028 - Godfather of Ecosystems - Forrester's Jay McBain - Early Innings in the Decade of Ecosystems

Ok, so I might have gotten carried away with the title.

But that's for good reason. If you don't know Jay McBain or even if you do, prepare for a 45 minute masterclass on Ecosystems.

There's a reason I am henceforth referring to Jay as "The Godfather of Modern Ecosystems."

Talking all things ecosystem, indirect, channel, partner, etc with him is like showing up to a UFC main event as a white belt in Karate.

In this show, Jay breaks down why he is calling this decade "The Decade of Ecosystems," and makes some bold predictions on the next TRILLION dollar SaaS company.

This will be one for the books and to share with every executive and colleague at your company. Follow Jay's writing at https://go.forrester.com/blogs/author/jay_mcbain/

Don't forget to subscribe on Apple Podcasts, Spotify, or anywhere you get your pods on the go. If you liked the show, give this episode a like and share on LinkedIn and tag us in.

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  00:01
100% we are back, Justin Happy Tuesday at We are here with a very special guest when we were talking beforehand I got my run run run shirt on Justin, you got your I don't know you don't wear a tire you just have giant muscles even though your, your your wider than you are tall. And then we have Jay, who's, what are you doing right now? Jay, you are. You're cycling all across America, right? Canada, all over. Yes.

Jay McBain  00:28
I'm a Canadian that lives in southern Florida. And as a Canadian by law, we have to play hockey. And when the pandemic came, we had to stop playing hockey. So for the first time in, you know, 46 years, I'm trying to figure out what I do for exercise. And I went out and jumped on my bike and rode 50 miles and thought, you know, once a week, I'll do that. And being an analyst, I put that on a spreadsheet. And then I the point I made it from Miami to Toronto. I'm like, Hey, this is getting exciting. I'm going to keep on and you know, go to my dad's house in Calgary, virtually my mom's house in Vancouver, and then, you know, maybe turn south and do a full North America. So at this point, I'm at like, 4000 kilometers. And now you know, every Sunday I'm knocking off a different state or a different province. And yeah, it's just become a thing. And I didn't think it would be a thing, but it's a COVID inspired exercise journey.

Jared Fuller  01:16
I think, what will comment did we make before it's it's very fitting because ecosystem is an endurance sport. that's a that's a quotable takeaway from this, this episode of the podcast, but we're super excited to have Jay, who you lead all of the channel and ecosystem kind of analyst division at Forrester. Which, if you haven't checked out Jays content, please do. I have wrote I'm not kidding, Jason's I started following you. I've written and Justin's seen some of my manifestos, dozens and dozens of pages of content of my synthesis from your insight, right, like, it's incredible. So go check out Jay on Forrester. And I also have some news. One announcement and then one new thing that I want to cover real quick. We're back as a partnerships community. So if you haven't seen it, cloud software Association, SAS connects back. So go to cloud software associations website, I'm going to be there this fall, Justin, I'm going to make sure that you're there. It doesn't matter what drag you out there. Everybody. Here, we're

Justin Bartels  02:23
gonna bite there. It's gonna be a couple weeks.

Jared Fuller  02:26
Yeah, I don't think I could run there. But

Justin Bartels  02:28
you know, we'll just start running. And then over time, we'll pick a bunch of partnerships, professionals, and before you know, we got 300 people running, whereas the Vegas, Forrest Gump, we're

Jared Fuller  02:37
running, running. Totally, totally. So go check out clatsop research and join the Slack channel for ongoing kind of community and the events gonna be awesome. So if you haven't been, I'm excited to meet you all in person. And it's not official yet. But we're working on potentially something live with the podcast there. So go check it out. I believe the code is earlybird for the partner up podcast listeners. And then in personal news, most people that don't follow j as closely or as stalkerish. Lee is me don't know that the mcvane household is not just one it channel ecosystem of one. J, you have some news about your better half, right?

Jay McBain  03:22
Yeah, so my wife who spent, you know her first 13 years of her career at Cisco, jumping around distribution and telco and a bunch of different things, went off and was an executive at Office Depot and did some work in the channel with the consulting firm jazz group. Today join Cisco as their evangelists, channel leader, Chief of, you know, this new as a service model that Chuck Robbins has taken the entire company into a subscription consumption model. And she's going to be doing the community work and a lot of that great partner work to make that a reality. So we're very excited about that

Jared Fuller  03:58
in our household. And Congratulations, congratulations. That's, that's incredible. And I think with the, you know, that mind leading the charge and the dinner table conversations around ecosystem, if I'm thinking about playing against Cisco, in the ecosystem, I'm going to be a little bit worried. So I'm excited to see what happens in the coming kind of months and years with Cisco's ecosystem, because you've been said some interesting words there, you know, like community. And that typically isn't associated when we think of partnerships, channel partnerships, right community, what's that? That's like a separate thing. And I think that's indicative of what we were setting the stage with today, Jay, which was this decade somehow it's feeling different. I think the phrase you use was early innings in the decade of ecosystem. Maybe unpack that statement a little bit. Why would Why would we stake a claim that this is the decade of ecosystem.

