
  Speaker 1: What type of channel go to market?
• 3:18
  Speaker 1: Right, because there are a variety of different types of partners and ways you can do this.
• 3:22
  Speaker 1: And really we kind of just landed on an obvious thing which was well, let's just look at what Microsoft does, right, it seems kind of obvious In retrospect.
• 3:33
  Speaker 1: We are a huge Microsoft partner.
• 3:34
  Speaker 1: You know, we came from the SharePoint space and when we looked at their supply chain essentially how they worked with distributors, how they worked with managed service providers, essentially how they worked with distributors, how they worked with managed service providers it gave us an incredible roadmap on how we could ultimately attach to the services they were selling and make us relevant to the partners and the customers, ultimately, that we wanted to work with.
• 3:56
  Speaker 1: So that was really sort of the key finding there.
• 4:00
  Speaker 2: You sort of frame that in a really blindingly obvious way in hindsight right, Hindsight's always 20-20.
• 4:07
  Speaker 2: But I see so many brands who are built on an ecosystem right.
• 4:10
  Speaker 2: They've got a big attachment playing to Microsoft or AWS or whatever it is, and yet they choose wildly different routes to market, which to me always sounds really counterintuitive.
• 4:19
  Speaker 2: It sounds like you've managed to and you're reaping the rewards of sort of not just pairing your products but pairing your go-to-market.
• 4:26
  Speaker 2: Microsoft has traditionally done things extremely well with distribution.
• 4:31
  Speaker 2: Now, one of the real challenges and almost the reasons that businesses don't go after channels they go.
• 4:37
  Speaker 2: It's hard to find end users, but how the hell do you find partners?
• 4:41
  Speaker 2: Distribution can be a really powerful vehicle to help with partner recruitment.
• 4:45
  Speaker 2: How did you find that experience?
• 4:48
  Speaker 1: Yeah, so luckily, I came from a managed service provider who worked with distributors, so I had some comfort in knowing a little bit about how distribution works and what value it could provide.
• 5:00
  Speaker 1: But there were a lot of things happening in parallel.
• 5:03
  Speaker 1: Right, we were we were, you know, looking at this new route to market.
• 5:07
  Speaker 1: We were looking at managed service providers and we stumbled upon that same question Well, how do we recruit MSPs?
• 5:13
  Speaker 1: And once again, we really did a lot of analysis, looking at how Microsoft was going to market.
• 5:19
  Speaker 1: We understood that MSPs were essentially buying from these distributors and at the same time, we were understanding and learning about cloud marketplaces, right, and they all sort of happened simultaneously, which is really, I think, some good fortune in there, with CSP and the way Microsoft was investing in the channel.
• 5:41
  Speaker 1: And we said, ok, if we can refactor our technology to be MSP centric, so in other words, create an incredible product to allow partners to bring our technology as a service to their customer base, and we can partner with these distributors and invest in the integration, which many vendors were hesitant to do.
• 6:01
  Speaker 1: But because we were new to this space, we were very, very eager to win their favor.
• 6:07
  Speaker 1: We knew we can differentiate ourselves with the distributors, and then we would be, you know, maybe not first to market in this route, but early to market, and I think all of those different events happening around the same time allowed us to take advantage of the moment.
• 6:24
  Speaker 1: Right, and that's a really important lesson.
• 6:26
  Speaker 1: You know, if you see that opportunity, you have to take advantage of it.
• 6:29
  Speaker 1: If you delay or if you hesitate, you know someone else is going to jump at it, and so that really helped enable us to differentiate, which is really hard with distributors who sell hundreds of products.
• 6:41
  Speaker 2: What I find.
• 6:41
  Speaker 2: Frankly, I've learned a shed load from the hundred podcasts that we've recorded.
• 6:46
  Speaker 2: But there is one inuring sort of through point when I certainly when I speak to very senior people that deal with large global business and that is operational excellence is actually the key right, because you can have the greatest product or the greatest sales strategy or the greatest team, but if there is any amount of friction in processing or purchasing orders, you die right.
• 7:07
  Speaker 2: It's so painful and so it's funny now to hear like oh, api, ordering and marketplace we were, people weren't sure, and the thing I just hammer down is like just get it right and spend way too much time getting it right.
• 7:19
  Speaker 2: But get it right because, like you say, once you get a thousand msps, if there's a 5% friction point, it represents, you know, millions in lost revenue.
