(607) How Matt Braley Built a Multi-Million Dollar Alliance Ecosystem at InvoiceCloud - YouTube https://www.youtube.com/watch?v=aBTVUvriwz4

Transcript: (00:00) and today's guest is Matt Brily and Matt started at Invoice Cloud uh as AE number three when they were half a millionaire R um eventually became their first CRO at the $28 million mark and then scaled the business to $170 million a $4 billion acquisition by uh Vista Partners and just an awesome outcome all the way around um and we're going to talk about alliances today and go super deep on it and Matt grew their alliance ecosystem from 15 to 50 partners and it accounted for over half of their bookings uh by (00:39) the end of Matt's tenure so it was just an incredible part of their go to market and uh today Matt is advising consulting and investing in growth stage companies um so I'm pumped for this topic and Matt really appreciate you joining me thanks for having me Kyle pumped to be here [Music] hello and welcome to the Revenue Leadership Podcast by Topline i'm your host Kyle Norton CRO at owner. (01:09) com and every Wednesday we dive deep into the strategies and tactics being used to drive success by the best revenue leaders in the world so join me as I sit down with revenue operators to discuss actionable frameworks that you can implement in your business today with no fluff no sales pitches and no [Music] platitudes this episode is brought to you by Salesape. (01:40) ai sales Ape is the AI powered sales assistant that engages your inbound leads instantly answers questions and books sales meetings without you needing to hire extra staff built for any company with more than 100 leads a month Sales Ape ensures no leads slip through the cracks more sales meetings more deals less hassle grow without the overhead try Sales Ape for free at salesape. (02:03) ai/kyle [Music] yeah so as I mentioned we are going to talk uh exclusively about alliances uh not something that I have spent a ton of time on the podcast uh discussing so we're going to get really deep and talk about who should think about doing alliances how they should think about who the right partners are execution building funnel and and really share uh some great frameworks with folks so uh what did I miss in the intro anything else that you want to add to your background before we jump in i think that's pretty much it you covered it all (02:40) right good so um as an entryway into this topic so just talk about what Alliances meant to Invoice Cloud during your tenure I gave like a a quick snippet but um talk about a little bit of the history and what it ended up delivering for the company so we started doing them uh when we were sub 1 million in revenue and they came in many different forms but we were looking to find companies that we could partner with create a technical integration and then our joint offering would uh deliver a 1 + 1 equals 3 outcome for the market (03:19) there's other types of partnerships that can be successful but these were the ones that we found created the the most velocity so they were a large source of pipe gen for us source of bookings and we oriented a good amount of our go to market motion around alliances because it was such a material uh amount of bookings and pipe for us and I would imagine that must have been a pretty significant competitive mo as well it was particularly when we could create competitive advantages either through go to market messaging or through the way (03:57) that we did the technical integration and mutual delivery uh the the competition caught on and became less of a moat over time but yes it was it was a material mode particularly particularly on the uh the the NR side is when If um we had a client maybe that wasn't quite as happy with us the partner would usually give us advanced warning that might have been hard to detect ourselves and we could go in and do something about it that's interesting yeah I had Stevie Casease who's the CRO of Vanta on a couple months ago and one of the things (04:40) we talked about is uh execution is the only mode so you know that alliance ecosystem would have been remote originally and then people catch on same thing's happening in my business but uh execution is the only thing that you can really sustainably rely on in the long term which I thought was great great framework by her absolutely agree so uh let's get into just like the failure modes because I know a lot of startups that have tried uh partnerships of all sorts of different uh variants and and we're going to talk alliances (05:16) specifically like where do things typically go wrong for people in your opinions i think anyone who's worked in partnerships has most likely ended up with uh a paper partnership or two along the way meaning you put a year of work in there's excitement on both sides maybe a press release and then nothing materializes and the the overwhelming majority of the time that's because of a lack of upfront alignment and qualification it really requires the same level of rigor and inspection and evaluation as an enterprise sale but the (05:58) majority of companies that I've observed don't treat it that way h And so how do you see them treating it as opposed to like an enterprise sale they're not doing enough to define what they're trying to achieve with the partnership and then the things that will need to be true for that those outcomes to actually materialize um and so we'll get we'll unpack some of how to actually run a great um alliance process i'm curious um maybe just zooming out so alliances are part of the partnership motion um maybe just frame out okay what are the different (06:43) partner uh motions that you've seen be successful how what what really what's the definition of an alliance and in which cases is the is an alliance the right approach sure yeah so we're not talking about in this conversation at least resellers like CW or marketplaces or affiliate referral programs brand collaborations or you know having an app in Salesforce's marketplace or store uh those are all different forms of alliances that that can be successful in different contexts but the for those who are not familiar (07:22) with invoice cloud these are enterprise sales that require a technical integration for the delivery to be really good they're long sales cycles um ACV over 100K and for uh there to be a lot of velocity in the deal there needs to be buyin from the core system provider that you're able to deliver in conjunction with them or the system of record depending on the vertical market so InvoiceCloud's product was a horizontal platform that would had vertically oriented go to market teams selling to uh to different groups (08:06) so do you use the word alliance and partnership interchangeably and we're talking about a technical alliance or what's the taxonomy that people should think through this i use them interchangeably okay all right cool and so so then under the banner of partnerships and alliances really what we're talking about is a is a product partnership like a technical uh partnership a product partnership where there's some embedded components of your of the two systems or a integration where there's an there's a data exchange (08:40) the former creates more stickiness and can provide more value to the market but it could be either in this context okay and then some sort of joint go to market on top of that yeah that's right okay cool and so then what what were for invoice cloud so you had these technical alliances technical partnerships were there other types of partnerships that you guys had as well we had some referral partnerships we tried to do reseller partnerships uh and most they ever they ever created was a trickle m and and so what makes this what makes (09:22) this partnership or what made this uh version of things so successful sure what we were trying to accomplish is building crossf functional relationships