Jay McBain  05:02
Yeah, so first and foremost, your it's more than a feeling. Accenture went and talked to every CEO in every company in every industry of every size in every country. And 76% of CEOs today, think their current business model will be unrecognizable in five years. And ecosystems are the number one reason why. So this is this is much more than a feeling. When I say it's a decade of the ecosystem, this is really the third decade. The first decade kicking off in 99 was the decade of direct sales, a small company in 1999 got their start being Salesforce, you saw a big sales tech stack built around it. They were one of 350 CRM companies back then. And at towards the end of the decade, they became a household name. Today, they're a dow 30 company, and on their road to a trillion dollar valuation. But in that decade, it was really interesting you entered as a salesperson, thinking that you manage your territory with your gut and you're born to be a salesperson, you exited that decade, managing to the seventh decimal point, and understanding the science of sales. The next decade was marketing, direct marketing. And there's 150 marketing automation companies in 2009. That we know when Eloqua got bought by Oracle par dot got bought by Salesforce Marketo got bought by Adobe, the first place player of the decade HubSpot is today worth $25 billion on the stock market. And unbelievable. So at the end of this 150 companies, these five super winners have defined a decade where as a head of marketing, you used to joke at cocktail parties, you know, half of my marketing dollars are wasted. I just don't know which half, you know, it was really funny back then. Well, today, they're at the seventh decimal point competing with that head of sales in front of the CFO on the board to get investment. Well, something missed in those first two decades of direct sales and direct marketing is 75% of world trade goes indirectly. Right bought your car last car from a dealer, you bought your last TV from a retailer, you bought your last jar peanut butter from a grocer, I don't care what company you are in, or what industry you're in, you're selling indirectly, for the vast majority of your sales. And you don't own the direct sales or marketing relationship with your customer, even though you think you do. So this decade is around those partnerships, who do own the customer experience, who do own the customer influence in terms of what they buy the transaction. And then for many now in the subscription model, every 30 days forever with your client is all about partnerships. And this is the decade, there's 183 companies on our tech stack today. And I'm getting calls from Wall Street every day saying who's the marquetta? Who's the eloquent? And who's the hub spot on these logos that we don't recognize today?

Jared Fuller  07:51
Right? It's um, it's an entirely new way of thinking about Sudhir, actually, with the cloud software Association on the episode that we had him on. I don't know if he use these exact words, but it was he communicated the similar sentiment, that it's a very myopic view, or maybe egotistical view to think that we can in this age where there's 400 to 10,000 advertisements per day, the average American is seeing 400 to 10,000 that came out in Detroit's 2021, state of digital marketing survey. And that stuck with me, I think I've said it on the podcast before, because How big does your ego need to be to think that you're competing for anything other than attention? Right? Like, how are you going to break through, and we have to shift our worldview to start thinking about where these people live and reside. And you've written about this, right like that the role of the channel, the role of partner people, is going to be less about solving for business problems, and more about living where the community lives, kind of going to, you know, you're your wife, and your title is around community. What does that ship look like? Whatever you're thinking about, okay, I'm an executive. And perhaps I've read one of Jays articles. And it's not just a feeling, but I think I'm going to take that bet. Not all companies are equal, not everyone's going to win in this because it's very clear that there are outsized winners in, you know, the decade of ecosystem, right? Where do we start in terms of like, you know, minimal viable kind of partner program and understanding if this is a path that you should go down? Or is this everybody has to transition this direction? And the ones that go all in are the ones they're gonna win? And the ones that don't don't? It seems like there's some sort of like ecosystem, you know, company fit model, where the ones that should be the market category definers go all in and the other ones, they're gonna have a rough time.

Jay McBain  09:51
Yeah, it's an interesting question. If I were to add on to the survey that you started with there, and then you know, the 10,000 things that we see every day. Well, guess what happened a couple of weeks. Google and Apple phone privacy religion for the last decade of marketing technology that you know, I kind of love labeled up about half of the 8000 marketing companies that we've invested in to run our mahr tech stacks just got neutered, because all the cookies, the targeting the, the the things that we've relied on these early signals have evaporated. And guess what every company in every industry who relied on that early customer data through, you know, these these privacy, invasions are now walking over to the partner executive and saying, Our average customer will wrap themselves around five different people and or companies to get to vendor selection. Our only way now to see those early moments, is through partnerships. And if we don't own one of those five seats at the table, which there's a high likelihood you don't, we need to influence one or more of those people around the table so that they're mentioning us early and often. So this race after influence Now, given these changes, and I'll remind you three weeks ago, all of our iPhones were updated with this new, you know, question, do you want to be tracked? and 96% of us have said no, I want to meet the people that

Justin Bartels  11:15
said yes, on that one. who's like, yeah, let Yeah, you know what?

