What are the partner secrets behind Zoom's meteoric rise to the top of Mt. SaaS?
In today's episode we have the Global Head of BD at Zoom, Laura Padilla. Boom.
One day Laura's name will be minted in the partnerships hall of fame and today she lays down the laws that will get her there.
Every BD leader, senior executive, and individual contributor needs to tune into this very special episode 20 to learn from Laura's decade-plus worth of senior partnerships experience building some of the most successful partner ecosystems around.
Laura breaks down the difference of building vs. scaling partner ecosystems in Hypergrowth and how to know when it's right to move past building into scaling.
Check out all past and future the PartnerUp episodes at https://www.partneruppodcast.com and... don't forget to follow join the world's largest partnerships community at https://www.cloudsoftwareassociation.com to hang out and learn with 4,000+ partnerships professionals.
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Jared Fuller 00:20
What a week it's been I think the news broke today on stripes $95 billion valuation. That's a hot one and particularly relevant to partner ecosystems, given the fact that stripe is basically, you know, a platform for other companies to develop their products and services on and then Justin, the article I sent you from Bessemer. That was what the cloud market is now valued in SAS at $2 trillion.
Justin Bartels 00:47
Brooke, calling him out SAS has overtaken Fang right as the primary driver in the market.
Jared Fuller 00:52
Yeah, I think Mt. SAS, which is the different side of you know, Fang, is, I think outperformed Fang by a factor of three over the past or for over the past three years. So we actually have someone on the call today that might know a little something about that, given that we need to add this to the ticker of Mt. SAS, which is Laura dia of zoom. Welcome, Laura to partner up.
Laura Padilla 01:18
Well, thank you so much for having me excited to be here.
Jared Fuller 01:22
Yeah, what's what's your take on you because you've seen hyper growth and it kind of a couple different formats and lead partner organizations. But like, what's your take on you know, Stripes valuation given that they're, you know, kind of platform level, your cx level? What was your take on that announcement?
Laura Padilla 01:40
Well, stripe, first of all, is an awesome company. Super innovative, super cool. I guess not surprising, since the world of cloud has just exploded, and then everything is just more intertwined. And cloud is the way to do that. I mean, it's the web that weaves ever to get thing together. So if you think about how everything's moving online, whether it's you know, Bitcoin cryptocurrency to NF T's, you know, everybody's selling. Yeah, you know, non, you know, fungible tokens, everyone Szilard, everything's everything The world is virtual in general. So how do you actually monetize that? And stripe is going to do that? I think they're looking to monetize the world in every flavor. So no, so no, I guess I'm not surprised.
Jared Fuller 02:21
Yeah, I think it'll be I mean, it's it seems inevitable that we'll be talking in just a few years, I think it was 70% year over year growth to which is you don't see trillion dollar markets growing 70% year over year? Like I I don't know that there's a parallel to that. There's really not maybe maybe cryptocurrency itself, but
Laura Padilla 02:41
well, we grow your zoom grew more than that. But yeah, that's your talk.
Jared Fuller 02:47
Your growth story is its own meteoric rise. I think at that scale, though, whenever you're commanding. I actually think zoom could be that big of a company someday power and communications that, you know, that kind of scale. I mean, you know, in this is actually an interesting question that isn't necessarily related to partnerships. But before we come back in it, just given this mountainous movement in SAS, and this recognition, recognition that's happening, where do you think zoom fits on the maturity curve? Like, where I think it would be interesting to just kind of hear like, how you were thinking about it, as you know, executive zoom? What's the longer game the rest of us don't necessarily see?
