Dive deep into the world of partnerships and ecosystems with our special guest, Ard-Pieter de Man, acclaimed Author and Professor at Vrije Universiteit Amsterdam, and an ecosystem partnering expert. Hosted by Alex Whitford, VP of Partnerships at Channext, this episode delves into the intricacies of successful collaborations with Ard-Pieter sharing his extensive experience, highlighting the crucial role of partnerships in navigating the rapidly evolving tech landscape.
The duo discuss:
1. The impact of technology on scaling partnerships.
2. Strategies for building and governing effective ecosystems.
3. Why partnerships are booming, especially in the tech alliance space.
4. The intersection of channel strategies and technology alliances.
5. How organizations can navigate the shift towards more agile and collaborative models.
_________________________
Connect with the podcast hosts 👇
Connect with Channext 👇
https://bit.ly/channext-demo-request
Watch on YouTube â–º
https://www.youtube.com/@channext
#partnerrelationshipmanagement #channelmarketing #partnerenablement #Throughchannelmarketingautomation
Dive deep into the world of partnerships and ecosystems with our special guest, Ard-Pieter de Man, acclaimed Author and Professor at Vrije Universiteit Amsterdam, and an ecosystem partnering expert. Hosted by Alex Whitford, VP of Partnerships at Channext, this episode delves into the intricacies of successful collaborations with Ard-Pieter sharing his extensive experience, highlighting the crucial role of partnerships in navigating the rapidly evolving tech landscape.
The duo discuss:
1. The impact of technology on scaling partnerships.
2. Strategies for building and governing effective ecosystems.
3. Why partnerships are booming, especially in the tech alliance space.
4. The intersection of channel strategies and technology alliances.
5. How organizations can navigate the shift towards more agile and collaborative models.
_________________________
Connect with the podcast hosts 👇
Connect with Channext 👇
https://bit.ly/channext-demo-request
Watch on YouTube â–º
https://www.youtube.com/@channext
#partnerrelationshipmanagement #channelmarketing #partnerenablement #Throughchannelmarketingautomation
Welcome back to Partnerships Unraveled, the podcast where we unravel the mysteries about partnerships and channel on a weekly basis. My name is Alex Whitford and I'm VP of Partnerships here at Channex, and this week I'd like to welcome our special guest, ard. Peter Ard, could you give us a bit of background about what you do, who you are and why you're on the podcast today?
Speaker 2:Yeah, I'm Ard Peter I. I'm a professor at the Vræya Universitæd in Amsterdam and I also work as a consultant to profits and not for profits, and I've almost dedicated my life to partnerships and ecosystems and collaboration so both in research and in practice and advising companies about how to set up their ecosystem and how to govern their partnerships.
Speaker 1:So we've literally brought the expert in, which is good.
Speaker 2:I hope I didn't oversail myself.
Speaker 1:We're going to find out. We're going to give you a deep test today. So I think, for our listeners, I'd love to get a bit into today's discussion, not just purely around the IT channel, which is what we spend a lot of our time, but get your insights into why partnerships are booming.
Speaker 2:Yeah, I think we've seen a very long run development, long term development in companies, increasing the partnerships, but especially, I think, the past couple of years. You see that it's really high on the agenda and the reason is most important one is technology development. It's going so quickly that a company just cannot do everything on their own anymore. You don't know, you cannot keep up with all the technologies. But also on the market side and that's the supply side is one thing with the technology, the market side is another element. We see more complex problems in clients so you cannot solve them anymore on your own as a company. You need to do that together with a partner and also to get into different market segments. It's impossible for one company to have in that knowledge about all the different market segments. So again, that requires partners to bring that specific information about the market to your organization. So I think both on supply and on demand side you see forces that lead to increase size of ecosystems.
Speaker 1:Excellent. What you're talking there in the IT vernacular, I suppose would be the tech alliances. How do two organizations bring a product offering together and then the more channel side of the ecosystem, which is then how do we take that to market at scale? I've really seen more recently that tech alliance start to boom right when we look at software players Microsoft, aws, google, even things like HubSpot, marketplace, salesforce, marketplace when do you see that growth coming from? Is it customers driving towards different things? What's affecting that change that we're seeing this boom?