• 7:30
  Speaker 2: It's crazy the impact that it can have.
• 7:32
  Speaker 1: Yeah, and what's crazy, of course, is now that the hyperscalers have all invested in their own marketplaces.
• 7:38
  Speaker 1: We've been doing this now for seven or eight years.
• 7:41
  Speaker 1: We're very custom to working with them, understanding API integration right, having that workflow already built out and the automation on the backend to provision.
• 7:51
  Speaker 1: This is old news to us.
• 7:54
  Speaker 1: Many vendors are doing this for the first time and there's an incredible challenge for them to get to market and they're investing in consultants and outside their party companies to help them do this.
• 8:06
  Speaker 1: We're really good at it, so that early investment has paid off for us, because that's the way the market has gone.
• 8:12
  Speaker 2: Yeah, and I think the way the market will continue to go sort of the story I always share here is why the iPhone is so successful is because you have an app store right, and it's great.
• 8:22
  Speaker 2: All the apps work and as an end user, as a customer, I just get the best in class from all these unique, different vendors.
• 8:29
  Speaker 2: And finally, b2b is catching up with something that's existed in the consumer world for 20 years, right, and so that's where it's going and, given that it still works best for the customer, that ultimately will drive channel, and it's great to see people like yourself in the hyperscale is really driving that operational efficiency, because it's not just the democratization of product, which you touched on earlier, it's the democratization of go-to-market which now leads all these small MSPs to be able to hit and swing as hard as some of the biggest partners in the world, which is just awesome to see.
• 9:04
  Speaker 1: Yeah, it's an incredible turn of events, for sure.
• 9:06
  Speaker 2: Yeah, exactly so.
• 9:07
  Speaker 2: So that's how you're leveraging, or how you leveraged distribution to help you from a partner recruitment and enablement perspective, but that's a very different strategy, I imagine, to what you're now doing with distribution, now that you have a much mature, a much more mature business.
• 9:21
  Speaker 2: What are you doing now to drive success in distribution?
• 9:25
  Speaker 1: Yeah.
• 9:25
  Speaker 1: So, first of all, distribution is not for everybody, right?
• 9:28
  Speaker 1: I mean, I think you know that's one of the hard lessons you learn as you're building out routes to market.
• 9:33
  Speaker 1: It sounds really obvious.
• 9:37
  Speaker 1: Hey, they have all these partners at their fingertips.
• 9:39
  Speaker 1: They have all the data on those partners.
• 9:40
  Speaker 1: Let's work with distributors, but not all products are meant to be sold through distribution.
• 9:43
  Speaker 1: The distributors themselves would probably admit this in a moment of honesty, that they're not the right people to sell all types of products, right?
• 9:50
  Speaker 1: You know, having a product that attaches to one of the hyperscalers that they've invested a lot in is probably the best case scenario, right?
• 9:59
  Speaker 1: So for us it's a really ideal fit.
• 10:01
  Speaker 1: But today, now that we have more maturity and more investment in our distribution relationships, we've built out our team to really work side by side with our distributors.
• 10:12
  Speaker 1: One of the key lessons here is don't expect the distributors, now that your product is in their catalog, to just sell your product.
• 10:19
  Speaker 1: That is not going to happen.
• 10:22
  Speaker 1: So if you're a one person company and you think you're going to throw a product into a marketplace and it's just going to sell, it's probably not going to work.
• 10:30
  Speaker 1: We've built a team to enable co-sell and enablement for our distributors and our partners, right?
• 10:37
  Speaker 1: We know that.
• 10:39
  Speaker 1: You know, just getting the conversation is hard, right, and we use our distributors in many cases to open up those conversations for us.
• 10:47
  Speaker 1: But once they have those conversations, nobody sells our products better than us.
• 10:52
  Speaker 1: That's just the truth.
• 10:53
  Speaker 1: And so we use that opportunity to take our co-sell team to work with our distributors.
• 11:00
  Speaker 1: If we don't have funded resources and we do at many of our distributors we think they're key to evangelizing AppPoint to the many, many sales teams they have and really use the opportunity to work with them.
• 11:12
  Speaker 1: You know, don't expect them to do for us, and I think that's a major takeaway.