Jared Fuller  11:19
I said? Yes. You said Yes, right. Yeah.

Justin Bartels  11:22
There's a couple where I was like, I do trust you and I could see how this would enhance my experience. But anyways,

Jay McBain  11:28
enough, I said yes. Because I don't want to see advertisements for like women's underwear and stuff. So I don't mind that, you know, after I go look at the new Ford F 150, lightning electric truck that, you know, Tesla's popping up on my feed and stuff. Now, that's the kind of stuff that I know there's no one sitting in a cubicle, like inspecting my personal life. Yeah, I understand. It's an algorithm that's trying to narrow the internet, for me the best I can. So most of us in the tech industry kind of understand the lay of the land. But again, 96% of people are pretty much want to be anonymous on the internet. And our buyers want to be anonymous, and they don't want to talk to salespeople, they don't want to talk and fill out marketing forms with the correct information. So guess what, in the decade of the ecosystem, there's a bunch of new technology companies that I'm following, that are doing this early matching that are doing these early signals, that are doing some really interesting data escrow work, to allow the partnership organization to do what the marketing organization did for the last decade. Really exciting times?

Justin Bartels  12:29
And would you say, like, we found that maybe we look back a lot of those shifts that you mentioned kind of decades, were in response to a changing customer preference? Would you say that this security preference is now bringing in, you know, the decade of the ecosystem? Or is it kind of a proxy variable, and other things are happening parallel.

Jay McBain  12:47
Also response, you know, for Apple, you know, they don't rely on customer data as part of their business model, like a Facebook What? Google By the way, you know, but a third of their business relies on that data. So they're making a big bet here, that having privacy, religion is the right thing to do. And they're going to replace that revenue in other ways. You think of the entire search part of their company in the ad tech and everything else. This is highly risky for them. But as a consumer, they own 99% share mobile globally. They also own 86% share a browsers on laptops and desktops, there's a high likelihood that everyone you know, and every one of your customers is getting to the internet through one of these two companies. So by them finding this religion a few weeks ago, it changes everything. And it's going to take, you know, 18 months to people, for people to figure this out and walk over to the channel chief or the ecosystem chief and have this conversation about this early journey. But you talked about Minimum Viable channel program, and VCP. You're not thinking anymore, just about transactional channels. That's only a part of your ecosystem. How do you get your customer your prospect to the dance, the influence champ affiliates, affinity advocates, ambassadors, Alliance, all kinds of new models there, of getting your customer to the dance, once they reach vendor selection and go to transact, there was more growth in marketplaces last year in the first three months of the pandemic than the last 10 years combined. You're not going to go through a full digital journey, and then go physical to purchase. I don't buy Netflix for my cable guy in the white van digital subscription. So I'm not going to buy Cisco, or Dell, or HP or IBM or any of these companies who have gone all in subscription consumption through a cable guy in a white van. It's all going to be digital. And by the way, in a subscription, the transactions only the first 30 days with the customer. So now I have to create a third channel that goes post transaction, I need to drive adoption of my product or I won't get renewed, I need to drive deeper integrations and stickiness or he won't get the retention rate. I need to drive upsell and cross sell for new innovations and new parts of my portfolio every 30 days forever to enrich the contract. All these things post transaction is a completely separate non transacting channel. So now I have to create three channels, that completely overlaid my customer at every one of those stages of their journey. And that's the new Minimum Viable channel progress,

Jared Fuller  15:13
I think, your article where you kind of talked about the trifurcation of the channel, I think he wrote that in 2019. So right over that last year, 2019. I'd read it a couple times and actually informed some of the changes that we just made a drift. And we've actually opened up a couple of roles now, where we have our first dedicated partner training consultant, which is there simply as a function of helping businesses kind of build on top of drift, right? Like we're, we're there not to make them transact. It's like, how do they make money, that this role is entirely around? How do they make money? And then on the delivery side, it's like, how do they make sure that they're doing a great job, and they're really, you know, it's a profitable endeavor that they, they love working with our business, right? So there's a presale function that's not about my dollars, and then there's a post sale function that's not about my dollars, it's about their dollars. Because if you look at it from the perspective of quota carries, which we have, and you don't have these things that are solving for the partner, you know, good luck. And I'm really excited to see that go head to head against my competition in the market. Right? So there's a direct deal. And I think we all know the answer to this question to some degree. But if you put two companies head to head, and you know, the one company is doing direct ads, and direct outbound, and another company has trusted relationships, the seats at the table. To me, it's not even a question of who's going to win the business. It's not not even a question. Like, in what other way? Are we today, influenced by an advertisement over a colleague appear or a trusted advisor? We just, we know it to be true. And yet, for some reason, when we think b2b, we throw all of that just what seems like natural knowledge out the window. Like, why is why is there that cognitive dissonance because I was victim to it. I mean, it really, it's taken me the last two years in a partnerships position to recognize the entire world that we live in and b2b is ignoring the way that the world actually is working today, in a lot of ways.