Laura Padilla 03:27
Yeah, that's not that's an awesome question. Okay. So when zoom started, everyone was like, What? Another video conferencing platform, you've got WebEx, blue jean jeans, tried their thing, you know, you have all the other platforms, we don't need a new one, you know, this is an effective, right. And so I think every single market is, is ripe for disruption in some way with zoom obviously proved that when you look at the overall Gist videoconferencing and how you communicate market. Now, as we're kind of entering more into a platform, and everyone uses this term of platforms, and what the hell does that really mean and all that. But I think what it really means is, you're looking at the world and more ways to connect, right? And you're thinking about how do I open up all the different ways that my product works with different ways that different services and software also works? So when I think about like our video engine, what actually flavors are makes our video conferencing solution meetings, which is our core bread and butter work. How do we actually take just the video engine out and like gamers use it? Right? If we actually think about, you know, we've now it's only about two years old. Seems like forever ago was two years old, our zoom phone product that we've entered kind of this eucast market, that is not a new market. You know, you've had ringcentral A by A, you know, lots of companies and it's not necessarily new. However, we do think it's ripe for corruption and how they have done it, right. And I do think for us this whole platform story of, hey, you want the video engine if you want pieces of how you communicate in the cloud, and they give us more than a communication OS, right, and how you're able to do that through our API is through our SDKs, making us more open. We're already seeing disruption in telemedicine, telehealth, how education works, financial services, you know, I get pinged all the time by different companies, oh, super cool ideas about like, Hey, you know, can we use zoom for this application, or, hey, you know, I have this different vertical. And, you know, I just want to use your video engine to be able to plug it into a certain application that I have to be able to do that. So we're going to see is us opening that up to a lot of different flavors versus just an application and selling just that app. But I'd love to dig into that step further. Because
Justin Bartels 05:57
as we all seen, zoom has moved to become a household name like the, you know, almost synonymous like Kleenex for tissue papers, people now say zoom, as the default for you know, digital communication, and especially video conferencing. And an imagine with that has come a lot of opportunity to partnerships for alliances for integrations, how have you narrowed your focus or open your focus to say, Man of all these opportunities, we could have chased this last year, and we're chasing right now? These are the ones that we need to focus on right now. And our most important,
Laura Padilla 06:30
well, it's, ya know, it's been a journey. So I've been at zoom for about three years. And when I started, you know, it was just kind of a concept Oh, when you partnerships, right, and there really wasn't, it was what really wasn't baked. And so we've done we've kind of looked at it in four different ways, right, four different flavors. One of them is your standard resellers who just want to resell the product, no modifications, and just want to offer it to their customer base. The second one is, you know, through our service providers, so telecommunication companies themselves, like the at&t s, and the OBS is the BTS, who actually want to integrate our meetings platform into their connectivity networks, right, and use often have their audio on the back end. And then also, as they offer broadband and different things to their clients, how can we be a part of that overall solution. The third is, through zoom founders. There's this incumbent telecom consulting industry or consultants called the master agent, community, and referral partners, we just saw them about a year ago. And they're often and they know you cash in and out, they've been selling that product in and out for years. And so they're off now recommending zoom to their customers who want to move from on prem into the cloud, as well as maybe migrate from an existing cloud solution into zoom. And the fourth one, which is what I just talked about earlier, which I'm really excited about is more of this platform sale, right, more of an ISV integrated sales is brand new, and a lot of that came from COVID. Like, you look at, you know, on zoom is a product that we offer now for prosumers. So, and I call it a COVID, baby, because you know what happened during COVID, everything got shut down. And then certain professionals like your yoga instructor, you know, I don't know your teacher, you know, name it, who would have students come see them in their offices, didn't know what to do anymore, right? And they're like, how do I host, you know, continue my business, and host all these students and continue education, and continue my business, but now virtual. And so as a result, we launched on zoom. So all these professionals can sign up, easily launch an event, people can pay online, you know, and do all that online. And it's all integrated, versus I'm trying to figure out all those different pieces in a disparate way. That's just one example. But the platform sales piece of the business, you know, we have all these independent software companies, all these ISVs coming to us and saying, hey, Laura, you know, I want to use your API's. And your SDK is and I want to be able to integrate into an existing service I have, I have to enhance it, right, or I want to create a brand new offering for a market. And we're seeing tremendous growth, just in that and that's where the productization piece comes into play. Yep. Jared.
Jared Fuller 09:25
Interesting. Um, what what I'm curious about is, so at drift, we did the same thing. So Jess and I are both adrift. And we integrated with zoom in a couple different ways. So we can drop zoom links into the chat experience. And then we can also we have a product called drift video for async so like recorded videos, but will actually take your zoom recording and publish a shareable video that has chat baked in, which is you know, some novel use cases and I, I will say that I'm copying zoom was Sequoia funded, correct.
Laura Padilla 10:01
I feel yourself when Sequoia mergence. There's a few VCs. Yeah, right.
Jared Fuller 10:05
So I think there might be some sort of shared Sequoia blood between zoom and drift in that. DC, our CEO. And I think Eric, we're often talking about these two macro trends, which is like, chat, right, like the fastest growing b2c companies ever. Snapchat, WeChat, WhatsApp, Instagram. And then conversely, the fastest growing b2b and even b2c companies, you know, the YouTubes, all the way to the zooms. There's these big macro trends, and we've seen that kind of integration happen. I'm I'm curious what things have come out of these conversations, like when you were building the platform play in COVID, kind of accelerated? I'm assuming that the number of integrations that you've got has been explosive over the past year? Oh,
Laura Padilla 10:51
yeah. Yeah. Um, yeah. So the number of integrations, the number of partners is just 1000s. I mean, just coming out every day, there's more and more partners coming out
Jared Fuller 11:00
with the measurable, like, almost right. So like, how do you measure it? I think that's kind of where I was trying to take this as this, this macro trend is so big, in your rise to the top was so fast. Like, as good as you are? Could you plan for this?