• 11:17
  Speaker 1: But ultimately, we set really firm goals internally on business that we're going to redirect from direct to indirect to them, right From you know, a direct sale to a partner who buys through distribution, and then we use that to build out our business plans and we say, hey look, we're going to provide X amount of revenue back to you, right from direct to indirect.
• 11:41
  Speaker 1: We want you to create this much value for us going forward and as we do that every year, that multiplier effect is tremendous, right?
• 11:51
  Speaker 1: So moving from a direct to indirect business actually has a lot of value for us in working with our distributors because we can provide a lot for them.
• 11:59
  Speaker 1: We're not just asking them to do for us right.
• 12:02
  Speaker 1: It's a real reciprocal relationship and that has been tremendous in building those partnerships.
• 12:07
  Speaker 2: Yeah, it's really funny because you know I've got a lot of friends and people who work in direct organizations.
• 12:13
  Speaker 2: I spend a lot of time evangelizing the power of channel and it's really funny because you'll hear stuff like LTV to CAC ratio, right when we're talking about direct sales and I go do you know, what's much better than ltv is partner lifetime value, because we get that one partner and we can continue to sweat that asset and sweat that relationship and it might be so much more work at the front end but at the back end you can really get it and distribution almost.
• 12:35
  Speaker 2: Is that by a factor?
• 12:37
  Speaker 2: right, because it's like oh, it's so much more work and my role previous to this around zoom's distribution strategy across the media, so very familiar with how much time it takes to get distribution right, but once it's humming it's a beautiful thing.
• 12:50
  Speaker 2: That sort of just continues to to be successful definitely awesome.
• 12:55
  Speaker 2: So one of the things that I think is really interesting about targeting smbs is you had to build a different route to market, but I imagine this on-premise enterprise product isn't just a seamless translation down into this really scalable SaaS tool.
• 13:11
  Speaker 2: So how do you strike a balance between building a great product and investing time there versus optimizing and building a great route to market?
• 13:19
  Speaker 1: Yeah, I mean so at its core.
• 13:21
  Speaker 1: Avepoint's a product company, right.
• 13:23
  Speaker 1: Like many of the great SaaS or just technology companies in general, it's founded by product and developers, right?
• 13:31
  Speaker 1: So these are people who are out there who really are very interested in solving problems.
• 13:35
  Speaker 1: Right, that's at its core.
• 13:36
  Speaker 1: So we never sort of lose sight of that to start with.
• 13:39
  Speaker 1: So you can't take things in silo, though.
• 13:43
  Speaker 1: You can't say great, let's build a great product first, then figure out how to sell it.
• 13:48
  Speaker 1: Everything has to be in parallel.
• 13:50
  Speaker 1: We were sort of lucky in this particular journey because we already had a great business, first-party product like SharePoint or even M365, right, we knew we had relevance to customers and partners.
• 14:07
  Speaker 1: What we didn't have was the right product market fit for that persona, right, that MSP.
• 14:14
  Speaker 1: So we had to spend time on the product side refactoring the entire interface to create a new pane of glass in the short term.
• 14:22
  Speaker 1: The long term, then we had to build more products that were even more relevant to them and at the exact same time, we had to have the go-to-market.
• 14:29
  Speaker 1: We had to couple them together, right?
• 14:33
  Speaker 1: So if we had one without the other, it would be like what's the point of building a great product if no one's ever going to find it Right.
• 14:42
  Speaker 1: The interesting part was, of course, I wasn't getting a giant sales team to do this Right.
• 14:47
  Speaker 1: This was almost like a business within a business.
• 14:49
  Speaker 1: It was a startup at AvePoint.
• 14:51
  Speaker 1: So we had this incredible enterprise engine running this big sales team selling to the biggest and best companies in the world, and I had to figure out, with really minimal resources, you know, how are we going to get this to thousands of smaller customers right, because this is all about scale and volume, and so we were almost forced to think about go-to-market strategy early and often for this to even work right, and so there's definitely a balance there.
• 15:20
  Speaker 1: But I also think that, because of this particular sort of time in our company and the problem we were solving, they were of equal importance and we had to do it in parallel.
• 15:31
  Speaker 1: And you know, sometimes I don't want to get lucky, but we were really well positioned.
• 15:37
  Speaker 1: You know I can't take a lot of the credit for, but we were really well positioned.
• 15:42
  Speaker 1: You know I can't take a lot of the credit for you know where we were in sort of the evolution of these Microsoft tools and where AvePoint was in our ability to help customers and partners.
