What's up PartnerUp!
Today we are geeking out on my favorite topic of all time -- strategic partnerships.
You know what I'm talking about - the underdog partnering with the market leader. The David and Goliath. The Cinderalla Story. Strategic Alliances!
And we're delighted to have the author of one of the very, very few reads on this market shifting motion, Mark Sochan of "The Art of Strategic Partnering, Dancing with Elephants."
Available on Amazon of course :)
So tune in and learn from the legendary author of this fundamental read. Even Geoffrey Moore (total fan over hear btw) says Mark knows his stuff (yes, the Crossing The Chasm author endorsed this book!).
Oh and hey, remember to subscribe on Apple Podcasts, Spotify, or anywhere you get your pods on the go. And if you’re on Youtube, smash the subscribe and notify button.
For the Apple Podcast fans, leave a FIVE STAR rating -- because Michele won't accept anything less.
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Transcript
Jared Fuller 00:12
Alright, what is up partner up? I'm wearing my favorite shirt. Again, this is Michelle seen this one one too many times. Nobody cares work harder. And I'm excited to be back with you this week. I've talked a lot about how there's no like definitive work on, on partnerships. But there are a few seminal works that have started to kind of come across my radar. So we have one of the authors of one of the key books, there's a very small number, Mr. Mark Soulshine here. But before we hop into the guest, Michelle, we have some news, which is some crazy news by the time this airs. It's a little little kind of sad that As of recording this pod, it's like my last official week at drift. So, so coasting together, but not working in the trenches, like we have for the past four years.
Michele Albanese 01:01
Yeah, super bittersweet. You have been my partner in crime for the last three and a half years. So it'll be tough to see you go. But I'm excited for your next venture, which we will probably talk about a little bit later. But I think this is a massive opportunity for you and excited to continue to learn with you through this podcast and this ecosystem. So it's been great.
Jared Fuller 01:20
I'd say 211 1,000%, I think I'm excited to get back into the entrepreneurial roots. I've hinted towards that I think partner leaders can be the next wave of entrepreneurs. And that's my early background. So I won't drop the news on this podcast. But you will see me as a co founder of a new venture, and there will be a big partner focus in terms of that next, next roll. So excited to hop in and then talk about probably my favorite part of partnering just did a cloud software Association masterclass on this, which is strategic partnering and have the book right here. And then now we're going to bring in the amazing author, so of the art of strategic partnering, dancing with elephants, Mark, welcome partner up.
Mark Sochan 02:05
Well, thank you. Nice to meet you, Jared. And nice to see you, Michelle,
Michele Albanese 02:08
thanks for coming on work.
Jared Fuller 02:11
Yes, I say it's my favorite part, because maybe I'll I'll frame. I think today, obviously, the book title kind of gives away a lot of what we're going to be talking about today, dancing with elephants to kind of positions that, you know, you might be in this David and Goliath situation, so to speak, right. And I've always been in startups. So I've always kind of lived in that world, right? I haven't been in big companies and partnered with other big companies. So I loved the framing and kind of how you put the book together. But the reason why I think strategic partnerships, there's just such a, you know, Keystone, a cornerstone of a company's go to market really starts from your entire ecosystem kind of starts around that massive big alliances there. And then you can kind of have more tech partners that fall through from underneath that more customer relationships, perhaps channel relationships or service relationships. That's kind of like my viewpoint on why getting the strategic partner right, might have outsized effects to getting 50 other smaller partners, right. So before we dive into kind of like the timeline of like, how to really dance with these elephants, Mark, maybe give your perspective for how you might talk to a CEO because you're managing director CEO quest, right? And you'd help companies kind of figure out this problem. How do you talk to your clients about why strategic partnering is perhaps the cornerstone of building an ecosystem strategy?
Mark Sochan 03:38
Well, I love talking to CEOs and executive teams about their strategic partnering strategy, because I have personally lived through a number of startups that have had tremendous success, created a teknicks value bomb, and ultimately, successful m&a acquisition, because they had a strategic partnership strategy at the core of what they did. And, and I wrote the book, The Art of strategic partnering, dancing with elephants, because I wanted to share this topic, which I don't think is well known by a lot of CEOs. And basically, what's not known as how much impact the largest elephants in your industry can make in your business way more than a smaller midsize company.
Jared Fuller 04:27
So tell me how like, if a company is coming to you and saying, Hey, we were trying to figure this thing out, they come across your desk, and you're going to share some of those stories. What's the framing that you need to align on with that executive team of like, Hey, you're going to work with me? You need to understand that this is that X or Y level of importance, and here's why. How do you level set on gaining that kind of alignment before? someone's like, hey, like we just need a partnership with Salesforce like figure it out partner people like they come to you because they want to elevate presumably the the level of importance of that partnership might have, how do you go about having that conversation with the executive team?