Laura Padilla 11:19
So so let me answer the first question monetization first. So I've been doing partnerships for a long time. So there's, I would say, there's different ways how you define value from partnering, right? There have been at companies where it's been, hey, we just need to integrate, right. And so we need integration play, because there's a gap in our product offering, or there's different use cases that we don't account for. So I have to partner with Company A, to be able to do that, right. And then you measure success by that is by how many customers are actually using that integration, right? And that use case adoption. So that's kind of what I would say their traditional partner method has been kind of that, right. And most of my career has been around that. And that's very closely partnering product management actually, in sales. You know, what I've seen in the SAS world, kind of, you know, and the second way that you then the second big bucket is revenue, right? And so when I think of the API stuff we were talking about, there's kind of and I meant to, there's lots of flavors, but I'm just with two big buckets out there, right? One is an ISV partner who wants to integrate and monetize that integration, right? So what we do as a partner to say, I want to consume this API, I'm going to build a brand new service, and I'm going to resell this bundle brand new offering to my consumers, okay, for that they actually purchase from us, and they act kind of like a reseller. And that they can buy per minute, the API, or we actually offer proceed, right, depending on what their what API they're using, if they're using our instant SDK video engine, which is per minute, or if they're actually licensing the whole application and integrating it that's more perceived
Jared Fuller 13:06
as that OEM powered by a gray label white label, is it both?
Laura Padilla 13:11
It's, it can be all of those flavors depends on how to present it, right. But yeah, some of them is just on white label OEM, you don't see zoom at all, some want to co brand with zoom and say, you know, drift, powered by zoom, you know, maybe they'll want to have that on it. You know, or some of it just co branded, whatever that kind of looks like. So there's different flavors, each partner is a little bit different on what they what they want to do with that. And but the fact that we now have these API's and standard API's and SDKs, and we're building more and more allows partners just kind of plug in, right. And it's not a huge lift on the engineering side. Well, we spent a lot more time on is much more on the validation side with partners on Hey, is this your use case? Makes sense? Does your integration work? developing a dev account for them, making sure everything's operable and production ready before they actually launch to their customers? And so there's a lot of revenue there. So if you think about like, Twilio, you know, Amazon chime, you know, some of the other partners who also offer and sell their API's, you know, in kind of some of that flavor. You know, we're also offering that up. And so there's revenue there. And then we have the zoom app marketplace, which today is more, you integrate, and you publish, there's not monetization today. Right? And that will eventually get there. But I would say if I had a bucket two ways to value partnerships would be the first one I said, which is just, I got to integrate, because it makes sense from a product and use case perspective. I'm just going to monitor the consumption of this integration and usage, right. And the second thing is actual revenue, right? How do we monetize this integration, and you know, they're acting as they consume in the reselling. So we charge them for that.
Jared Fuller 15:00
When do you think that there had been a shift at some point in zooms trajectory? Where partnerships were more strategic one off to some stance being taken that we are going for platform? Was that while you drove before you joined? Or was that did that transition happen after you joined?
Laura Padilla 15:22
I would say during these three years that definitely happened. I mean, you know, when I started three years ago, was obviously, before IPO and all that, we were still focusing on just selling the application and the service, right, and making sure that we're gaining traction for meetings, and then talking about building launching zoom phone for a complete eucast offering. That was more the discussion point, then as we've evolved, and now gain traction, now we're saying, Hey, you know, what, people are using us for so many different things, right? There is a need for more of a communication or less, right? How do we actually make ourselves open and more than just this service that you buy packaged up? You know, I mean, one thing that our products are amazing. I mean, that's one of the reasons why we've been so successful, you know, is just the way the product has been architected and built. And I think that we're able to now offer that up in, you know, micro features or feature sets so that people can use that in different ways.
Jared Fuller 16:22
I'm curious about the the culture shift that might have led to that decision. There's no companies like drift experiencing hyper growth. And we might feel like we're in a inflection point, so to speak, in terms of the dedication towards ecosystem, I'm curious if there was a point in time or an event or a series of events that you could point to where you went, hey, this is where we pivoted, you know, hard because of this decision, or this realization in the market towards a more ecosystem centric view of the zoom world.
Laura Padilla 16:53
Yeah. I mean, COVID, PID played a huge part in that. You know, I would say that about a year ago, we were we were definitely already talking about like service providers, we wanted to double down. And the reason for that was, they're going to help us grow internationally, large global multinational companies, we're now coming to zoom, and wanting to use zoom across different continents and nations. And so service writers, for example, own network. So we were starting to have more conversations around how do we grow the different partnerships and make and these are complex organizations? And how do we partner with these organizations. So that was already happening. And platform where we had some of that API work already happening. And we were selling some of that. But what happened with COVID was everything is accelerated TEDx Think of it like accelerating three years quicker than probably, that would have happened, it would have happened anyway. But like, I would say, maybe three years faster than it was. And the reason was, because there was just so much demand from everywhere. The only way to meet that demand was having partners to help us do that. Right. And so that's what we saw is it just, it was just inertia, like, you know, everyone came in was like, Laura, you know, we've ever went to start knocking on my door, and we need more partners, who's going to do this? Who's going to do that? You know, what's going to happen? How are you to grow our international markets faster? And how are we going to support all these different use cases, government currencies? Well, the stuff that we need to do there only we're going to do is with partners?