• 15:50
  Speaker 1: It just took some slight tweaking right and some really firm sort of observing of the market and what others were doing and how we can do it, but maybe a little better.
• 16:04
  Speaker 2: So I love your humility, scott.
• 16:06
  Speaker 2: Right, you've called out, hey, we were lucky, or there's an element of luck.
• 16:10
  Speaker 2: But you know, you create your own luck, you create your own surface area.
• 16:13
  Speaker 2: So you were lucky in the the.
• 16:16
  Speaker 2: The recipe was at the right time, so, hey, we've got the right circumstances.
• 16:20
  Speaker 2: That's one part of it, but another part is then you've got to convince your CEO or your C-suite hey, I'm seeing this and we should iterate how our product works and how, uh, how, we need to invest in a channel team, and what are the, what are the mechanics and how much is it going to cost you?
• 16:38
  Speaker 2: I'm assuming you've built an enormous business plan to to validate that this is your hypothesis and it is a good idea.
• 16:43
  Speaker 2: We speak a lot on this podcast about getting C-suite sponsorship.
• 16:47
  Speaker 2: How did you make that happen?
• 16:49
  Speaker 1: Yeah, so I'll do a shameless plug for our culture, okay, um, you know AvePoint, which is not a new company.
• 16:56
  Speaker 1: It's been around over 20 years.
• 16:57
  Speaker 1: We are founder led and that is unique, right, especially in this day and age, especially for publicly traded companies.
• 17:03
  Speaker 1: And we've only been publicly traded for two and a half years, right.
• 17:06
  Speaker 1: So we were private for many, many years, with a founder led management team, and they are entrepreneurs at heart, right.
• 17:17
  Speaker 1: And that sort of spirit and culture really permeates throughout the entire organization.
• 17:21
  Speaker 1: And I say this because, to your point, you know, it's hard to get C-level buy-in.
• 17:27
  Speaker 1: They were really the ones pushing for change more than anything, right, they didn't necessarily have the details, right.
• 17:36
  Speaker 1: They didn't necessarily say go through distribution, refactor your technology for MSPs that's for us to figure out but what they knew for certain was we had to try something different.
• 17:47
  Speaker 1: And that is sort of the real juice behind AvePoint, that entrepreneurial sort of spirit, almost like the largest startup that you've seen.
• 17:57
  Speaker 1: So he was a partner in this very much.
• 18:01
  Speaker 1: So not necessarily someone I had to convince.
• 18:05
  Speaker 2: And do you see that almost as the same sort of mentality, that is, a product person Like, hey, we've got to iterate and try, and because no one's built a great product without building a thousand failures on the way that we ran down blind corridors, do you see that entrepreneurial spirit and that sort of product mindset really coming together and then embedding in the culture?
• 18:23
  Speaker 1: Absolutely, absolutely, I mean.
• 18:25
  Speaker 1: I mean I think you know product and technical people are different than business people, not better or worse, just different and at different stages of business.
• 18:35
  Speaker 1: You know you need different sorts of people, but they have an incredible ability to really reinvent themselves over and over again, and thus the company.
• 18:44
  Speaker 1: And so, to your point, there's a lot of parallels between people who build great products and iterate and also how they think about business.
• 18:52
  Speaker 1: And you know business needs to be refreshed.
• 18:55
  Speaker 1: You need to have a clean set of eyes every couple of years and think about your route to market.
• 19:00
  Speaker 1: And so you know they were able to do that and support it.
• 19:03
  Speaker 2: Unsurprisingly, given that I have a channel podcast.
• 19:06
  Speaker 2: I'm a bit of a business nerd and I'm hearing a lot of the same sort of through threads that people have written a lot about.
• 19:11
  Speaker 2: Steve Jobs say right.
• 19:12
  Speaker 2: Which is hey, great products guy, great marketing guy, great vision, and one 80 degree turns every 20 minutes.
• 19:19
  Speaker 2: Because it was like hey, this now can be done better and I know we've done it this way for years, but let's just bin that because this is the right way to go and, ironically, like I planned this, I didn't.
• 19:28
  Speaker 2: This is fully luck.
• 19:29
  Speaker 2: But that's how you end up with the app store right.
• 19:31
  Speaker 2: That's how you end up with the best in class piece that solves all the problems through the entire way.