Mark Sochan 05:09
Well, you bring up a great problem. I was talking to David, we're at Bessemer ventures. And he said, Mark, you know, typical problem we see is most CEOs, their product, people at heart, and they've done a tremendous successful job of building up the first few key critical customers, and then they get to Series C, and the board says, Okay, we got to scale, go get us a bunch of partnerships. But the CEO who's a product person at heart, they don't know anything, but alliances are strategic partnerships. So they hire a VP alliances, and the goals are wildly out of sync and out of alignment. And then you know, there's a big mess at the end. So the better way to do it is you get your management team together, your key stakeholders, and, and you do blue what I call a blue sky exercise, you say, Okay, if we could have any partnership, we wanted to, which are the blue sky partnerships, which are the ones that would really move the needle for our company, which ones would give us a, you know, 10x value bump in our valuation would get our investors excited, get the analysts on board, and the customers would see us as a safe choice to buy from. So the first step is just getting the key stakeholders on the same page about really envisioning what are those big partnerships, that would really make a big difference.
Jared Fuller 06:26
And I think you start that journey, you know, once you kind of have that blue sky exercise in front of you, maybe it's a part of it, or it's a prerequisite to it, of identifying like, so you said like, 10x, you know, value would get people excited. But maybe it's it's a step before step after, why are we doing this? From an executive standpoint? So like, there's a couple different ways, the way that I typically think about it is from a market like competitive moat, or competitive differentiator, right. Like it's a, it's a way to surround ourselves with someone bigger, that can prevent either the incumbents from coming down to us, or the you know, upstarts and disrupting where we're at, typically, what do you find is the the way that you get that alignment on like, why strategic partner? Obviously, there's the economic benefit that might seem evident to you, or perhaps me, or Michelle's, you've seen some of this as well. And Michelle's giving a talk on this topic, too. How do you level set on the Y? Because I feel like that, absent that everyone has different ideas of what the strategic partner might mean.
Mark Sochan 07:30
Yeah, no, you're absolutely right. You got to get everybody on the same page. But the why. And here's my take on the why the first is, most startup companies, you got zero brand, you got zero credibility. Customers don't know who you are. You've got literally pretty limited resources, especially on the marketing side. So it's not like you can go spend a million bucks on a big advertising campaign. So how do you go get the leverage? Well, one of the best ways to get leverage is you go strategically partner with the biggest elephants in your industry. So the Microsoft's the Amazons, the Salesforce, the ServiceNow, those the guys who have a big brand, have large customer base. And if you could figure out a way to strategically partner with them, you automatically get access to that world, you get that brand enhancement, you get that market visibility, you get access to the customer base. So that's the why getting access to customers getting market visibility and awareness.
Michele Albanese 08:30
So once you've decided on who those key partners are, Mark, like, where do you go from there? You just mentioned, right? Yours. You're a small startup, you're a small fish in a big pond? How do you get these guys even paid attention to you? And how do you present like the value proposition that to me jointly had between the two?
Mark Sochan 08:47
Well, great question, Michelle. First thing I'll tell you don't start at the partner organization. I just did a podcast with the partner strategy network that I do with Wesley quail, and we just did this podcast about never talked to the partner lines, people. And and I don't mean in a bad way. It's not that the partner lines are bad people, but at the big companies, the partner lines, people are there to control things to be gate peep keepers to, you know, make you jump a bunch of barriers. And ultimately, you're just trying to get access to to the executives who can actually make a decision. So my suggestion is, if you can go first to the product people Chief Product Officer, VP product management, Director, product management, go to the people who own the product line, who owned the big strategy for the company, and make a pitch of how your startup has an incredible innovation, or fill some key hole or missing gap in their strategy that gives them a major competitive advantage. So for most startups, what you're offering the big guys is you're offering an innovation leapstart an opportunity to leapfrog the competition
Jared Fuller 10:01
So this is where I brought this book up a couple times, and I don't know why I keep referencing it. I don't think it's that good. I think your books a little bit better mark is the sumo advantage. But I really love how he talks about, you have to be an entrepreneur to win these types of relationships. And what you just said is kind of indicative of that same perhaps truth that I think might exist in that you're trying to go in with these product people. But if you don't have an idea, you're or some thesis or some hypothesis that you've tested, run some sort of proof on like, here is the baseline are Better Together, you're not going to get their time. Right. So going into that meeting, with the product or outside of partnerships. Typically, are you helping companies identify? Or do you have a framework for going hey, here is that, you know, one plus one equals three? Or, or because I feel like if it's not the CEO, if it's not the founder, if it's not that entrepreneur, and it's just a hired partner gun, they might be going and trying to get the relationship but not have the secret sauce, what I've called The Black Swan moment, but it's a direct ripoff of Chris boss from never split the difference. How do you help companies or guide people through like, Hey, before you go get that meeting with the CPO you better have something good to talk about, which isn't your small company. Okay, what what's she gonna care about? Right? How do you go about building that? Or guiding companies through that process of identifying? Why should they care?