Justin Bartels 18:27
Yeah. And what did you learn? I mean, I can imagine there's only a handful of people that have been in your role during a time of that kind of hyper growth. Looking back, is there something you wish you could have told yourself, you know, what, what about March 10 of last year, you know, prepare for this or do this differently going into the next year of scaling girl through the COVID era?
Laura Padilla 18:49
Well, first of all, I'm, I'm gonna say I'm super proud of my team, because I'm not gonna lie, there are a lot of tears out of days of people freaking out, stressing out, you know, a lot of tears, right? And like, I just had to keep it together, right for people, because everybody around me was like, there's no way we can, you know, support this volume, right? Because we were just we're not staffed for it. Our architecture and our data centers, we were lining up all these new servers every weekend, you know, there was like, hundreds of new servers being being turned on it was, you know, it was it was nuts. So the only thing I think, I would say would be priorities. prioritization is king. And I know it sounds simple, but when you have everybody throwing themselves at you and saying that this is important, you know, you have to really step back and say, What is the most impactful piece? And what do I need to do and and focus on those things and say no, and be okay with saying no, this is business justification. So I think that's what you know, I learned as a result of of this was just like, prioritization is super important. And leadership is super important. Like being empathetic to your team. Right? And so, you know, your people during chaos and crisis are only going to follow you if they believe in you. Right? And so how do you stay cool and calm? Not saying that I was always calm, but now and you know, being able to provide them direction, and making sure that they believed, hey, you're steering us in the right way. And you also care about me. Right, and you care by my about my well being, because the one thing that we haven't talked about in this whole COVID thing was, you know, as a human crisis, and a lot of ways to write. And it was, I mean, people were passing away, and it was, you know, it, there was a time period, I remember I, I had a call with an all hands call with my team, where, you know, I, you know, just spent the time just talking to them about how I was thinking about them. And I want to make sure everybody's Okay, and how is everybody feeling and, and we spent that time on that call just about that. Right? and telling them I need you guys to take the weekends off, I need you guys to unplug. I don't want to see you guys on right spending time on that. And I got so many notes back from my from individual team members just thanking me for that. They needed to hear that. And so I would say just people in prioritization and focusing on those things, is by learning how how that you do get back.
Jared Fuller 21:24
There's, there's so many lessons we could probably dive into with you just on that topic. I mean, you don't create ecosystems and partner programs and all of this absent the people that actually care about those third parties that don't work inside your walls, I think it's very easy for companies, to inculcate a culture of customer love, I shouldn't say very easy, it's more common. I think it's very difficult to inculcate one surrounding the partner world, and your partner organization has to be set up to do so. So kudos to you on the leadership there with the team on the front line, because like how to lead partner teams is probably a separate subset of conversation where you just talk to Laura just about that, because I think we, I mean, we've done what this is Episode 19. Now, Justin, 90, you're the first person to bring up people management. Oh, wow. The first person to bring up people management at all. So go double down there. folks listening right, right now, it is all about people without without people, we really have nothing to service our partners and to carry the their flag into the rest of the organization. I'm curious, Laura, how how do you think because you've seen the transition from like, riverbed into like, you know, Nutanix and then into zoom and some, you know, hypergrowth, how do you think about partnerships in b2b SaaS, like, define that for me? Because you said you have some referral partners happening? You have ISV? What is partners, that ecosystem and partner world to you? How do you bucket or prioritize it? And then think about building your teams around it? Yes, there's
Laura Padilla 23:03
two main things. One is sales coverage. So I partner really closely with our North America sales leader as well as in our international sales meter on just the markets. Right. Okay, where where do we need more coverage? And I mean, from up market, so enterprise to SMB, as well as geo? So if I think about my internet, the international markets, now we've our international leaders prioritized markets by priority one, two, priority four. And so we've sat for hours, you know, in our in our plantings around, okay, how are we going to cover these markets? And we know we're not going to hire 1000s of direct sales reps, each of these countries, right? We're going to do that with partners. So So sales alignment is super important. So what you're going to see happening in the rest of this year, just from a pure sales coverage perspective, is more investments in distribution partnerships, and straight value added resellers in specific markets who have the right competencies, have the right coverage models, feet on the street skills, and commitment to zoom. So those are things that we're launching, like in the German market, for example, you know, let's see what Deutsche Telekom for example, in Japan, we have an amazing relationship with SoftBank, right, SP CNS, their division, which is a distributor division of SoftBank, you know, doubling down with them in that market. And then, you know, for example, in in Australia, New Zealand, we have other partners similar to that, right. And so international is huge on the sales side, like we really needed to find the right sales partners just for coverage and reach and domestic. So that's one area. The other area is, you know, is the product side of it. Right so when I work really closely with our product management team and an every one of my jobs. I spend a lot of time with my engineering and product teams. When it comes to partnering. You have To understand the products really well, and you have to understand how the pieces fit, you have to be somewhat technical. If you're not, then you're