• 19:38
  Speaker 1: Right, he just wanted to put PCs on desks, right.
• 19:43
  Speaker 1: But you know he knew business had to evolve and that's a similar sort of, I think, trend in great entrepreneurs, no question.
• 19:47
  Speaker 2: So one of the things you're talking about building a startup within a business.
• 19:51
  Speaker 2: Now, that comes with its own advantages, because you have backing and a bit of brand and maybe some money to really fund stuff.
• 19:58
  Speaker 2: But it also comes with challenges, because you have to prove success, but you're always going to be the step sister until you actually, you know, really turn into a butterfly.
• 20:07
  Speaker 2: To mix analogies what sort of runway did you give yourself when you started building your channel and how were you benchmarking?
• 20:15
  Speaker 2: Hey, I know, this is only $1 or I know this is only one partner side, but what were the primary KPIs that you were using to feed back into your C-suite that, hey, this is actually starting to work.
• 20:26
  Speaker 1: Yeah, great question and probably one of the more important parts of the process.
• 20:30
  Speaker 1: At the beginning of this, we looked at what success would be and we had to stay away from the typical metrics because it wasn't going to be what, you know, many channel people focus on, which is partner source revenue.
• 20:44
  Speaker 1: Right, we could not talk just about partner source revenue for a couple of reasons, but primarily, we're looking at the, you know, pull through of the SMB market.
• 20:52
  Speaker 1: So in the first year or two, most of your business is going to be really small.
• 20:57
  Speaker 1: No one's getting excited over $50 deals, you know, with, you know, minimal commitment, right.
• 21:03
  Speaker 1: And also, we were brand new to this.
• 21:06
  Speaker 1: We didn't have this established sort of partner community and ecosystem that was just going to feed us deals opportunistically Right, we weren't just going to luck into deals, we had to build it kind of block by block.
• 21:17
  Speaker 1: So what we decided to focus on, we built milestones at six months, 12 months and 18 months, right.
• 21:24
  Speaker 1: So we didn't wait years, of course, to see if it worked.
• 21:27
  Speaker 1: We built tons of Power BI dashboards looking at everything from adoption and user engagement and other sorts of telemetry, but we really focused on partner recruitment, right, really focused on.
• 21:39
  Speaker 1: Were we landing with these partners?
• 21:42
  Speaker 1: Enough to the point where they were transacting right, and were they transacting in the way we wanted them to transact right?
• 21:49
  Speaker 1: So we looked at that entire process.
• 21:50
  Speaker 1: We were recruiting them through distribution.
• 21:52
  Speaker 1: Were they buying the product through a marketplace?
• 21:54
  Speaker 1: Were they adding to those products?
• 21:56
  Speaker 1: Right.
• 21:56
  Speaker 1: But we really didn't worry about the dollar amount at the beginning because it was just about volume and market share, and that was really how we focused on it.
• 22:06
  Speaker 1: We kept it very simple.
• 22:07
  Speaker 1: We didn't overdo it, right, because you can overdo it with the amount of data that it almost becomes hard to tell the story.
• 22:14
  Speaker 1: You know, if our goal was market share, volume, smb, right.
• 22:20
  Speaker 1: Well, that's what we're focused on.
• 22:22
  Speaker 1: And what's the most important KPIs?
• 22:24
  Speaker 1: Pick three, focus on them, keep looking at them.
• 22:27
  Speaker 1: Obviously, you add on and you can tell other parts of the story as you go, but we wanted to be really, really focused and look, it worked.
• 22:36
  Speaker 1: We were able to see the amount of partners growing and then thus, if you add more partners, you're inevitably going to add more revenue.
• 22:43
  Speaker 1: It's just inevitable.
• 22:45
  Speaker 1: So I wasn't concerned about the partner resource piece because it was going to come right with the volume.
• 22:51
  Speaker 1: So we wanted to focus more on that first step and, yeah, everyone was on board with it.
• 22:56
  Speaker 1: We kind of all agreed at the very beginning.
• 22:57
  Speaker 1: This is what we care about.
• 22:59
  Speaker 1: And, to your earlier point, because we were a startup within a bigger company, revenue didn't have to be the only thing we worried about, right, we didn't have to worry that we weren't going to get paid if it didn't work.
• 23:11
  Speaker 1: But yeah, I mean, there was definitely pressure on us to show outcomes.