Jay McBain  17:22
Yeah, there's a couple of important things you said there for drift. One is this new role, which is to understand there's over a dozen different business models of partners that can make drift successful across that entire customer journey, gratification. But, you know, when I'm working with an affiliate, you know, my goal from a training perspective is get them to the point of being dangerous, that 32nd elevator pitch, yep, that's my entire, there's no competencies, there's no certifications and education and training. I mean, we're literally transferring enough to be dangerous. And then on the flip side, you've got a deep system integrator that's driving some really complex implementations. And there's classroom training. And there's all kinds of things to get to that level of certification to be able to do that, and everything in between. But the second part you talked about is also important, were realizing the opportunity of working with drift. And this is where I would challenge drift, which you haven't got to yet is to start communicating to your ecosystem, and quantify what that opportunity is. So a couple weeks ago, HubSpot came out and said it's $5.80. For every dollar of HubSpot, Salesforce couple years ago, came out and said, it's $4.65. Google Cloud, it's $5.32, the CEO of Microsoft got an A magazine a month ago, and talked about unlocking trillions of dollars of Microsoft partners. So unless you can come out and quantify what that multiplier is, and then work backwards in your program, how to, you know, not only do you have to technically enable your partners to go grab that downstream, it could be implementation integration could be security and compliance. It could be marketing, content, data, automation,

Jared Fuller  19:05
branded, my name is

Jay McBain  19:06
all kinds of partners participate there. But you got to map it out for them. You've got to show them where they need to develop skills, and you can help them develop those skills, map out what the repeatable processes and practices are. But in the end, you've got to elevate their confidence from a sales and marketing perspective, to go ask the customer for $10 or $3. For every dollar you sell. That's the future of ecosystems. That's the quantification of ecosystems. A couple of companies now are getting it right. And many more about 10,000. Others need to follow up quickly.

Jared Fuller  19:38
I have a direct follow on to that question. One of the biggest challenges that I think a lot of our audiences at night kind of like b2b SaaS kind of space, right? So they're digital natives subscription first, grew up addicted to you know, the the direct access to cheap channels and cheap customer acquisition costs, the world's changing and as we go through that process, We have all of these functions dedicated to making sure our employees know how to acquire, sell and retain customers. And yet, it's, it seems vastly under resourced. When, in comparison to doing that with people that aren't on your payroll, which is actually harder, right? Like, it's a lot easier for us to put together some training for, you know, hey, we're gonna hire 20 of these people. That's easy. But what about the 200 people that are outside of our walls? Do you have any guidance or resources or kind of follow on materials? How to think about that long tail of training and activation in enablement? That isn't just a normal sales enablement playbook? Like how do you typically advise companies to think about this outsize challenge of, hey, although that energy you're putting into internal enablement training, you need to put the partner hat on?

Jay McBain  20:52
Yeah, the one metric that 175,000 CEOs of SaaS companies are held to by their boards and their investors is cost to acquire customer. And then obviously, the lifetime value. The cost to acquire a customer is what you learn early in your journey. As you're developing your product, as you're getting product fit, as you're learning about the sales and marketing that you need to, you know, pull together in one place. It's easiest to think about it in another industry, like a restaurant, if you watch McDonald's and Ray Kroc, and that documentary, the movie, you're watching Starbucks, you know, they perfected that kitchen of that one restaurant, like to the millimeter of where the fry machine to the, you know how to best serve a customer. And they didn't go and franchise until they got that locked in. And then they figured, you know, to elevate sales, you just have to put a restaurant on every street corner of every town on the planet. Same with coffee. Same with other things, software companies that the same thing, you can't start indirect, you got to figure it out yourself, you got to make sure your product and your product fit, you got to make sure your sales and marketing engines working, you got to make sure you've created that kitchen before you start putting them on street corners. And then this model of franchising, you got to think through the processes, but the one number that every CEO knows is CAC the cost to acquire a customer, you have to start rethinking it in an ecosystem model. But there is cost there. And it's probably similar, at least on the outset, or more than what your direct cost to acquire customer has been over time. Why this industry and why all the major players in this industry like Microsoft is 96% channel is because over time, it is the most efficient, effective way to find new buyers to transact, and then retain them over the long term, every restaurant to be, you know, fortune 100 successful needs to franchise at that level. And every software company does as well. And you've got to break free of that thinking of what got you to 10 million of what got you to 100 million is not going to get you into the fortune 500. And that's the story of chance.