not going to be good at this job. That's just how it is like when I hire my favorite hires have a product management background, and they want to move into business. Those are my favorite hires, in this role to see you guys know. And so when I'm working really closely with product management, I know that's really corporate strategy. Hey, so where are we trying to grow our product set? Are we going to build Are we going to buy? Are we going to partner? What are we gonna do around that? Most of the CEOs I've worked for have been former engineers who have built the products. You know, Eric dhiraj, at Nutanix. I worked at box before Aaron and same thing riverbed, right, yeah. All driven from, you know, CEOs whose teams built the product. So they tend to like to build themselves, because they're engineers and their product, guys, right. But, you know, my role is to say, hey, it makes the most sense in these areas, if we're going to grow a product set to partner in these ones, that it doesn't make sense for us to build that, right. And so we just prioritize, we'll say, hey, know, what we need, like at zoom will say, Hey, we really need to partner with box, the Dropbox and so forth without sharing, right? We want to build with Slack, a partnership around, you know, more chat channels, right, and more sophistication around that, like, how do we keep expanding this concept of cloud collaboration with our partners, right? And so then, that's the second set of it is like, how do we work closely with the product leadership team, around, you know, integrations and partners to just expand our reach and our use cases for customers as well. So if I have to two big buckets, sales, sales, alignment is key, how do I let my sales leaders have what they need, and I partner for that, and that usually aligns closer with the revenue return. And you have a quote, I have a quote, I actually run a partner sales business unit. So I have a number every year that I have to hit, right to help support sales. And then the other side of it that I also run is the BD side of the house, which is much more around integrations and strategy and so forth.
Justin Bartels 27:14
And on the digging into the conversations with product, and do those integrations end up in the same roadmap as the product roadmap, or is it separate? How do you communicate with the field? And so they can communicate with the customers? What are we integrating with? Who are new partners in this space? And what does that look like?
Laura Padilla 27:32
Yeah, I mean, from it, like, if the API's and the integration points aren't there, then yeah, they'll end up in the roadmap, right. And they'll build those API's that our partners can plug into it, it does two things. One is about a universal API. So that we can have multiple partners, the same type just plug into that same API for scale. or, in the case of like Dropbox, for example, we actually build custom integrations with them, because to us at that point, we were deemed the most strategic partner and we thought the return merited right, and what they were also do, and they did the same thing on that side, as well. So there can be partnerships that will marriages, a custom integration, just for that reason. But again, there's usually a lot of modeling around that. And, you know, justification for the engineering resources.
Justin Bartels 28:19
Yeah, sound familiar, Jared.
Jared Fuller 28:21
Yeah, we've seen we've seen a little bit of that. A little bit of that too. We've done some I think our our Sumo so to speak has been typically Adobe on our side of the house has been our kind of like primary partner upstream. I'm curious for so you have these two buckets, which you know, sales and then like the BD side, on the integration ISB tech alliances versus traditional channel, maybe referral resell. I'm curious if you have a framework for a couple different things or if you have some thoughts that you might be able to share given that you've seen the story from earlier stage partner program to more mature or even industry leading right zoom. Now I could certainly say that's industry leading in the communication space. People often talk about market product fit. Whenever you're thinking about partnerships, I never hear someone think or talk about like market partner fit because maybe some channels or some programs are very applicable to some companies and not others and then some types of partners right like resellers bars right are completely on applicable to other companies. At zoom, it seems like you're touching every vector. Have you thought about that? Are you have any frameworks or thoughts around how to help companies start to have that conversation or maybe first time partner executives think about Okay, my first job before telling my CEO I need more money for more headcount is establishing where I want to invest. Do I have market partner fit?
Laura Padilla 29:54
Now that's a that's an awesome point. Okay, so overall market product fit you think of life In the VC world when someone's trying to launch a new company, and they think, okay, there's an existing market there for this product, I'm gonna disrupt it. Or this is a brand new market, and I'm pitching you to invest in this product, because I'm going to create a new market. And there's arguments both ways, right? There's arguments in like, that's way too hard to create a brand new mark is going to take too long, too risky. Not sure. Right? Oh, existing market, huge opportunities for disruption. And we've seen so many examples of that over the years, right? From VMware way back in virtualization, right to, to zoom right, in just the video conferencing kind of world. That's sometimes that's easier, right? Because you think there's a market there, there are buyers for this, I just have to have the best product, right. So when I think of partnerships, in that vein, if we're saying, hey, there's a market there, right, and the product is there, then, you know, how do I partner to accelerate this adoption of my product? That's how I would think of it right. And if we look back at things I talked about before, if I've been a tiny startups where, well, first of all, I have my own company, so like, I've been the only person selling something, so I know what that is like. And then I had an incubation for a small startup as well, we were just 10 of us still at Sequoia actually. And then I've been at the mid size ones like, guy, and I can I could have a whole discussion just on my theories on when to go into a company and all that kind of stuff. That's a whole other podcast, but we need to we need for
Justin Bartels 31:35
like a four part saga with Laura here.