• 23:16
  Speaker 1: Right now, what those outcomes were is is sort of the question outcomes, right?
• 23:20
  Speaker 2: Now what those outcomes were is is sort of the question.
• 23:22
  Speaker 2: So I uh uh, you know, again, being a business nerd, I I once heard the Amazon play the game of decades, not days, and what that means is is they build for how is our business going to look in 10, 20, 30 years time?
• 23:36
  Speaker 2: And it gets them to make a very different type of decision.
• 23:38
  Speaker 2: But it seems to be this type of decision that you've made early on in this startup, within an enterprise business, because things like market capture even though it might be a $50 deal and they might churn after three months and that's nothing to get excited about it's probably not paying your salary.
• 23:53
  Speaker 2: But if we get loads of those and we build this massive foundation, then we know in three years time we're going to be doing extremely well.
• 24:01
  Speaker 2: I think that's a perfect encapsulation of decades versus days.
• 24:05
  Speaker 1: Yeah, we had this scenario when I first started this project, which was, essentially, we had one MSP and we were feeding them leads, but we only had like one, and everyone's like, ah, it's not worth the business, it's only 50 bucks.
• 24:20
  Speaker 1: A hundred bucks, right, we don't want to deal with this, we'll just give it to this partner and they'll convert it and it's great.
• 24:24
  Speaker 1: And we had this sort of light bulb moment where we said, instead of having one MSP where we're feeding leads to, why don't we just have 5,000 MSPs and they bring us leads?
• 24:34
  Speaker 1: Right, and it's, it seems, so obvious, right In retrospect, like some of these things.
• 24:39
  Speaker 1: But when someone said, yeah, why don't we do that?
• 24:42
  Speaker 1: Right, and it totally changed the trajectory of of that part of our business.
• 24:47
  Speaker 1: Um, and yeah, I mean there's, there's, you know, years and years worth of value that we're creating, um, by doing it.
• 24:54
  Speaker 2: But even that right, even the, even the framing of 5 000 partners, you know how long and complicated that journey is, and so what I so often hear people, especially when they're from a direct business is they think in quarters, right, they're thinking how do I hit my target next quarter?
• 25:14
  Speaker 2: Or maybe set myself up that I can hit 200 next year?
• 25:18
  Speaker 2: And what I, what I just advise, direct or indirect, is start to zoom out as much as possible and start to make decisions that mean in 18 months' time, life could be systematically different, and that's by aiming at something like what would 5,000 partners mean for us?
• 25:35
  Speaker 2: Well, that would mean an obscene amount of business, but then you have to build in a way that becomes extremely sustainable, build an enormous foundation so that then we can build up, and the irony is making operationally excellent decisions like onboarding, distribution and driving automatic purchasing.
• 25:52
  Speaker 2: Those are decisions that aren't to get five deals, that's to get 5,000 partners to enable millions of deals, and I think that's the genius of what you managed to deliver.
• 26:02
  Speaker 2: Yeah.
• 26:03
  Speaker 1: The operational component is so critical.
• 26:05
  Speaker 1: Every time you add a layer, you add complexity right.
• 26:09
  Speaker 1: So if you add a partner, you add complexity.
• 26:12
  Speaker 1: If you add a distributor who adds a partner, who adds a customer, you add complexity right.
• 26:15
  Speaker 1: And that is, you know, not to be undervalued.
• 26:18
  Speaker 1: As you build out a channel organization, you know, and I think any person who's built one knows, um you hopefully you start with the right mindset so you are starting it to build easily, versus putting in processes that are really hard to untangle later on.
• 26:33
  Speaker 1: Um, but yeah, it's, it's big.
• 26:36
  Speaker 2: What I, what I loved in your KPI uh chat is.
• 26:39
  Speaker 2: You said, um, we were talking about getting a partner on and measuring them when they got their first deal.
• 26:45
  Speaker 2: I, I, I sort of evangelize on this podcast that we should indirect businesses should learn a lot, much, a lot, from direct businesses, because they have all the metrics.
• 26:54
  Speaker 2: You just need to put partner in front of them.
• 26:56
  Speaker 2: And time to value is a thing that every customer success person in the world will tell you is important.
• 27:01
  Speaker 2: And yet we don't speak about partner time to value.