Jared Fuller  23:05
The Microsoft example is just it's so blatantly obvious. It almost hurts whenever you look at the example of slack versus teams. Right? Like if you were living in startup landia, you know, like, oh, slack is so cool, you know, in 2015 2016, like, like we were and then you don't realize like wait a second teams is that has the 100 million weekly active users slack has what 15 20 million. I mean, what, what happened, what happened was, you can't scale past where they were, they got the early adopters. And then the chasm kind of opened up, right? Like Microsoft had the trust and all of the verticals and the relationships and market to go, Hey, we got the office licenses in here. Let us roll in teams. And so much so that like Salesforce sod is one of their biggest competitive threats, right? Like they had to hop in and pay a bunch of money for a company that, you know, where they have to leverage their ecosystem. What other what other battles Do you see coming kind of like that? j that is, you know, a hot new company entering into a space where kind of an existing ecosystem is like, you know, fast follow. Don't take the take the cookie, take the idea and go, Hey, we're just gonna distribute this to us. And I think I saw a product thread the other day where they were saying, inside of drips, you know, great product rarely beats great go to market and I said, Great go to market never beats great ecosystem. Because slack had great go to market


Jay McBain  24:37
to talk about slack. Actually, about a month ago, I made a prediction that Salesforce was going to be the next trillion dollar company. And I went through nine reasons why it's a little five minute YouTube video if you want to play video later, but you know, the net of it is this is you know, you've got companies like Dell and IBM and Cisco and all these big companies, the client server They're not trillion dollar companies. They're not platforms at that level. And Salesforce is a small $25 billion company that found its way onto the Dow 30, you know, found its way to evaluation higher than or gold, they're just about to surpass SAP and revenue. I mean, this is a company like we talked about in the decade of sales, that's that's grown 30%, quarter and quarter out for 20 years, the most predictable company ever. Well, they did that via ecosystem. And they measured it, they use Forrester and others, and they measured it, they require 250,000 new partners in their ecosystem, to be able to drive 250 billion, which is their target in five years. What isn't spoken about, though, is they invested more in their digital marketplace than any other company. We actually stack rank every single marketplace on the planet, and Salesforce one, the bakeoff versus AWS, Amazon, Alibaba, you know, companies that know a lot about marketplaces, they outdueled them from a feature function perspective. And they understood that when they announced these 250,000 new partners recruiting, the same day, they shut down resell, all the dollars would flow through the app exchange, what they didn't announce, and what I expect in the next few years, is their multiplier of $4.65, or $1, turns into $5.80, five years from now. But they're going to start taxing at all, the marketplace is going to be a place where you buy sales for six other pieces of software, some hardware like HP greenlake, and then you acquire all of the implementation integration, security and services, which make up 64% of that number. Everything on the marketplace. So Salesforce, start charging you $6 instead of $1. The other $5, they're making 15% kinda like the companies like Apple, and Microsoft, and Google and others and Amazon that are in anti trust, you know, situations right now, because of it. They're truly platforms that get to tax their ecosystem. And by the way, if you do the math, in five years, that almost doubles the size of their company from 50 to 95, the stock market will give them a 10 time valuation, they will be the $6 trillion dollar tech company. It's

Jared Fuller  27:06
such a good

Jay McBain  27:08
marketplace number two, and taxation. Number three, that is way more interesting to investors than selling $94 billion of hardware.

Jared Fuller  27:20
without a shadow of doubt, I think that that prediction is a bold one. And I think a lot of people would never have saw that coming from from services. Right? Like, you might see that in some marketplaces where it may be something like a fiver, right, or like a, you know, some sort of outsourced Freelancer type, you know, gig thing, it's it's a marketplace, but then you think Salesforce or Adobe or Oracle or any of these kind of b2b marketplaces, and you think No, no, they can't do that. Yeah, they probably will, they probably will,

Jay McBain  27:50
that, you know, an Accenture, that's going to take a good chunk of that $5.80, like the gsis, they've got a cost to acquire a customer as well. Now they've got sales teams, they got marketing teams, if they get handed a deal through a marketplace, and they've got a multi million dollar opportunity through a marketplace, they will gladly send over 15%, because that will be their most attractive cost to acquire customer of any of the other alternatives,

Jared Fuller  28:13
just the same way that we're happy to cut them a check, right, you know, for bringing

Jay McBain  28:17
you all the software company and I was glad to cut Salesforce a check every time they brought me in a deal because I get my lowest CAC. So it's an indirect sale through Salesforce. And of the other indirect sales I was making that I had to pay 30% or 40% margin on this one was pretty attractive. And so it's a win and obviously a win for the customer. Because ecosystems are measured on value creation, co innovation, network effects. They're not measured on revenue and profit and customer set the way we measure channels in the last 40 years. And everybody's at the table and everybody wins all boats rise. Hence the decade of the ecosystem.