Laura Padilla 31:40
Um, but um, you know, if you if you were at, let's say, a small company, okay. And they hired you as their first BD person, or a partner person. And they said, Laura, I need you to help me, I'm going to hire you. My advice would be, figure out what they're hiring you for? Because find is there will be a million different opinions. And even at existing companies I've run into this with the exact team will say, you know, like, oh, the value provided you asked when they all have different opinions on it. Okay, so my first advice is, ask what they're hiring you for? Because they will have an opinion for that they're hiring you for a reason, right? And either one, they're going to say, Hey, man, I really need you to help me sell more. Okay, cool. What does that mean? Exactly? Right. And if that's the case, what I would probably do first is align with the sales leadership, and understand the product. Now, if the product is this very complicated, expensive, hard to sell thing, like a BI tool or something like that, right? I think my argument there would be the way I'm going to help you sell first is probably through integrations, right. So like, there's a lot of you have to say certifications with the SA P is a world of sales forces of the world, like, open myself up. So I can get into those different customer bases, because they see the certified stamp, which is a lot of what I did at Nutanix. Honestly, you know, like I got to be certified with the right all the standard hardware platforms, all the virtualization engines, all that kind of stuff, just to know blockers for my sales team to go sell me into those existing customers, right. Now, if it's more of a product like zoom, where, you know, it's easier to sell to understand it's more of the line of business user price point, you know, it's op x per month, I would do kind of what I started is like, Hey, I could probably help you a lot quicker by start building out this robust referral network of partners who are just going to go out, there's tons of it consultants who work on SAS, who want to make money off of being able to recommend you, and they can do it can learn zoom pretty easily. Right? And start getting out there in the market. Right? So again, you have to understand your product, what you're trying to do. Right, and where are you being blocked from a sales perspective? Or how you can accelerate sales? So it's not an easy answer. Like, for me, I look, I really spent a lot of time on the product piece of it.
Jared Fuller 34:21
That's, I love your answer. Because one of the things that I think people don't realize, whenever they get into partnerships, or maybe they're a veteran is that most people are speaking from experience, meaning there's no go to market model for partnerships in business development. Like there's no degree, there's no book. There's no path. I mean, there's so many different things for marketing and sales for like how to how to build x function or go to market and b2b SaaS. But the reality is, the more people that I talked to, the more I realized that your ecosystem is bespoke to the company. It's based on your market opportunity how your product works, and every ecosystem is difference so you have to have these like general knowledge and then be able to translate that into what worked for you at nutanix is not the same that's going to work for you at zoom but being able to recognize the differences to go i'm not going to come in here and implement the same playbook it's just such a fascinating thing that we need to share more knowledge of and i really appreciate you doing that laura for the for the community
Laura Padilla 35:21
well that's why this is also fun a fun gym right because i it's never the same thing that's why i've loved it because i've done i did marketing when i first started out in tech and you know after a while it's kind of boring same thing over and over again and then did a little bit of sales and then i kind of landed in bd and alliances that i actually really loved because i'm like wow i'm talking to the legal team about contracts negotiating that have to understand the products out of it i have to understand mark you have to understand sales you have to understand all these different things and i think that's why this is such a fun job it's really cool but your point jared is also complex so you kind of have to really understand all the different pieces and and learn that you're there's no one straight answer for it
Jared Fuller 36:05
this is where i think the folks that have started to test market partner fit and they have you know some people sending you some deals and referrals your sales team starting to engage you have some integrations you're like wow we really could have an ecosystem here then what ends up happening is this translation from the company operating model and financial model into okay what the heck does this messy ecosystem how does this fit in i'd love to hear your opinion on you know because your specialty is kind of like the build to scale right like there's some basic validation like let's build this and then scale how do you work with finance or operations or translating your world into an operating model that kind of spits out some form of results or headcount
Laura Padilla 36:50
yep yeah no i've so zoom is very bottom line focus like we have a really amazing team and finance our cfo is awesome who really looks at how are we profitable how are we making money and you know to get a headcount approved or anything is like an mba in itself i joke because we have to go through so much stuff so what what i would say is it depends again on the ecosystem so like i talked around like this master agent community for example that we launched right it's a commission model so anyone who sends an elite if we accept the lead right we're gonna pay them a commission on top of how we sell it that is not a cheap model that is really expensive it's almost you could think of it as almost like an incremental expense on to every customer deal right and so we did a pretty comprehensive model for a few months actually on payment structure versus output so how much revenue did i have to bring into the company and i layered in my head count in my expenses so everything from like sales incentives and so forth right to merit that expense