Speaker 2:I think it's customers driving for this change, but it's also the scaling of the technology itself. The new technology enables a lot of what's going on in partnering. The real problem used to be with partnerships. When I started out with that, which is right after the Middle Ages, you know, the problem was you had alliance managers and they were doing a great job, but they were also the big constraint, because how many partnerships can you handle as as an alliance manager? And so one alliance manager could perhaps have 10 partners, but if you had a really big partner, then one alliance manager wasn't enough to manage a very big global system integrator, for example. But with technology you can really scale that and increase your bandwidth, and then the number of people you have is no longer the constraint in developing your partners.
Speaker 1:And so we often see in the channel people using distribution to help scale that, but we're really still limited by the same factor, which is people. How do you really solve for that, that person to person thing? What can we automate? What can we use technology? And do people still have a role within partnerships?
Speaker 2:Yeah, I think people still have a role because, also, the relationship between people still is important and that's often where it starts. And so, of course, you can maybe sell something kind of anonymously through a channel and there's nothing wrong with that to get more simple sales. But if you're also talking about tech partnerships, you also need to work together to develop a solution, and then, still, people are important in that. And then you still need to think about how are we going to govern the partnership and what are we going to? What's the strategic focus of this partnership? And that requires also people still sitting at the old fashioned table and looking into each other's eyes and thinking, ok, can we do this type of business with these persons or not?
Speaker 1:Yeah, my big role is automate news technology for literally everything that you can and let people work with people, right? I think one of the things that we really see is people are chasing orders or whatever, or emailing, marketing collateral across and then calling them and say what are you doing with it? And actually what we should have people on is working just on the relationship element and wherever we can automate all other processes so that I can spend as much of my week having conversations like these.
Speaker 2:Yeah, I agree, and what we used to see that a lot of time was spent on administration. You know what is our joint sales funnel? Often we didn't even know because it was across a different silos and then the alliance manager had to go out and find out in the company. What type of business are we actually doing with this co-sale partner? Yeah, all that can be automated now and that frees up time to, like you say, for the relationship and to think more strategically about where are we heading with this partnership.
Speaker 1:Yeah, one of the things that I'm continually fascinated when we look at it from an economics perspective. Whenever there's a big technological change, the low skilled worker at the bottom is eaten up and disappeared, but what is replaced is very high skilled workers that are able to do the job at many Right. We've seen this in every leap forward in technology and I think we're seeing this within the channel, maybe as AI comes in as well. I'm seeing support tickets, for example. Ai is able to do the triage for 80, 90 percent of support tickets, but then the 10 percent that's left. You need someone that's really, really highly skilled. Do you think we're going to see that same level of automation and AI change? And then that means we've got very senior stakeholders, very strategic stakeholders, who are left?
Speaker 2:Yeah, I think so. I think that's a trend we are already seeing, actually. So the people are starting to focus on the complex things and the things that AI cannot handle or that cannot be programmed into an algorithm or something like that, and that also means that why you're going to be distinctive as an organization is precisely on that. You're not going to be distinctive on the technology per se, but you're going to be distinctive because you're able to manage that level of complexity and to do maybe the deals that others cannot do and that cannot be put online.
Speaker 1:So we're seeing partnerships booming, we're seeing technology play a critical role in elevating people to be more focused on on people roles. But what specifically, if you're seeing these changes, what should we be looking for to make those changes and really drive success?
Speaker 2:Well, yeah, what should we be looking for? I think, as an individual company, you need really to think about the why. Why do I have these partners, why do I have this ecosystem and how are we gonna distinguish ourselves from our competitors? Because I think we come from a time where you could see, if you go to the big GSI, they're all doing the same thing. I mean, I don't want to offend anyone, but really, whether I go to PWC or KPMG, who cares? You know they have the same same offering. And if you get that, and yeah, you're gonna end up with price competition and you're probably not gonna deliver a lot of value to your, your final customer. So I think we also need to rethink the, the why of partnering. So what type of partners do we need and what kind of distinctive value propositions do we want to put into to the market? And that also requires finding partners that have very specific industry expertise, for example.