Mark Sochan 11:33
Well, you hit the nail on the head, which is, it's not about you. Nobody cares about your small startup company, you got to do your homework about for the elephant, what's the major problems that they're facing? So you've done your homework and you've figured out okay, we know that competitively. They have a huge gap in this area. They got particular, one of their archenemy, big competitors are breathing down their space, or they're trying to crack into this new market. And you're gonna come there and present on their terms in their language of how they can do this. So absolutely. It's all about brainstorming, edit, timing, and being very clear about what's the value that you're going to bring to them. And in this exercise of creating the top 10 strategic partner priority list, I evaluate all the partners on three dimensions, obviously, the value that they could bring to us scale of one to 10. But more importantly, on a scale of one to 10. Realistically, how much value do we bring to them? Okay, if we're only bringing like a two at a 10 value, I'd say go focus somewhere else. And then the third is kind of a realistic assessment of okay, how difficult is it going to be to execute this partnership? You know, I remember doing a deal with Oracle years ago, and we got the deal done. But that's not their model, versus there's other companies like Salesforce, that really have a deep partnering model built in where they're trying to build up that ecosystem. So getting really clear about what's that value that we can bring to them that help them achieve their strategic goals.
Jared Fuller 13:06
Typically, in that conversation, I'd love to maybe dive through an example like, I'll share one on my side and see if one comes to mind for you. Yeah, like, in the Marketo, and drift Partnership, which turned into the Adobe and drift Alliance, there was that Black Swan moment, the thing that was true that no one recognized is true. That was like a big aha moment. I remember Joe Rowley and Bobby Napoletano, who's been on the podcast, and it's kind of friend mentor of mine, and some of the team at Marketo. And myself, like we literally high fived at the table, which was really awkward and weird. Because that like never happens in real life. Like it was like something out of a stock photo, I think. But there was literal high fives across the table at this conference, because we realized that what we did for them, was there individual contributors on the CSM side, that we were the number one driver from an integration standpoint of net dollar retention, because we added more contacts to the database, which allowed for so it wasn't that we were just aligning to top level strategic objectives is that we could go all the way down to the individual contributors, they'd be responsible for this, and their core metric, right? The persona of like, okay, here's the 150 people that really need to activate this dirty aligned. And that's the stage where I felt like the dynamic change and it went from hardcore negotiation about certain points to let's get this done. Do you have an example or a story because I feel like that's like a, that's like the thing that needs we need to get more stories out there for the executives to like, see these things. Do you have a story or an example that might demonstrate Okay, here's how we got to that aha moment.
Mark Sochan 14:48
Yeah, I have a couple of stories. I mean, first off, one of the tips and tricks that I give to CEOs is the right number of strategic partnerships is any number except for one And then not that often surprises people. And the reason I say it's any number than one is because you want a portfolio approach. It's such a power dynamic imbalance when you're the startup and you're dealing with this mega multi billion dollar company, that one of the ways these guys often respond more to competitive pressure. And so the fact that you can say, for example, I was doing a deal with SAP years ago, and I had trouble getting access to sa P. But when I got access to some of their competitors at the time that PeopleSoft and Vaughn suddenly I got the meeting with sa p 70, was a lot more relevant because they saw that I was doing stuff with their direct competitors. So So that's that competitive leverage, I think is really important. That creates helps you create more leverage and carry a bigger stick than you would if you were just on your own. It gives you more credibility. And as far as the aha moment, I don't know that I've had a high five, flopping meaning I wish I did. But I tell you, I sense in the meaning you sense, when you're going from there being skeptical. I call it trying to pass a sniff test, you know, you're you're that first meeting 30 minutes, and I'm always trying to just hit to the high value stuff. And as soon as they start asking questions, that's right, no, okay, that's my high five moment. It's like, the tables have turned. And now it's a conversation that we're having versus me just pitching and, you know, waving my arms. And I also asked straight up, I say, Did this resonate for you, you know, is this hitting on any the topics of interest to you, because I see a lot of mistakes, where CEOs or companies will talk and talk and talk and talk. And they don't ask questions, they don't validate and say, you know, is this important to you guys, is any of this resonating for you, and so if nothing else, if you can leave the meeting, and even if you got shot down, if you can learn a few things about what they didn't like, then you can tune it up and get better next time when you talk to the next partner.
Jared Fuller 17:09
Right? In the in that kind of model of determining the aha moment. And being at the table, so to speak, we're kind of talking about the the business case that's going to get everyone aligned to you know, term sheets, so to speak. And then obviously, legal is contracting is almost like it should be done from a business standpoint, because you have the executive buy in you, you mentioned in the book, kind of like a brief hierarchy of like low value to high value. So like at the bottom rung is low value would be like, I don't know, maybe like CO marketing, right? So like, lots of companies cold market with brands that are similar to them, but aren't competitive, just because it's easy. There's a bit of an ego trap, right, like you both bring leads to the table. And so what no harm, no foul, but at the highest level,
Mark Sochan 17:56
you do a co branding thing, and you hope the other guy does all the work and brings you leads and no one brings leads for anybody, right? You know, you do the real.