so we did everything from looking at okay what if we the commission model was 5% versus 15% right we pay maybe we just spiff up front but pay less residual you know and so we spent a lot of time doing that and i got a number as a result of it you know they said okay great lord we've landed on this this is competitive as a program your partners are going to be happy we don't pay the most you know but they're going to be content with with payment structure but i need this much in return from you and we just had to sign up for it right and so you know that sort of thing too is that you have to be okay with performance you know and you know there's been a lot of like what we've been talking about a lot of different bd or alliances teams right and i've been in some where like the there isn't as much rigor on roi right as you know zoom and i'll tell you zoom is extremely rigorous around roi that's one thing i would say i've learned a lot here is that i'm constantly thinking about like alright if my expenses this much what's the return going to be right and how am i going to measure that return as a result of that and that's just straight financial modeling so i have a person fpa who i work with and he does the models for me when we go through it
Jared Fuller 39:23
got to build that partnership not just between sales and product but also you know financial planning and analysis the finance department didn't work on that earlier than probably most folks think because that's how you sign up for a number right and well start to influence the headcount
Laura Padilla 39:41
yeah and also you it also helps you tell the story you know because there was a there's always perception that like oh the channel you know is really expensive we have to pay partners and all this kind of stuff it doesn't make sense but we actually plug it into a model and you say wait a second let's talk about you hiring This many direct reps, you paying them stock, you're paying them benefits, you know, you then you have marketing on top of it, right versus a partner that you're gonna have some MDF funding, you give them a discount, what is actually isn't really that much more expensive. And when you look at it, it really isn't, you know, especially when you look at different different markets, it really wasn't. So that also helped my story a lot to say, no, that's not accurate when someone's saying, oh, you're too expensive. No, I'm not actually look at the numbers.
Jared Fuller 40:30
And that's why you need the model. Because you can kind of explain those different vectors like customer acquisition cost, the structure of that's very different in your world versus the direct world. I'm curious does, is there any vector where you're looking at like net retention or churn like the other end of the funnel, where you're, you're saying like, Hey, here's why we're investing in, you know, integrations, for example. And here's what happens whenever we see seven integrations or two or whatever many, here's what it does to, you know, the bottom line, which results in, you know, X amount of dollars we should make why investment? Oh, yeah,
Laura Padilla 41:03
absolutely. It's a huge part of the story. I mean, churn is much lower in partner deals than it is direct 100%. Like, and by a lot. It's not marginally. And that's one of the big stories that I've always told to is like, hey, when you partner with partners, we're stickier. There are deeper seated relationships are less likely to rip you out because of those relationships. And the numbers show that turn is much lower.
Jared Fuller 41:30
Interesting. Do you are you looking at? You mentioned at the beginning of the call, things like you know, weekly active users inside of integrations, have you come up with any modeling around how to drive from like a customer success standpoint, even on the direct side. So let's assume a partner didn't bring in the deal. Your direct team sold it. But as you're evolving and seeing this platform play happen, kind of like right before us all, like a year ago, I think we launched the integration with draft It was like right at COVID time. Are you starting to see some trends around company health? And what's happening from an integration perspective as well?
Laura Padilla 42:05
Do you mean that if I look at the businesses that have integrated versus that haven't,
Jared Fuller 42:10
right, like kind of doing some cohort analyses? I think is, that's what I'm trying to get out from someone who might have seen scale is that a lot of ISV managers fail to look at some of those like cohort analyses, like what types of integrations who's active? Are they actually using it? Right? Like, there's a bunch of ways to measure whether or not it's impacting churn?
Laura Padilla 42:29
Yeah, absolutely. We're just starting to do that. And like, I'll give you an example. Like our instant SDK, we give 10,000 free minutes, right? So developers can come in, they can start playing with it, they can use those 10,000 free minutes to actually do the dev work. And then after that, they have to convert into an into a paid account and pay us for those minutes. And so I literally just had this conversation with my team, where I was saying, hey, that's a measurement for us, right? First of all, they sign up for these minutes, are they using these minutes? Right, if using them, they're never going to turn into a paid user, because they're not using them. So one of our programs that we're going to build with with our teams is talking to all those partners who are not using the minutes and say, Hey, you signed up for this canyon up? And why are you not using the minutes use some help? You know, does a developer Adam, can you just sit with you? Do you have any questions around the documentation about your dev account, all that kind of stuff? Because absolutely, if people are not consuming your product, they're higher likely to churn. And so we have definitely have a whole team at zoom just in our application site around that looking at all those metrics, and so forth. And they do look at that, like we have a CSM team that helps part customers when they onboard to make sure their consumption is high. And we do look at that. And then those are tied to churn numbers as well. And we're just starting to do that on the API side as well. That's fantastic.