Jared Fuller  28:55
I want to one of the the ecosystems that I'm closest to right now is you brought them up at the beginning is HubSpot. I may be transitioning to them because I think they're such an interesting case study in how quickly they they ran Full speed ahead into embracing, you know, partnerships. It wasn't the case in the early days. Have you talked to Pete Buddha and how his relationship with Brian Halligan it's a hilarious kind of story. And he was banned from selling agencies like literally no came from Halligan. No, you cannot sell to agencies, but look where they're at now. And I think that transition, like I owned a marketing agency in 2012. And I was one time, you know, project based Creative Services. And your take on the agency landscape is like, Look what's happened in the past? I think you had some sort of stat on, you know, in the HubSpot era, you know, five years ago. Well, what are the number of companies that have like marketing agencies don't even look the same as they used to.

Jay McBain  29:57
There's 200,000 marketing agencies. With employees double that if you include single people, but 78% of them are now tech services companies, what they're doing the implementations and integrations and compliance and security on top of HubSpot. And so yeah, they're still doing creative and concierge and agency services. But those are somewhat commodity where they're finding 75% margins in the HubSpot ecosystem. And let's bring this full circle back to community. And the great work right at coffee software Association and happening in other places around community is HubSpot made a decision to hire a Scott Brinker, the guy that you know, pasted together 8000 logos on one powered slide that we all look at as the MAR tech stack. And they you know, gave him a title of platforms and ecosystems, evangelists, whatever that means. But he is a guy that can stitch together 200,000 Digital agencies, system integrators, bars, msps ISVs, those 8000 tech companies on the mark tech stack, and he's the one that can be a super connector, and drive a $25 billion valuation at HubSpot to 250 billion in the next five or so years. It is a community play. And how does HubSpot a fourth place company in the decade of marketing, start overtaking and now are overtaking Marketo and Eloqua. as they've been swallowed up by bigger companies. It is all an ecosystem play. Salesforce swallowed up Tiffani Bova from Gartner as their evangelist, I would suggest the drift, you know, starts looking at this kind of, and it's not evangelism the way we had it in the past. It's community management. It's the podcasts, it's the magazines, it's the associations, the events, it's the fabric, it's the subreddits. It's the slack channels, it's the discord, it's the clubhouse rooms, it is this idea of being open and public and inclusive of all the people that can take advantage of that $5.80 cent multiplier, and driving forward ecosystem first,

Jared Fuller  32:03
I think you said something important there too, which is it's kind of like a lesson for ourselves. And whenever I send this to Trisha, our cmo, because she's going to be getting this episode and DC, is, we have to have that multiplier though. And we've done a very good job at building community. Our brand is way outsize for compared to where we're at. I mean, what 400 person SAS company should really have a million monthly unique hits on their website. That's way bigger than we should be. But do they know what's in it for them? Right now they're learning. Right? They come to drip, because they're learning we do a great job of producing content. But how do they make money? is it part of their business lives. And that's just where the our ecosystem is starting to develop. And we have to focus on perfecting the motion and teaching them how to do the same thing. And that's what I'm going back to HubSpot. That's what they did. I think the thing that blew my mind about HubSpot, and it's like, there was a market in need of a platform to transition their business. And they didn't even realize they had it. Right. Like they did not set out to build this ecosystem from the beginning. They wanted to you know, help people create better experiences for customers. Let's take that what it is. But what they actually uncovered was all of these agencies, you know, let as you said 70% of them are now tech services companies in large part due to HubSpot, at least the volume right, the big ones, of course, related to other things. HubSpot ended up doing something that was not in their charter that was not in the series, a pitch deck. Right? That that was not the thing that they did. How do you know when you're coming up on that opportunity? or What advice would you have for people to start to think through that way? Because if it hadn't been for Pete, being crazy, and just being belligerent about this, I mean, even going behind how plugins back, Dan tire told me, he said, we might have never even done this, it almost happened by accident, and then they embraced it. How do you know if you're on a precipice of like a market that's in a need for the platform? Because I feel like that, that one person changed the trajectory of this business. I wonder how many others are out there.

