Whole Product Partnerships

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Whole product and partnerships.

Component versus whole product. Listen carefully to the distinction between a little component (a spark plug) and a solution or a big thing (a car). In Actuality’s case, Greg had a display that would connect to a computer over gigabit Ethernet or SCSI, plus an API. But that API assumed the customer was really smart about computer-graphics programming, meaning only a handful of people in America. So Greg used his last remaining pennies to build an OpenGL API, so that a well-behaved graphics application (like SolidWorks, or something showing pharmaceutical designers some molecules) could plug in, and whatever it was doing would continue to work while a hologram of it floated in the air. That is the difference between shipping a component and delivering a whole product that fits into a customer’s existing workflow. Whenever you have a tight core, the rest of the whole product should come from partners and services.

Partner from day one. Playing nice in the ecosystem is not just about serving many masters in a complex platform. It is also about picking partners that are part of your product from day one and can help you grow. Partners are either on the necessary side (needed to create the business at all) or the leverage side (able to make the product explode). Klaviyo starting as a Shopify feature and being blessed as the preferred SMS platform is the leverage case; the wireless-carrier partnerships were the necessary case.

Sell through partners, or go it alone? One way a partnership works is you sell through partners: the partner does distribution and ends up between you and your customer. Whether that is better than going it alone really depends on the business and how much you think a partnership could accelerate you. You have to balance the loss of 100% customer control against the acceleration. A common way to solve for that is a short contract if you really want to keep the option to go direct. That is exactly what we did at Padiant: we partnered with big companies that resold our stuff, and eventually, once we had enough traction and built credibility, we switched over, cut them out, and went direct to our customers.

The SolidWorks partner program: a three-step method. [From John’s SolidWorks story] We understood early that we would focus on core modeling and have partners do the rest, but partners are interested in only one thing: your customers. And how do you get customers if you have no partner applications on top of your product? We proposed a simple three-step process. Step one, “marketing cold fusion”: get credibility through numbers, press releases, and relationships, with a very lightweight early definition of what a “partner” meant. Step two, “leaders set the pace”: focus on a few select partners in each vertical. In analysis, the big vendors would not give us the time of day, so we picked the number-three vendor and said, “We’re going to make them number one in our space,” and through sheer force (and a lot of hugging them) got them to build integrated applications. Step three, “followers will follow”: once those partners got mind share in our channel and started getting sales, the big guys had to follow. The irony is the followers were actually the category leaders, but we were the platform they all built on top of.

Whole product Q&A / partner exercise (from the room). Think of one or two partners you should partner with for your idea.

• The Pitch App: “I could partner with LinkedIn and call it ‘LinkedUp,’ just add a feature to their already-developed product, embedded pitch decks with swipe-right/swipe-left.”
• A classroom-diversity venture: “I bring experts of color into the classroom. I could partner with the big textbook companies, Pearson, Macmillan, curriculum associates, to integrate my product into theirs and bring diversity into the classroom.” (Response: great idea, but they are a very big company; partner in a way that is not in all their textbooks. Start on a smaller publication where you can get their attention, then work your way through the organization. In these partnerships you have to find a champion who believes in what you are doing and has enough pull to make something happen.)
• Foodie: “We can partner with POS systems. Toast is the market leader but only has about 15% share, so the POS market is extremely fragmented. Any POS system that wants to take down Toast with us will be interested in partnering, and they’re local, you can walk over and bang on their door.”