Jared Fuller 18:04
Yeah, we've done we've done a lot. And I've seen that be successful, just from like, we're in a category that's wider than the category we're in. So let's say Account Based Marketing. So we're like conversational chat. We have an account based play, but we're not the ABM thing, we can go talk with people and you know, Account Based Marketing, where it's not competitive, it's complimentary. And you know, we have integrations with those people. So that's simple. But it's not a strategic partnership. That's kind of like low value easy, no big deal. But at the other end of the spectrum, you mentioned OEM partnerships, right? Like the degree to which it might be powered by or gray label, perhaps white label, we don't need to debate that. To me, if you're in this hyper growth or scaling phase, the friction that you typically run into is like, let's say you can negotiate the perfect deal and do this OEM partnership, there's going to be skepticism from that VP of sales, or that CRO or that cmo and be like, how are you not going to eat the sales team's lunch on this? How are we not going to compete with each other? So an OEM is kind of like the highest rung of that value chain? How do you go about figuring out like, before you come in here, like, Hey, are we willing to give the seed that space? Or, you know, work around that? What are some of the tips or advice that you have for, you know, if OEM or distribution, right, I mean, that's, that's one form of distribution kind of at the highest order isn't viewed competitively by the rest of the management team.
Mark Sochan 19:29
Yeah, it's a great point. And it's usually one of the things that does come up is a is a pushback about, you know, is this going to cannibalize our sales? And look, at the end of the day, I've always believed that channel conflicts a good thing. I mean, it actually means you're making a mark, you're making a dent in the market. I mean, most startups have the problem that just nobody knows about them. So I mean, you know, having 100% of nothing is still nothing. So with with, you know, an OEM strategic partnership I always try and create the deals so that there's some sort of restrictions or some sort of boundaries that protect the direct sales space from what the OEM is going to do. So maybe it has to be bundled together with their product. Perhaps it's some sort of restricted version, product, still a lot of value, but it's restricted in some ways. So that what the OEM is doing in seeding the market and creating lots of opportunities is creating a lot of upsell opportunity for the direct sales people. So every deal is different. But I'm always looking for that boundary, the definition of the water's edge, if you will, kind of what can the OEM do, working on direct sales teams step in and do something that's of higher value? Totally, because
Jared Fuller 20:41
that that initial seed use case so to speak, could be something where the sales team might be like, Hey, I'm passing up $100,000, you know, opportunity. But the reality is, do you want to try to sell $100,000 opportunity into an account that's cold, or to an account that utilized part of the solution in terms of their day to day you have the brand recognition? And then you get to go pitch the full value? So I think it's about zooming out. And I have to go back to what you said, because I don't think I've ever heard someone say this quote, is the channel conflict is a good thing. Yes.
Michele Albanese 21:14
I want to click into that, please. I would love to hear more about that.
Jared Fuller 21:20
Like, normally, partner leaders spend a lot of their time debating this point, right, and like, trying to eliminate channel conflict. There's so many cycles spent on that, in perhaps you have a different, I mean, by what you just said, you have a different perspective, it's like maybe there's a way to kind of empower a partner leaders to lean into that statement to be like, Look, this is a good thing. These are champagne problems.
Mark Sochan 21:52
Yeah, I mean, it is a topic, in my experience, it gets debated too much time around the management team table. And you know, guys, it's like, Let's go make something happen. First, what a lovely problem to have is that we're here in six months, or a year. And we're now having to figure out deal registration programs, because we're too successful in the marketplace. So I just often think it just comes from a lot of fear. In not in reality, the reality of channel conflict happening to meet doesn't happen that often in reality. So of course, you know, we're being smart about it. We're thinking about, Okay, how are we segmenting the market? Our OEM, what boundaries are going to put around them what restrictions so there's still a tremendous amount of value. But that OEM partners is serving us in the sense that they're opening the market, they're seeding the market. And, you know, our job is to be pedaling faster than the big elephants, and coming up with the next innovation. So our direct sales team always has something of higher value to sell into offer. And to your point yard, it's all about, would you rather have a warm account where we're already a trusted entity, or you're gonna want to be starting cold? I mean, and I think everybody knows, it's way better to have already a warm relationship, a trusted relationship, it's much more effective to sell from that perspective than from straight out in the cold.