• 27:04
  Speaker 2: We don't speak about how long does it take to onboard a partner, train a partner, get them to market, get them to raise an opportunity, close their first deal.
• 27:10
  Speaker 2: Did you see that that shortened was a metric that you managing?
• 27:15
  Speaker 2: That partner time to value shrinking is a barometer of your channel program sort of becoming more mature, becoming better.
• 27:23
  Speaker 1: Yeah, it's interesting.
• 27:24
  Speaker 1: So we saw a couple of things help quicken the time to value.
• 27:29
  Speaker 1: Number one the marketplace helped quicken it.
• 27:33
  Speaker 1: People aren't cutting purchase orders, they're not waiting on provisioning and like, hey, you want a trial, buy five seats, right.
• 27:42
  Speaker 1: It's easy, it's simple.
• 27:43
  Speaker 1: And the other thing was because of the marketplace, we were able to offer more aggressive terms as far as commitment.
• 27:49
  Speaker 1: So we always offered minimum annual commitment.
• 27:52
  Speaker 1: Why?
• 27:53
  Speaker 1: Because it was costly to do business.
• 27:55
  Speaker 1: You have to send us a purchase order.
• 27:56
  Speaker 1: We had to close a deal on CRM.
• 27:58
  Speaker 1: We had to then request the license to be provisioned that.
• 28:00
  Speaker 1: We had to send out the license, right, there was a lot of effort to do that.
• 28:03
  Speaker 1: Now, all of that was taken care of on the partner side.
• 28:06
  Speaker 1: We had to do that.
• 28:08
  Speaker 1: Now, all of that was taken care of on the partner side.
• 28:09
  Speaker 1: We had to do nothing because we'd already built the integrations in right, so we didn't mind as much.
• 28:11
  Speaker 1: If you only committed to a month, right, then it also put the onus on us to make sure you had an incredible experience, right, we could focus on.
• 28:19
  Speaker 1: Are you getting value out of the product?
• 28:21
  Speaker 1: You know?
• 28:22
  Speaker 1: And that was frankly where we should have been focused all along, of course right.
• 28:25
  Speaker 1: Frankly, where we should have been focused all along, of course right.
• 28:30
  Speaker 1: So our time to value for partners really really quickened.
• 28:31
  Speaker 1: Also, partners have a lot of customers.
• 28:33
  Speaker 1: It's not just sort of this one-to-one ratio where you either win or lose, very binary.
• 28:39
  Speaker 1: You work with a partner.
• 28:41
  Speaker 1: They have a percentage of their customers who have this pain today.
• 28:43
  Speaker 1: They have a percentage maybe who they think will have it tomorrow, and then they have new customers that will come on board in three years, who will definitely have it.
• 28:49
  Speaker 1: So you're able to win deals quickly, right, maybe not all of the business and can slowly sort of build up.
• 28:58
  Speaker 1: So, as opposed to it being this binary all or nothing with an end customer, you're able to start to sort of capture that business quicker and earlier and build from there, and then, of course, that lifetime value starts compounding significantly.
• 29:13
  Speaker 2: Yeah, I love that.
• 29:14
  Speaker 2: I've spoken a couple of times about AWS on this in this show, but I've interviewed I think once already released a couple more to be released A few people from AWS and they speak.
• 29:25
  Speaker 2: They're so customer obsessed and they mean end user and what you've just highlighted there perfectly is you know what actually is better for the end user?
• 29:33
  Speaker 2: It's that I just buy one month and we get to see if that works and why that's so powerful.
• 29:37
  Speaker 2: Is you build a better product because there's no hiding, and then, if you can get the partner ecosystem and the facilitation to all line up so that you can afford to take that risk, it's a better experience for everyone.
• 29:51
  Speaker 1: Yeah, and SMB right.
• 29:52
  Speaker 1: It's a different sort of risk tolerance.
• 29:54
  Speaker 1: I mean, when you work with the biggest companies in the world and I have experience on that side of the house as well right, your investment into proving concepts and how long they trial for and go through procurement right.
• 30:06
  Speaker 1: I think the expectation is the commitment is longer.
• 30:08
  Speaker 1: Right, on both sides it's a multi-year journey in order to deploy successfully the technology.
• 30:14
  Speaker 1: There may be services involved.
• 30:16
  Speaker 1: Right.