Speaker 1:Yeah, for me. What's funny there is you actually need to build a two or even three sided why, right? There's the why to the end user why am I gonna build this bridge? There's the why to the partner what value are we providing to the partner and how are we making them more successful? And there's a why for the tech alliance, and one of the reasons I see tech alliances for a part a lot is that they can be very one sided. One party is getting almost all of the benefit and then the bridge falls over right.
Speaker 2:Yeah, and that's that's, I think, where there's still kind of a mindset in it that we need to push things out via the channel partners, for example, whereas I think if you have a good ecosystem is bi-directional. You can also learn from your channel partners and from the other partners that you have in your tech partners, because they also see the market and they may see a market segment that you were not aware of, or they may be in a certain geography where things really are going quite differently than in your own geography, and so I think you also need to organize for that by direction and directionality in the ecosystem, and to learn from the partners and share the learnings with the or your partners.
Speaker 1:Yeah, I think that's. It's a really interesting concept. I think almost sometimes the, the SMB partners, right, the high volume of partners they're almost disrespected, right. It's like we're going to give you content, you're going to sell our products and we're going to monetize you and and that's the the sum game, whereas actually they are your feet on the street, there they rise and is, and they should be, if you've got the right interconnected tissue giving you the information that allows you to remain agile. And I want to touch on that agility piece. Most channels, because they deliver hyperscale, are very in agile. How can we ensure that we have that bi-directional communication and we are making accurate decisions effectively and quickly?
Speaker 2:Yeah, I think that's partly a role of technology that you can see what works in the in the market and you can. You can look at the data of which partners are doing interesting stuff. But this is also where we can go back to the discussion we had earlier. This also where the people business comes in, so can you actually co-create new solutions with clients? And and that is where the, the ideology should come from it also is in your own organization. A lot of organizations are not organized properly to take advantage of the, the ecosystem system that they're in, and so they still have the silos. It's still unclear who's who's doing what in those organizations, whereas, yeah, you can also have agile teams, focus on a specific market segment or or industry and develop solutions together with that agency and then bring them to to a broader market.
Speaker 1:Yeah, we're seeing this a lot, or certainly I'm seeing this a lot in a startup scale ups right, where they have typically a startup or a scale up, they're not going to be building for the channel. First right is, if you want to go far, build a channel and build an ecosystem. But if you want to go fast, direct usually wins because you maintain full control. But actually we're now seeing this pivot point where I can get to 30 million ARR direct, so that's what I'm going to do. But then I need to access new verticals or new markets and then that suddenly, where I'm looking at ecosystems build in a more scalable way. What would be your advice to those sort of scale up leaders when deciding should I go into an ecosystem and what best practices can I take?
Speaker 2:Yeah, I think, should I go into an ecosystem? Is should no longer be the question, in my opinion. And so because usually you're, you are in an ecosystem already without knowing it, and then the partners are there already, or stakeholders, or that your clients are there. So I think that that's kind of a question that we shouldn't ask anymore. But obviously, if you're a scale up, you may start with your direct sell model and at one point to grow further and to scale further and you will need partners. I think there it comes back to again the strategy what do we want to achieve? What are the valuable market seconds? But also you already have clients and you'd be surprised that your clients can also be your partner and they can also show a direction in which the market is developing. So also make use of what you have already, because the ecosystem not just the partners, your clients are in there as well.
Speaker 1:Yeah, we're always talking about the synergies between customer success and ecosystem management, because actually, the practices that you have embedded in a direct organization for customer success are very transferable. And it's funny you talk about that innovation. It's incredible how many products have developed brilliantly based on customer feedback. Where they go, oh it should do this, and that's the whole point. Right, your partners are able to go, oh, we've deployed this technology in a way that you didn't think it should be deployed and it's working brilliantly. And that's almost your landing motion into a new segment. Right, because you're getting that initial feedback.
Speaker 2:Yeah, and then you can look at which partners kind of use to bring this to the market and for which market segments does this make sense. So that's really yeah. The co-creation with the client is also a learning opportunity to think about what partners do I need to bring a solution to the market.