Jared Fuller 23:20
Right. So moving kind of from that, I think you call it the magic moment. Like I call it the Black Swan, aha moment, in the book into, let's assume that you have decent buying on the management side, you know, the partners, their their ears are tuned up, and you kind of have the business case, you're kind of going into like the contracting component. And there's very little out there for strategic partnership templates. The reason why content wise I've over indexed on the business case is that I often feel like 90% of the job to be done is there. But even if you do get it done there, I feel like the management team wants to know, what made what, what could this thing look like, in terms of key contract terms to kind of think about, you lay out some kind of like frameworks and some parameters in the book. But what might be some key takeaways from that kind of contracting components that might help the management team understand, like, Hey, here's the bands that we're going to be talking about when we approach this partner that makes them an ease to be like, Okay, we're not going to give away the farm and 80% of our revenue, maybe kind of give some of the context for how you think about contracting and setting the stage before you you're trying to put these terms together.
Mark Sochan 24:33
Well, one of the first things I try and do is I try to have you know, a business value discussion kind of a market opportunity discussion with the other side. So, share with me, what do you see is you know, the best case like you know, the most amount of success in terms of sales dollars, number of net new customers number of licenses sold. And what do you think is the minimum or worst case So now you've got this this range of value, right? You kind of set your low watermark, and you've got the wildly successful mark. And then you got your goalposts. So you know, okay, hopefully, it's gonna fall somewhere in the middle there. So that's the first thing is I think it's really important to establish some goalposts of what's the range from worst case, minimum we're going to do to, of course, the whole blue sky, things are really rocking out of the park. And I think that's really important, because then you can start to dial in a little bit more about where, where the sweet spot is. The second thing is about exclusive if there's one hot button topic I have never ever do exclusive deals is a lot of pressure, especially when you're a small startup and you're dealing with the big elephant, you're going to get asked, but it's really easy to position away from that. And you just say, Look, we're a small independent software company, we're a lean and mean we're nimble. And to be a viable independent company, we have to be able to win more customers, it's a good thing for you. Because you don't want to have us dependent on just you. And ultimately, an exclusive is by the company. That's that's really what it is.
Jared Fuller 26:15
We hop in real quick on that point. I'm sure I know, you want to ask a question. When you say exclusivity, what if you get mutual exclusivity? What if you can prevent that partner from building buying or partnering with anyone else? And they're like the big sumo of the space, the big elephant? Is there? Would you go hmm, maybe at that point exclusivity for a year, like the first year or something like that would be worthwhile. And if you can get them to because I've done that before. And really in the first year, I couldn't go build another Alliance anyways. But I got to stop them from doing it, which was way more valuable. In that case, would you say that's an exception?
Mark Sochan 26:47
I would, I wouldn't go a year. But I have done deals where compromise and said, Okay, let's do something for three, four or five months, you know, maybe six months with the idea that there's no way that these guys could launch something else in that timeframe. I've also done it where it's been restricted. So instead of saying nothing in six months, it's like, how about just these two or three hot button competitive partners where it would create massive turmoil for your management team, if there was an announcement with your dreaded evil competitor, you know, a month after we did our announcements. So those kinds of things, I think, are places where you can you can compromise. But beyond that, yeah, I think if you're trying to be pretty stingy on how much you give on that kind of exclusivity, it's usually a bad thing. Not a good thing,
Michele Albanese 27:38
right. So you can call out specific companies that you would not want them to partner with as part of the agreement. So I wanted to ask, So Mark, if you get to a place where the joint value proposition makes sense for both sides within those bands, like you were mentioning, what about, you know, and I think you talked about this in your book as well, like the ability to get somebody active and over that honeymoon phase? And like, how do you keep the partnership going? But with the initial agreement, what if you can't perform right? What's the exit strategy? If this isn't the right partnership? Once you get into the weeds of actually diving in, together?
Mark Sochan 28:14
Yeah. Well, firstly, Michelle, I really want to call out and I did a write in my opening pages of my book, I tell the story. You know, and this is a true story that happened to me when I was at Crystal services of the makers of Crystal Reports, a report writing software, and we just inked this big deal with Borland database. And we were so excited. And then, you know, we bet the company on this whole thing, and then they announced that they had bought reports, myth or evil number one competitor, and we were done. We were like, Okay, how is this possible? And so, you know, what you realize is you can't put all your eggs in one basket, you have to take a portfolio approach. And to some degree, you got to assume that it's not going to go perfectly, there's going to be some hiccups. Now, that's an extreme hiccup. That's like the worst case pick up. But every deal I've done, and I've done over 200, OEM deals, it never goes as planned. There's delays, there's market disruptions, competitive things that happen, execution problems, delays in their product cycle. I guarantee you one thing, there will be some hiccups to the plan. And so you ain't the deal right away. I think it's about trying to be agile and trying to figure out how you're going to adjust. I call it tap dancing, how are you going to adjust to the deal. And so you may have signed up some pretty aggressive gives in terms of development cycles. But there's going to be things that happen pretty quickly where there's opportunities to kind of renegotiate or, you know, do some gives and gets to find a place where things are working or adjusting to the new realities. So,
Michele Albanese 29:55
to that point, right, the business is always going to act in their best interest, right, whatever. That means right. So how do you maybe this is diving into, like, once you're already signed in the partnerships kind of moving along? What strategy do you have around continuing to keep aligned with that business and make sure at that original value we decided on initially is still the same value? And how to keep ourselves on that path?