Jared Fuller 43:54
Maybe one question to round it out for me on thinking about how maybe you've done this in the past or zoom. Part of the challenge that I've been personally running into is understanding what needs to be centralized functions versus embedded functions. Right. So there's, I built this crazy chart Justin still thinks I'm crazy for building this. This if you heard of Miro Miro, like the workflow planning tool,
Laura Padilla 44:20
Jared Fuller 44:22
Oh, it's it's gigantic. It would take up the entire size of my wall back here. Like it's it's huge. The actual file of like tech partner programs, serve as partner programs, all the centralized resources, and then the embedded resources across product marketing, sales, etc. Do you have any philosophy on centralized versus embedded resources and like what functions need to be controlled by your team versus partnership that you need to develop with the internal team?
Laura Padilla 44:53
That is always a very complicated question because every group does it different and And there's different philosophies, I think, look, I think the bottom line is, if you have a culture of collaboration, not politics, and there's a one liner from, you know, I would say you don't have to focus on that so much, right. And the good, that's an awesome thing about zoom, we're all very flat, and everyone worked really close together, I've worked at other organizations where that wasn't the case. And you cause a lot of conflict, right? Like, you're, like, you know, I worked at one company where, like, the, the partner marketing team didn't really feel the need to take direction from me. They're gonna do what they want it kind of thing, right? And so it was constantly this, this conflict of like priorities and what we're going to be doing and roles or responsibilities and all this kind of stuff. And it was like, Well, what a waste of time, right? And so, in an environment like that, I would have said, I'm pulling that in to report to me, because I'm tired of this conflict. It's not working, right. But then I've had other organizations where there wasn't that conflict, and it didn't matter. So culture has a lot to do with that answer. I would say unfortunately, now, the pieces that I think makes sense to centralize either way, or like, like the, like at zoom, I own the partner programs functions. So really, in how are we defining the partner program, the program requirements, the benefits, what partners are signing up for all that kind of makes total sense for the partner leader to own that, just because you want to have a hand in what you're defining and building. And so that I definitely centralize, and it's a global function. And we own every partner flavor, right? So the way we're building it is okay, I have a, a lead for partner programs globally. And he's hiring someone who's on disty, and reseller programs, and owns that, and leads a team for just that. Someone who owns or service provider partnerships. And ISVs. Actually, because a lot of integrations there, someone who owns our program around master agents, and referral community, and then special programs, so we have kind of leaders around each of those ecosystems to find all the different programs. And we review that. And I actually also own partner operations as well, I decided to just roll that in, on my team, just because we were collaborating so much, it kind of just made sense to do that as well. And that can go either way, you know, at other companies. But, but like, traditionally, marketing, SES, you know, those product, all those other functions, I think sick fine. And the other teams, as long as you all collaborate well together, like, you know, at zoom, you know, I have an SC team just dedicated to partnerships, and I work with the leader, and he, and he's marrying his headcount, according to how I'm growing my team, right. And then we worked really closely together, same thing in product, we just hired a lady who was going to build out the partner program, sorry, the product management function for partnerships. So actually, that's all she's gonna do, you know, an all in just that. And it was a huge gap, by the way, cuz before that, you're just begging for product managers to work on your thing part time. And that was, yeah, it's very painful. You know, um, and so what I've tended to do around that, once there is product management managers aligned to their specific product, or ecosystem or solution, I usually tend to pair up a BD person with that product manager. So let's say like at Nutanix, we had a product manager, just focused on backup and recovery. I hired a BD person just on backup and recovery, for example. And that person worked with that product manager. And they built out the ecosystem made sure all the integrations work, make sure the product roadmap was aligned with our partners made sure all that kind of worked on like the tech side of it. So again, it depends a little bit on how the organizations are structured. But the most important things in the organization is collaborative. You're kind of working step and step. And then you're being also you have to advocate internally, like you have to really advocate and sometimes fight for what you need and be vocal about it.
Jared Fuller 49:24
I can't think of a better way to end, Laura, this has been an absolute blast. But before we go, right, this is the standard plug. If you want to follow along in the conversation, make sure you come join us in the cloud software Association. So come join us on slack. There's 4000 partnership professionals and the only way you're going to learn is by listening to folks like Laura and collaborating and taking those lessons into the community and kind of seeking some feedback from peers. So come check out the cloud software Association. If you're listening to us on Apple podcasts or Spotify or on your Alexa device, hop over to YouTube to we're also there so you can see just Amazing hair, he's always got much better hair than me.
It looks pretty good. I'm pretty happy with
Jared Fuller 50:06
and make sure to like and subscribe on YouTube and leave us a great review with content like Laura How could you not Laura, thank you so much for joining us on partner up and we will have you back because this was there's like five tracks I want to go down here with with everything that you said today. It was such a fantastic show.
Laura Padilla 50:24
Awesome was awesome to meet you guys and thanks so much.
Justin Bartels 50:29
Awesome. Alright, we'll
Jared Fuller 50:30
see you next time partner up. Yes. All right.