Speaker 1:To me. I'm fairly obsessive about data, and why I love the ecosystem is I can stress test a thousand different ideas almost simultaneously. Right, we're not doing A-B testing, we're doing A-B-C-D-E and F and onwards, because I can take, push it out into the ecosystem and let the ecosystem because it's a living, breathing thing decide for me. Right, I don't need to have a hypothesis. I can say right, guys, this is how we think it should work, Over to you and let me know, and then we can double down on it. Once we know how it should work, what are the things that we can be measuring? What are the things we can be looking for to get that look and feel back?
Speaker 2:Yeah, I think in general we tend to focus too much on measuring the revenue and the sales, and there's obviously nothing wrong with revenue and sales, that's what we all want. But it's often a short term measure and that's okay for some channels and some partnerships that you have. But if you want to test things in the market, like you said, then maybe it's much more interesting to see how many people have actually clicked on our page that we were on the minimum viable product that we're offering. Have they looked at that? And even if no sales comes out, yeah, it's quite different If nobody is interested in a site that announces a minimum viable product, which no one company did, without even having the minimum viable product. They just put a site out there and say, okay, we have this type of product. And they saw, oh, a lot of people are clicking on this site and on this link. Apparently that's interesting.
Speaker 2:So you can also think about these type of leading indicators and that's also for sales. It's not necessarily the revenue, but how many people are certified in a certain technology, how many people have come to an event that we organized? And certainly if you start building new solutions together with clients, then measuring do we have a proof of concept. Is there a first client that we can talk to and the client maybe doesn't even have to pay anything? It could be just. Can we test it at a client Then are they interesting? Those things are also very valuable to measure, especially if you look a bit further than the next quarter.
Speaker 1:Yeah, for me you're absolutely correct. When you know I do a lot of funnel analysis here at Channex. Right, we evaluate how deal for velocity, deal size, conversion rates, but if I just looked at closed one revenue and took all my learning from there, there is a thousand reasons deals aren't moving. And so if we just analyze, did the deal happen? No, it was a failure, and you go. Well, we got all the way down here.
Speaker 2:Is it incentive? Is it training? Is it what collateral that we made available? What is it? Can we figure that?
Speaker 1:out. I have a new favorite phrase, and my team would be rolling in their eyes because I'm shouting it almost every day at this point, but it's there are no silver bullets, but there are 100 golden BBs. Right, we need to keep iterating each element and then we get this huge return because suddenly we've got the right message, we've got the right product, we're taking it to the right customer through the right partners, and now we've got an engine that's self sustainable yeah, yeah, so often it's and incentives and training and those kinds of things, and then to figure out what the right balance is.
Speaker 2:That's not that easy but it is, I think, where the value lies.
Speaker 1:Well, yeah, I think sometimes I get into the into arguments for people and they, you know, channel doesn't work, direct is better, and I just Pick a company, tell me a massive company, because if they work in IT they are all channel business. You know anyone that's doing a billion dollars revenue a quarter. I think every single one is in the Co-Sell space, right, whether it's Co-Delivery, co-sell, distribution, margin. There is all some iteration of the same thing, because for you to hit that hyperscale you need support.
Speaker 2:Yeah, and there are always going to be channel initiatives that fail. But the question is do you learn from it? Why does it fail? So failure as such is not an interesting thing. How can we improve it and what are the causes of failure? And we've seen certainly in the beginning, when companies started with channels we've seen huge failure rates. Obviously it's a new thing, but by now I think we know much better what's working. And I think companies now say, yeah, the channel doesn't work. And I wonder, did you really try? Or, yeah, did you set it up to fail? Or did you do just one single experiment with one partner and then, for one reason or another, it didn't work with that partner? And then at once we say, oh, all partners are crap. That's not a logical way of thinking.
Speaker 1:No, and what was really crazy and I'm smoking because I hear it all the time we've tried it. It doesn't work. And then I think were you there when you started building this business, because I get no business in the world worked the first time around. Right, they all made a thousand mistakes before they got their first deal and then even then it wasn't working.