Mark Sochan 30:21
That's a great question. And one of the techniques is, insist on having, you know, probably a monthly check in, I think, an executive check in, especially in the early days, first six months or so forth, have that executive check in, you know, identify the senior executives on both sides, because there's gonna be a lot of stuff that's in the weeds. And, you know, there's gonna be problems. And then once a month, okay, check in, here's the value that both sides agree to, is this still true on both sides? You know, is there anything that's changed on your side or our side that you know, needs to be acknowledged or called out or adjusted? So I have that monthly, at an absolute minimum quarterly check in, you know, quarterly, you know, quarter can be a long time, especially in the early formative stages, the partnership to really validate, honestly, like, how are we doing, you know, where are you happy, where you're not happy. For the startup, it often gets frustrating. They're dealing with all the bureaucracy of a big company, I mean, driving crazy, you know, three people from the startup side, and it's usually pretty senior management people, executives, and they're dealing with a team of 30 on the other side, and it gets bogged down in the bureaucracy, because
Michele Albanese 31:35
the startup is so used to moving quickly where they're finding on the other side, there's a lot more red tape and a lot more.
Mark Sochan 31:43
Exactly.
Jared Fuller 31:45
In the on the back. There's a quote, Mark, and it's, it's from Jeffrey Moore, which crossing the chasm is probably been the book, I've evangelize more to friends and colleagues and family, even like my wife, more than anyone, like it's mandatory reading for anyone that really wants to figure out markets. It's amazing how, you know, Jeff's narrative in the 90s, when he wrote it is still true today. He left you a quote, right? He said that, like, you gotta read this. It's packed with practical examples, you know, and tactics. And I feel like strategic partnerships can kind of be viewed within the lens of Crossing the Chasm. And what I mean by that is, you know, in the early adopter phase, I feel like you probably should not be trying to nail that strategic partner, like, you need to have the social proof in that, like, let's figure out the franchise and what's working what's not. But then crossing the chasm feel like feels like that point where it's like, we want to nail this next vertical, or this next horizontal, this next persona. Do you feel like the strategic partnering narrative might fit hand in glove with crossing the chasm is like, I almost view strategic partnering is the bridge that cheat code to cross the chasm where a lot of companies fail? Is that useful framing helpful for companies to think about? Or maybe I'm like, way off base, and that I'm just trying to tie it together. It's something I'm geeking out on with you and one of my favorite books.
Mark Sochan 33:17
Well, I challenge you on that it might be a little bit different than you think. And but it's a great question. You know, when I was sitting down for breakfast with Geoffrey Moore to talk to him about the book and get his endorsement for the book, and I was very fortunate, I had the opportunity to work with Geoffrey Moore, when I was with crystal, he would come up to Vancouver, Canada, and meet with a management team on a quarterly basis. And he would go through our strategy and use incredibly inspirational guy to work with and he made us think outside the box. And when I'm sitting down with him at breakfast and talking about the book, he said, Mark, is there a certain stage of company where strategic partnerships are kind of the right place to engage? You know, is it seed is a Series A is a series B? And what I answered was, I don't think there is any point where it's too soon. And by that what I mean is, it's a competitive thing. When you're talking about strategic partnerships with the big guys. They're only going to pick one strategic partner, typically, they're going to pick their their favorite, if you will, they think is the most innovative or the best, smartest visionary, that's going to move into the, to the goal line. And I've seen that happen is obviously it's late stages, Series C or whatever. But usually it happens a lot earlier, it usually happens. You know, once there's a demo once there's some early customers that validated it. And so, what I often share with CEOs is how would you feel if tomorrow morning, you're opening up your inbox, and you read that elephant partner say Salesforce just announces strategic partnership with your number one arch nemesis competitor, how does that make you feel? If that feels like a gut punch to the stomach, then that should tell you something, it should tell you something that you got to be to the table earlier. And, you know, if you're not at the table, like how is the big strategic companies supposed to know you even exist? How are you supposed to learn about what they see as valuable and important? So I believe the earlier that you can get to that proverbial table, the better because at a minimum, you can get your name known to them. And I've never left a meeting with, you know, Senior Product Managers, where I didn't learn a whole bunch about the market and about their customers and how they think about the market that gave me ideas about how to refine the pitch and make it better.
Jared Fuller 35:51
Okay, well, I'll accept your argument with me, I was kind of sitting here thinking like, Hmm, I'm not sure that this is necessarily the right. The right perspective, because I think you really do need to nail your core customer, the early adopter, and then cross the chasm. But I think that's a great question that you asked around. You know, to ask your CEO to ask yourself, What if you're number one? Partner, right? potential partner, partner, what's your competition? Like? What a simple framework with an easy question to ask. And then it's like, maybe we don't want to risk that maybe it's really important early on, the challenge is still the same, you have to make sure that you have the value there. So if you don't have the value there, then it's like, look, who cares? If you're number one competition partners with your number one, you know, strategic, because you probably have an existential crisis, right? Not necessarily. Prices, right. Yeah, exactly. Exactly.