Jay McBain  34:18
You got to go back and read Malcolm Gladwell, the outliers. A lot of times, you know, your success also leads to timing, luck, situation environmental, through their biggest competitors were acquired, you know, the right position, basically taken 150,000 Oracle partners in selling Eloqua into fortune 500 that took them away from the mid market and SMB and really hub spots core market. It was good for them. You know, Salesforce, the Marketing Cloud became this, you know, stepchild to the Sales Cloud and, you know, it kind of got, you know, into the mix, and now Salesforce has like six or seven clouds of which the Marketing Cloud is, you know, competing is one that paradox was And even the news exact and other things that made up most of that cloud. And then third, you know, Adobe picking up marchetto. adobe is a consumer company. And every day they're learning from marchetto, how to sell and b2b and b2b etc. And so they got slowed down a little bit. So you're in a market where three of your biggest competitors got acquired, and had to go through the challenges of, you know, leading their acquire into this market that they didn't really understand. So it opened them up to the opportunity to franchise and they saw these opportunities and very, very smart and capable people. Like if you read the outliers, and you know it, the idea is not to beat up Bill Gates and other people for when they were born. They know, these are Harvard people. But they also got a lot of help along the way, of course, and I'm gonna say HubSpot is, you know, brilliant executive team, they've hired brilliant people, they've got a great product, you know, all the checkmarks are there, but they were given an environment to succeed in as well.

Jared Fuller  36:01
Definitely, that I think that's the there's a humbling component to it, that we should all be recognizing that not everything is going to fall into place, which, you know, maybe to some degree, if you really are out there building the next you know, the next ending in the decade of ecosystem to be that force multiplier to a company be the Scott Brinker right. It's funny Joel rally was almost kind of that for a little bit because she was at I think every single one of those companies Salesforce, or goal Marketo and HubSpot was advisors at all of them and was someone that we've had on the podcast as well who was never officially in ecosystem. I'm gonna bring her back though she's she's been paying attention to you more than anyone she said. And I think she's like, all in on ecosystem. Now we finally convinced the social selling direct salesperson that ecosystem is everything. So I'll chalk that one up, she'll probably comment on this LinkedIn.

Jay McBain  36:51
She's absolutely brilliant. And she's got the resume. And I mean, I think there'll be a competition across, you know, many companies right now to get that kind of talent, you know,

Jared Fuller  37:01
bring her out of semi retirement right now, I think. I don't know, Joe, we'll talk we'll talk. It's, it's the Godfather, you know, you keep wanting to leave ecosystems pull you back in? It's 100% 100%. I mean, because he's seen all of them. That kind of going back to that last question. You mentioned outliers in Gladwell, that there's there's some opportunity or some component of like, right place right time. And never split the difference. You know, Chris Voss talks about that black swan event, that's always been a big thing for me, like, I haven't built the success to the jury that some of these people you've talked about today. But I have taken a partnership from zero to, you know, formative places. And there's always been that black swan event, there's been something that we did not realize was there that changed the dynamics of the relationship entirely. So if you're not familiar with black swan event audience go check out Chris Voss has never split the difference. It changes the dynamics of a negotiation go to market, do you have any advice for people, maybe around thinking through that like kind of going back to Pete in that pivot of people finding their black swan or that head of partnerships, or that CEO of uncovering the ecosystem opportunity that might not be readily apparent. Any advice around that?

Jay McBain  38:25
Yeah, I would say this goes back to community, you've got to break free of your boardroom. You know, I worked at IBM for 17 years, and Lenovo, and it was very difficult in the way those companies are organized to ever leave the boardroom. But the second I got plane tickets, and started going to events and getting into communities and getting into, you know, magazines and social media. Once I started hearing the chatter from our own partners, without the filter of the way they told us through partner advisory councils and stuff like that, I kind of got I got an education, I got an MBA in like six months. But by doing that, and so many companies like I would encourage them to kind of break free of the echo chamber that they're in. And there are disruptive people, and I list off the 100 Super connectors and the people that think differently. And, you know, while no one can predict the future, if there's people out there consuming mountains of information, and trying to put, you know, dots together in a certain way. You know, Black Swan events, like the pandemic, I'm watching the companies that hit a homerun coming out, you know, as we see the light at the end of the tunnel, versus those who struggled and, you know, still haven't got their footing. And, you know, that was an event no one could have predicted. However, all of the outputs of that the move to marketplaces this move into different models like product, lead and subscription consumption models and this changing buyer and the acceleration of a lot of these trends that were called, like you said, 2019. And a lot of my forecasts before the pandemic, were just put on steroids. It weren't new But they became black swan events because of something on the outside. And because you recognize these, because you had plans in place, people processes, programs and technology in place. When these things happen, you caught it faster than your competitors did. And you were already midway through the project, so you can accelerate the finish and make it happen. And so we don't, no one can predict tomorrow. But if we're looking at the signals, we're obsessing over our buyer, if we're obsessing over our partner experience and things like that, we're going to be better positioned than our competitors. Given the next event.

