A great partnership is like finding a unicorn in the wild because – let’s face it – most partnerships aren’t worth the paper their NDAs are written on. The amount of time that can be spent on evaluating partnerships and managing partners is an abysmal ratio. But we keep doing it, because we want to believe in the system. We want to believe that everyone has the same direction and drive that we do, but the truth is that believing in unicorns is dangerous, and worse, sometimes downright unproductive. To help you avoid some of the pitfalls, I started thinking about what I’ve learned after all these years as a unicorn hunter. Because for every mythical creature I’ve bagged, I’ve been taken down by twice as many donkeys in party hats.
Every year following Marketo’s Summit and Salesforce.com’s Dreamforce we go through a partner evaluation cycle at LeadMD. We do this not necessarily because I want to, but frankly because we have a big booth and big booths mean big customer bases (as rules of thumb go). Normally I return to our offices with a stack of cards and LinkedIn requests to parse through and try to find the Easter egg of value in a yard filled with land mines.
When I was younger, I felt flattered by the proverbial partnership request. Ultimately it led to a lot of paper pushing and not a lot of revenue exchange. I couldn’t see why more of my time wasn’t paying off – after all, the companies I was speaking to seemed to be successful, had solid client lists and were engaged in the same space as we were. In other words, all of the important bullet points were there. Through a lot of wasted hours I came to realize that there are a few items that truly define a good partnership – and none of them were items I was taught growing up or in school or in past practice, and for a simple reason. Most people simply don’t know how to define a good relationship.
Like any relationship, one person shouldn’t be more “in love” with the other. That type of one-sided arrangement leads to one of us getting hurt every time. Want to spot the half with more to gain? Ask yourself how that partner came to know about you and your organization. Did they see you have a big booth at a tradeshow? To me that’s the equivalent of a big shiny object. I don’t want partners that wait to base their growth strategies on walking into an exhibit hall and looking for the biggest billboard.
I want partners that meet a strict set of criteria, and not the eager new app company that runs up between sessions at a tradeshow and begins gushing about how they love what you are doing in the industry or that they have been following you for some time. The latter simply sends up a lot of my red flags. Partnerships that are based on the school nerd running up to the prom queen in the hallway simply don’t interest me. Sometimes this isn’t as obvious as the scenario described above so I’ll start my mental checklist of successful business development, which looks something like this:
- Do we like them? This one sounds as subjective as it is – I really hate working with people I dislike. For most people, this evaluation criterion is also superficial. What I can tell you is I’ve found myself in bed with enough jerks over the years to know that any partnership worth starting is one worth assuming it will eventually succeed. When things fail, they actually tend to get simpler. It’s much easier to kill a partnership when there is no revenue flowing back and forth, no IP exchange, and no joint customer list. When things succeed, they tend to get very intertwined and you should think long and hard about whether this partner is one you want to succeed with. Also, a lot of people you like will become people you dislike over time –so why not give yourself a leg up and make things like culture, communication style and overall alignment of personalities some of your criteria? Trust me; it’s advice worth following.
- Find partners that complement your offering. Another no brainer right? Hold on, not in many cases. A lot of partnerships are formed simply as “referral” partnerships – which might as well be a four-letter word for me. I don’t want my company’s revenue goals dependent on the ability to sell someone else’s solution. I actually tell partners we can scratch the revenue share component to the agreement. Yes, it makes sense to make money for your efforts and partner referral fees can be a nice revenue bump – but it shouldn’t be the reason for the partnership.
- Most importantly, I find partners that have the ability to take care of our customers. To do this I look at how well they take care of their clients. This is normally an easy one since I likely already know one of your clients. It’s easy to reach out and get some feedback on how the company takes care of what should be its most valued asset. I want to know that I’m not going to get a bunch of angry calls after I introduce you. Those calls are the worst and normally start with “Your friends over at _______…” Know that when you make an introduction, that client now views your recommendation not only as a partner, but as your friend. I really don’t like being seen in bad company.
Really want to get to the heart of how well your potential partner performs? Become a client first. At LeadMD we use every vendor we recommend. Nothing drives me up a wall faster than hearing, “we recommend _________ – we actually don’t use them because we are too small.” Eff that. If you will put your name behind something, you better be using it. You better think that solution is so valuable you couldn’t afford NOT to use it. I received an email from a “Marketo Consultant” last week. I put that designation is quotes because in the email (who he is also sending to his competitor) he states that, although he consults on Marketo, he doesn’t use it because his business isn’t ready yet – he actually uses an ESP. I literally chuckled at this morbid irony. If you are going to stake your business on something, there is no halfway. Put your money where your mouth is.
All of the above said, avoid partnerships where you stand nothing to gain. How will you know? Ask yourself if you could live without it. Can your clients live without it? Should they live without it? When we use a partner’s solution, we naturally begin to form a methodology to offer it to our client base. As a professional services organization, we get opportunities created for ourselves when we offer complimentary solutions to our customer base. We want to build that solution into their process and make sure they are seeing great results with it. When we struggle to form a clear value message, we kill the deal, and quickly. If you can’t see the gains, don’t push yourself into it – no matter how big the logo. Partnerships should immediately make sense, for both parties, and if it doesn’t walk away immediately – it will cost you more than you know.
Some of the above items may seem obvious (after all, they sure seem obvious to me). However, on a daily basis I find that I must focus on reminding myself of at least one of them. The most successful partnerships I’ve ever formed were completely organic – meaning that we found them on behalf of a client, used them ourselves or were referred in by someone we trusted. None of them came from a card exchange at a show.
Meet Justin Gray
Justin is a serial entrepreneur and the CEO and founder of LeadMD, the world’s largest revenue operations agency having implemented over half of the Marketo user base. Justin has made a career of launching successful companies and scaling them, with successful exits of over 200MM+ in the last decade. Justin’s latest endeavor launched in 2016 when he co-founded Six Bricks an online learning startup designed to combat employee and customer churn through experience-based education. Over the past 10 years, Justin has emerged as a strong voice for entrepreneurship, marketing and culture. As a recognized speaker, Justin has been published over 350 times in industry publications and holds his own column, Tribal Knowledge in Inc., while writing for Entrepreneur, Tech Crunch and others. Justin and his wife Jennifer met over marketing and three years later welcomed their son, Grayson, into the world in April of 2017.