Mark Sochan 36:49
I mean, and every startup has, I'm, most, I would think, by virtue of having raised money gotten investors on board, they have a compelling idea. They might need to refine it, and I need to take it to the next level. But everyone should every CEO should have a vision, a vision that they can cast that should be exciting, and compelling. And if it's not, what better place to learn from these large ISPs that spend millions of dollars on analysts and on research and customer research, they have a lot of insights. And so they can give you some really valuable feedback on your pitch, what's resonating and what's not.
Jared Fuller 37:26
You get to learn from the market. And I think that perspective is insanely valuable. It's what's interesting is that as you mature, so if you're in the early startup organizations, right, there is typically no corporate strategy role. But as you get bigger and bigger, that corporate strategy role typically has normally see like the purview of partnerships, you know, like alliances, partner channel, etc. Because that organization that that line of business or, you know, overlay to the other lines, typically has the best point of view of the market. So early on, you know, you can get caught in the trap of just being stuck in the customer. And that sounds great. Like, you want to put the customer at the center of everything you do, you have to. But if you're doing that at the expense of like, what's actually happening in the market, one layer beyond, you can actually get in this trap, where you're just trying to like solve for problems and firefight where the market is going in a completely different direction. It's valuable, if nothing else for those types of insights, like how is the big or the big people thinking about this? Because they have corporate strategy. They have a perspective on the market that you probably want to understand. Right prior to anything he's building that relationship.
Michele Albanese 38:38
Should have a chief market officer, right, Jared, that's focused on we said it before.
Jared Fuller 38:44
Yeah, actually, you know what, I threw this out and actually a couple people was responded to me on LinkedIn about this mark. I'd love your take is I think in the future of ecosystem, you know, people on like Jay McBain from Forrester, you know, some some really smart folks like Authentische, the high board of directors, HubSpot, Google ServiceNow, Salesforce, and I thought, like, Look, if ecosystem and partnering really is, perhaps one of the biggest levers in this vein calls the the decade of the ecosystem, that how do we align everything together from the perspective of the market, and I said the new cmo should actually be chief marketing officer where sales, marketing and partnerships rolls into her. Because you need those things to work in concert, not from the perspective of how you work with the customers and how you reach customers. But what is the market point of view? And then how do we kind of work together within that? What's your take on that? Do you feel like the misalignment that perhaps might exist inherently in marketing sales partnerships, on might sit better under one that kind of has that purview of market first, a second?
Mark Sochan 39:55
Well, what you got me thinking about as you were speaking was product like growth company. When I was CEO, a partner pedia. We didn't have a big marketing budget. But we had this concept of creating enterprise app stores. So kind of taking the Steve Jobs idea of app stores for consumers, and how can we apply that to the enterprise? And, you know, we're thinking of how do we get this new category known in the market? And we realized, well, let's just make it so anyone can come to the website and quickly spin up their own private branded enterprise app store. And we'd go through the log list to see, you know, who had requested a demo? And one day I look and it's Coca Cola. Wow. Okay, that's a big company with a big brand. And, you know, we followed up with the the person who requested the demo. And it was an incredible conversation, they had really thought through how they wanted to use the product, they had done their market research. And ultimately, they were giving us new ideas about uses and features for the enterprise app store, that they would find extremely valuable, that we hadn't even thought of. So in answer your question about like, you know, could sales and partnering fit underneath the CMO? I mean, absolutely. If it's this product lead growth, then you might really be thinking about it first, from the perspective of how can you have this amazing out of the box experience for customers, where they can discover the product on their own, where they might also be able to give features and suggestions of how we're the market is where the sweet spot is,
Jared Fuller 41:35
right, that feedback loop, I feel like, it's, it's really hard to describe to people and I feel like I only had this realization, halfway through the podcast, we're coming up on like, the first formal, actually, we just crossed the first year that, you know, Todd, this, I saw in Riverside today, that's like, you know, 60 plus hours of recording. And, you know, obviously, the editing the combos and the pre calls, was, it's not the same to understand the customer as it is to understand the market. Right. So you can say, hey, we sell to x comm type of companies, and why vertical, right, and this is the z, horizontal or persona that we sell to, and we serve, and like we're solving this pain point, that's still not the same as having a perspective on the market. And I couldn't agree
Mark Sochan 42:19
with you more. You know, the interesting thing is, you know, when you're leaving a startup, you just want any customers, right? So you know, you land this customer, and then you land a second customer, and then land a third customer. And then I'm looking and going, Oh, my gosh, I got three customers. But they're three different value propositions or three different use cases. And I can only build one, the product team can only build one product, I don't have enough resource to be building three different things. So I think that's where kind of this combination if I understand your your comment correctly, is it Yeah, your your you got to focus on a customer and satisfying those customers. But it's only when you step back a little bit and you look at the broader market, customer segmentation, then you can understand, okay, what are we going after here? And I think you have to get pretty, you have to have a pretty good thesis of what that customer segmentation is, go test and validate that. And then iterate that. So I think that's kind of that combination of I don't know, bottoms up and top down approach, yeah,
Michele Albanese 43:17
be able to take the customer's needs and what they're asking for now, but also show them the way and show them what the future looks like, based on the market. But right. So being able to kind of leave in new water, if you will. Absolutely.