Jared Fuller  40:37
I can't think of a better way to and be focused on the market. Right? Not your walls, don't solve for the company solve for the market. That's where the answers are. And you know that that's one thing I'm grateful for. I mean, Justin, how many, we actually need to start doing this every time Justin, I end up podcast episode j, which will probably do it tonight, we press hang up. And then Justin, I chat about what we learned for like an hour. Because we're we're spending time outside of our walls, right. And that's the best way to learn what's actually happening in the market. When we talk to these agencies these size, these technology partners, in a lot of ways, it's sort of incumbent upon us living in the ecosystem, to make sure that we bring that knowledge back into the business and to pull along, you know, our teammates with us, I think that's, that really is at the end of the day, the job is to pull us out of the echo chamber and into the ecosystem. So we're gonna end there, let's do good. Well, I want to make it I'm working my

Justin Bartels  41:35
way through Malcolm Gladwell out and I'm a big Malcolm Gladwell fan. And it sounds like the recommendation here is you have to spend spend time with the mavens with if anybody's book is the individuals who are those, like Jay said, they're the ones who are constantly consuming content, they're at the tip of the spear as, as it pertains to innovation in that particular field. And they, you know, work with the connectors and the sales people to distribute the learnings to the rest of, you know, rest of the market. So an idea tips, and I thought I was like, oh, that totally came home when you brought up the the outliers example. And you brought up you know, the, Hey, get out in the field, get away from the boardroom. Talk to the people because your ecosystem blueprint is happening in the minds of the mavens right now. And

Jay McBain  42:21
let's do this fully back home, we started with a cycling journey. Yeah, I get three hours every Sunday to listen to podcasts and listen to my air pods. on Audible, I downloaded all six of Malcolm Gladwell books, and I went up to like 1.5 speed. So I've actually got through all six books a month. So the tipping point was a few weeks ago, the outliers was last week. I mean, this stuff is timeless. You know, people confuse me as a super connector, you know, there with a big Rolodex and stuff. And I'm not your people, right? He's a salesperson, because I'm encouraging this decade of the channel. And I take every chance to keynote every event, talking about the decade of the channel, but I'm not your salesperson, either. My place is as a Maven, I consume mountains of information, I get paid by Forrester to consume mountains of chatter, and try to just connect the dots and help the salespeople in to help the super connectors, make people unbelievably successful in the decade of the chip.

Jared Fuller  43:27
that's a that's a role model right there. If you want to know what you're going to need to do to be the ecosystem and partner leader of the future. Doesn't mean you need to go work at Forrester, it means you need to think about what Jay just said right there, right? Being that Maven, that men tap for my Dune fans out there that is consuming a massive amount of content, and is able to connect dots for the business that's based on what's happening in the market, not what's happening inside of your walls. Because guess what? And this goes back to Justin, why we started this whole thing. There are literally hundreds of books and volumes of knowledge on how to organize a direct marketing campaign, how to do outbound sales, but there's not volumes of knowledge on how to assimilate what's happening in the market, and change your business that just takes practice, right being in the market and seeing those black swan events before they're there and not being stuck in your own myopic view of the world that, hey, if we just read your revenue again,

Jay McBain  44:26
you're not going to believe this. But as analyst I actually know the answer to that question. Oh, I've got 17,000 books on Amazon on direct sales and direct mail. Oh my gosh,

Jared Fuller  44:37
that wasn't even I wasn't even close. Write that down 317,000

Jay McBain  44:43
on Amazon, to connect ecosystems and connect these dots from partnerships. There's 180 books.

Jared Fuller  44:51
Yeah, I mean, I know a handful of them like a platform revolution if you want to do alliances Sumo advantages, okay. But and then there's a lot of them Just outdated to like, there's not much you got to spend the time in the market. Go be the mentor at the Maven. We're gonna sign off there. What a great way to end J. It was an absolute pleasure. Before we go though reminder, go check out the cloud software Association. SAS connects coming up would love to see everyone in person early bird is the discount code for all of you that want to attend. And Justin, what are the folks supposed to do supposed to leave us a rating on Apple products is

Justin Bartels  45:27
five stars only? Drop a follow drop a subscribe. And let us know what you think. Let us know the questions you have about partnerships. We always love getting feedback from people that have particular questions, or they're just starting out in partnerships. We've been doing it for a while. We love to cover them all.

Jared Fuller  45:44
Absolutely. And I think we were gonna do I don't think I'm gonna announce it. But Jay, we're gonna get some swag made. I got to figure out what's cool about partnerships. So if you have any ideas about what's cool about partnerships, I got to get some swag made and we're going to do some contests for the audience. I think I'll drop the the artwork next time but maybe we should just do mavens right partnerships and put the mavens up front I'll have the J McBain shirt. We're gonna Peace out. We'll see y'all next time.

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