Speaker 1:And so you went through this entrepreneurial motion to build a direct go to market. And yet you're expecting I don't need to go through an entrepreneurial motion to build a channel which I would argue is actually more complicated but with much higher upside.
Speaker 2:Yeah, and a lot goes wrong internally as well in companies. I mean, where are the partner managers in the organization? For some it may work fine to have them a sales, for other it could be much better to have them a strategy, for example, or in business. They're also not always incentivized in the right way, they're not always supported in the right way. So the people that are responsible for the partner programs yeah, that's also a separate profession nowadays, and companies that are new to channels and partners do not always realize that it is a new profession that also requires specific knowledge and sales.
Speaker 1:Yeah, I'm reminded of that Thomas Edison quote. Right, I didn't fail 999 times. I learned how to not make a light bulb 999 times, but then it worked once and that's all we need, right, we only need it to work once, and then the model then works. And the great thing about the channel and why I'm sort of obsessive about we're not A B testing, we're A through to Z testing is I can try seven different variations in seven different partners, to different end users, and I'm just waiting for that light bulb to turn on once and then we go right, we've got it Now. We're now going to dive in and we're going to replicate this strategy on and then continue to iterate, but we've got the foundation that we know works.
Speaker 2:And also here I think it should be bi-directional, because if you talk into a prospective partner, you can also ask them what makes them tick, what would work for them, how do they see the partnership?
Speaker 2:And I still see a lot of organizations that do not really have this conversation, but they assume that the partner will probably want this. And I can tell you one thing from 25 years in partnerships and alliances all those assumptions are always wrong, and so one of the tricks I sometimes do is when there are two partners together and they want to set up a partnership, I send them, give them just a sheet of paper and say OK, each company, right your top three things you want from this partnership and the top three things that you think the partner wants from this partnership, and then they have to show the paper to each other. It never matches. We always assume that a partner wants, I don't know, revenue in this industry, but actually the partner doesn't care about an industry. So, yeah, don't assume too much about what your partner wants. It's really a success factor also to discuss that with them and to learn from that, and that helps you to build a more effective channel partner.
Speaker 1:And I think this is where I sort of always am slightly confused. I do a lot of consultancy for American SaaS companies in terms of how do you build a channel in EMEA and I'm typically speaking to salespeople, right, that's typically who you're speaking to sales leaders and I sort of sit there and go do you sell your product like this? No, you obviously ask the customer where their pain points are, what they're trying to achieve, and then we integrate into that. What do we do with partnerships? Yeah, what do we do?
Speaker 2:with. Here's the stuff.
Speaker 1:So we assume we know what you're doing and we just ram it down your throat Right and you go. That's never a cohesive. It will never work to build a sustainable sales strategy and it will work even less to build a sustainable partnership strategy. And so my gut is always funny easiest answer, which is to bloody pick up the phone and ask the guy right He'll, he'll tell you what is important to him, and then we orientate the strategy. And we talk a lot here about two sided strategies. I need a partner strategy partner messaging, partner value and I need end user strategy end user value and then I just pulled the two things together. If you get those two things broadly correct, you're probably going to be very successful.
Speaker 2:And it's interesting how much partners want to tell you because they have an interest in it as well, and I've worked with one organization once and then we're also very much internally focused. I said, well, come on, let's, let's why your stakeholders, who are your partners, let's invite them for an evening and ask them. Well, it took them about a year to think and think about that and then they found, yeah, maybe it's a good idea. And so we started inviting like the top 20 partners, stakeholders, clients and the interesting thing was all 20 of them came except for one and he was on holiday and he said I miss it, sorry, can I join next time? Because everybody was willing to discuss with everybody, even with 19 people in that one room, and they were discussing ideas about how this organization could improve. So they're very much willing to share all the knowledge and insights that they have. And in the end, I think three great ideas came out and he implemented and they were on their way.
Speaker 1:Excellent. Look, our pizza has been an absolute pleasure. Listeners, if there's one thing you can take from this podcast, find the easy solution. Speak to your partners, get the answer and we look forward to seeing you next week.