Jared Fuller 43:31
Mark, you kind of in the book with talking about like, this is this is a game to win. And I love it. I'm slightly competitive, don't win many medals,
Michele Albanese 43:44
and much very competitive, very competitive,
Jared Fuller 43:47
very competitive in that. The way that you end. The book is like, look, this is a game you can win. And I think of a lot of people think about partnering is like, hey, I want to build this partner program, or that's been my task. But when it comes to strategic partnering, I really feel like if you're not first, you're last, you know, kind of Talladega Nights style, like, you really have to be in that position where you're there to win. And if you're not, if you're not going to win, they just don't you don't have the bandwidth to be like, Oh, I have to strategic partners in this space. No, you have to win. And the two major alliances that I've quote unquote, one where it's got us like the next phase, I've actually come into that partnership negotiation and saying, You don't know me, you don't know us. But in one year, I will be your most strategic partner. And we're different than everybody else. Now, I did this before reading your book, I just like thought, this has to be true. And that set us apart immediately from every conversation. Like not everyone was approaching the Chief Strategy Officer or CEO or CMO saying, no, no. And one year I will be number one. And I have a path to show you how. How important do you think that mindset is because like I don't, I hadn't heard that or seen that but like you have to be Number one, but I've always felt that way. I love how you end the book that way, maybe some closing comments on, like, you know what it's like to win there and why you need to have that competitive edge? Or, you know, if you can't go in it to be number one, then don't do it.
Mark Sochan 45:15
Yeah, absolutely. I couldn't agree with you more. I mean, it's that audacity in the boldness, to be swinging for the fences and shooting for number one that gets you to the table in the first place. And, you know, the other thing I've learned through being part of numerous exit m&a events, is the unfair spoils go to the first and second player, no one can even barely remember the third or fourth or fifth player. So yeah, I think it's that audacity and the boldness, that, you know, is important. I mean, you put yourself in the shoes of the chief product officer, or the VP of Product Management, the big elephant company, what what's gonna capture their interest, you know, someone is saying kind of a boring story of I can do this me to thing or somebody goes in there and says, look, I've got a really big idea here that can really transform things, is that big idea that's going to generate the excitement and enthusiasm that's going to carry you through people want to deal and associate with winners. So absolutely, I think swinging for the fences is really important. That's what energizes the conversation. It's what differentiates you from from your competition? That's me
Jared Fuller 46:25
that it's in our title partner up, right. So you know, partnering up, it doesn't mean that we're partner up partner bit, right, exactly. partner to win. That's, that that'll be the methodology that we develop that I'm always talking about in terms of maturity models. But I'm Mark, people can find you at SEO quests on LinkedIn, Twitter, tell us tell that folks where they can find you because you're continually putting out more good content and thoughts on this space. Love the experience that you've had and kind of sharing with us today? Where can the folks find you?
Mark Sochan 46:54
Yeah, they can find me at the CEO quest.com. They can find me on LinkedIn, and the LinkedIn group partner strategy network, and they can check out the podcast. And welcome welcome people. Take a look at the book, The Art of strategic partnering, dancing with elephants, how to partner with industry titans without getting crushed.
Jared Fuller 47:15
And that's available on Amazon. So like, for those of you on Amazon, here's my shameless plug for all of you that are listening on Spotify, Apple podcasts, etc. You can also check us out on YouTube Partner A podcast.com, you'll see the videos, you can go subscribe there and get to see that we were actually holding the book, I actually ordered this from Amazon, you can do so don't forget, if you love the stuff that we're bringing to you because Michelle and I are doing this to learn and be curious learning machines ourselves. Leave us a review on Apple podcasts. Like Subscribe on YouTube, the shell it's five stars only right?
Michele Albanese 47:47
Except anything less so do it. Absolutely.
Jared Fuller 47:49
Absolutely. Mark. It's been a pleasure. I can't wait to continue the conversation with you. I feel like I'm going to come geek out with you on your podcast, too. And we'll be tuning in and we'll definitely have you back on the pot.
Mark Sochan 48:03
That'd be great. Thank you, Jared. Thank you, Michelle. All right. All right, partner
Jared Fuller 48:07
up. See y'all next time.