• 30:16
  Speaker 1: When you're with an SMB customer whose cash flow may change from month to month, because you know Joe's Plumbing down the street, you know had a bad month and they can't pay their bill and you need to have some flexibility.
• 30:27
  Speaker 1: You know we want to be sensitive to that.
• 30:30
  Speaker 1: Right.
• 30:31
  Speaker 1: It's a different business model and I think you know this sort of affords for that segment of the market to still get access to the great technology without having to basically suffer for it.
• 30:42
  Speaker 1: Right.
• 30:43
  Speaker 1: So I love sort of the.
• 30:44
  Speaker 1: You know the balance there.
• 30:46
  Speaker 2: Awesome.
• 30:46
  Speaker 2: So I think we've spoken a lot in terms of operational efficiency getting the right partners on board, building the right ecosystem around them, tying into Microsoft effectively.
• 30:56
  Speaker 2: What are you doing today over the top of that to help your partners to be successful?
• 31:01
  Speaker 1: Yeah, I mean, one of the kind of core tenants of our channel business is to not talk about just revenue, right?
• 31:09
  Speaker 1: Yes, ultimately the end game for everybody, right, both our partners, customers and us is to ultimately sell, right, of course.
• 31:17
  Speaker 1: But what we try to focus on is this idea that we're here to help make your business successful, whatever that means for your business.
• 31:28
  Speaker 1: So for our MSPs, maybe it means being able to add more diversified services in whatever you know technology competency they're great at.
• 31:37
  Speaker 1: Maybe it means helping them build go-to-market right and we create these campaigns in a box to help them do this, as opposed to going to an agency and spending $25,000 on a campaign, right, or obviously the kind of the run-of-the-mill certification programs right to get them competent in our technology.
• 31:56
  Speaker 1: But ultimately, our goal is to understand what they want to do as a business and for us to help them do that and be successful.
• 32:06
  Speaker 1: Not just hey, you know we want to hit X number of revenue this year.
• 32:11
  Speaker 1: How are we going to do that together?
• 32:13
  Speaker 1: Well, that's very AvePoint focused, right, it's not very partner focused, and so that's sort of our core.
• 32:20
  Speaker 1: So everything we do is about helping them be successful in their overall business, not just AvePoint business and however we can help support that co-selling, co-marketing dollars, mdf right I mean, of course, once again, it all goes back to the ultimate North Star of partner sourced revenue.
• 32:37
  Speaker 1: But we want to be really thoughtful about their business needs and how we can help them.
• 32:43
  Speaker 1: And if you have that as sort of front and center, it helps shape the way you think about partnership right.
• 32:50
  Speaker 1: So that's where we really focus.
• 32:53
  Speaker 2: Scott, I've immensely enjoyed today.
• 32:56
  Speaker 2: I think you should be extremely proud of the business unit you've built.
• 32:59
  Speaker 2: We had Sam on a few weeks ago and he spoke extremely highly of you and, unfortunately for you, he recommended that you had to come on this podcast.
• 33:06
  Speaker 2: So maybe I can ask you one more favor, which is Scott.
• 33:09
  Speaker 2: Who do you think we should have on next?
• 33:12
  Speaker 1: Yeah, um, I would keep the AvePoint theme going.
• 33:15
  Speaker 1: Um, and we've luckily been able to hire some incredible talent, um, as we've invested in our channel.
• 33:22
  Speaker 1: Um, so the person that springs to mind immediately is a person named Chris Blackman, who recently joined.
• 33:27
  Speaker 1: In the last few months she's a director of channel marketing and what I love and what I think she can bring to this podcast is a different perspective.
• 33:35
  Speaker 1: Right, she's been a consultant, she has worked in at CRN, right, and she has an incredible amount of knowledge of the ecosystem in general, has an incredible amount of knowledge of the ecosystem in general, right, not just AvePoint, but other third-party technologies, prm systems.
• 33:50
  Speaker 1: Right, lead generation of channel partners, and I think she would really give you a completely different view of channel and what she's seen out there and a lot of value to your listening audience for sure.
• 34:04
  Speaker 2: Awesome Scott.
• 34:04
  Speaker 2: That's been extremely helpful.
• 34:06
  Speaker 2: Thank you so much for coming on.
• 34:08
  Speaker 2: I really appreciate your time.
• 34:09
  Speaker 1: My pleasure.
• 34:09
  Speaker 1: Thank you for having me.