so that the AES or CSMS of our partners who have the relationship and have the trust of the client already would make introductions to our team so that if you're have a sevenstep sales cycle instead of starting at step one of the sales process where you're cold calling in you're starting at step three and they're also helping validate that the in this an environment where there's (09:59) a technical delivery that that's going to work and go smoothly as well as supporting while we're doing it okay um and then let's just talk about like so why do this like what like why pursue a technical partnership in contrast to a reseller relationship or a referral relationship like what's what's the what's the objective in the end I think in different contexts the others could work as well in an enterprise context it's very difficult to teach a third party how to effectively sell a complex product with a long sales cycle Right so (10:44) the that's why I think that in in this context a reseller alliance would be tough to pull off uh we tried it didn't didn't work so well um because all we're trying to do with the partnership from a go co-ell go to market motion is have them open the door for us so doing things like educating their sales reps in armed with a couple slides in a deck so when they go and talk to their customers they can ask intelligent questions just enough to get the prospect interested and then turn over to our sales rep to actually run (11:20) the full motion okay and and so then uh you're going to have a rep from each company in the same meeting in different meetings is like what does that actually look like to the customer when when they're buying like a two products that are they're in a technical alliance like this so what we were trying to do is have the CSM or the AE that we were on our partner side be in the first meeting with us so that we're jointly presenting the same message and then these are long sales cycles so we're not asking them to (12:01) go and join us for every interaction with the prospect from there on out but if you're partnering with a core system provider or an ERP company in a vertical SAS context they usually understand all of the players within the account so we would leverage them for account mapping and understanding the power base and figuring out what to do if we got stuck because they've already sold to these same people but yes they're usually in the original the first meeting at the beginning of the deal and helping us get in the door and then we're just calling (12:36) on them if things slow down okay so so these are customers in your partners' install base they're saying we've got this uh we've got a partner invoice cloud who has uh a deeply tech a deeply integrated or or a part of the product that is intertwined you should talk to them here's why and then they're introducing you guys and you're now starting at um you're starting farther into that cycle than you otherwise would have does that drive that right exactly so back to your question before like why would you do it (13:12) it's the it's the long game to get set up but if you set up and execute it well then it'll shorten those longer sales cycles materially in the future okay do you want to give an example of of one of those alliances that worked really well just to to make it concrete for people sure so we were selling into insurance utilities local government and then consumer finance consumer lending companies all of those vertical markets have core systems systems of record or ERPs that are that are serving those that are specific to those (13:53) markets we partnered with an ERP company that might have 200 customers we're then at the beginning up front in the alliance getting agreement of what we're going to do to build pipe together what KPIs and metrics that we're going to mutually line on that we want to that we want to achieve and then we're figuring out tactically like on the front lines how are we going to execute those things they're making introductions they're our sales represents selling the deal and then we're sharing revenue with them so that (14:26) they're getting a a boost on new or a new revenue stream depending um over time that said and and what was the driving reason for the partner to want to work with you guys is it the revenue share was it uh retention and product stickiness on their side like what what was the what was the drivers yeah it could be either that's where understanding the partners' motivation is is critical on the in each market there's the leaders in the space and the lagards in the space the leaders are more after new logos there might be higher growth (15:09) so they're wanting to if if you're creating a technical integration and a joint product that's giving you a 1 plus 1 equals 3 outcome they're going to be more focused on how you could help them win new logos a lagard in the space maybe that second third fourth player in the space who might be losing a little bit of market share or might their growth might be slowed down by the the leaders there they might be more focused on uh retention of their existing clients getting a new revenue stream up and going create trying to create some (15:43) competitive moing so at before you go into any of these partnerships it's critical to understand like what the motivations are of the other side because that informs the that informs the tactics and how you'll go to market together okay cool and and so I want to go back to what you said around this notion of like an enterprise sales motion and so you know great enterprise reps run a run a sales cycle with extreme uh precision and that doesn't seem to be how you see it in partnerships so maybe just like say say (16:21) more about what you were nudging at there sure yeah i think that the way that I think of what you have to do to create a successful partnership is upfront you have to run a full enterprise sales cycle right so you're multi-threading mutual action plans champion building getting commitments of what you're going to do after the fact to actually make the partnership successful but then once you signed it unlike an enterprise deal you have no money at that point it's just a piece of paper after you sign the partnership you have (16:53) to go do a product launch you have to align go to market teams you have to um figure out how you're going to execute crossf functionally you have to have a feedback loop to track what's working and not working and iterate on it quickly but instead of just doing that internally at your own company which is hard enough you have to do that between two companies successfully because you're launching a joint product or an integrated product together so there's an enormous amount of complexity required in order to execute (17:26) this well and I I just have seen over and over again that the uh the expectation setting and the identifying the blocking and tackling and how things are going to work after the fact once the partnership is signed tend to be tend to be too loose and um that ultimately is what how you wind up with paper partnerships right you're talking about something this complex like why do medic and other frameworks exist particularly something like medic it was built for enterprise sales at a fundamental level the purpose of of medic is to tell you (18:08) that if you can't get these certain things done in a deal stop spending time and resources on it if you can't build a champion early find another champion or get out if you're not aligned on the they don't see the value in what you're doing then there may be a better fit for a competitor and get out of the deal right so on each deal it forces you to keep asking should we keep trying to climb this mountain or abandon the mission and that's how that's the rigor which partnerships need to be thought of as well as you're pursuing them and I see a (18:42) lot just have seen a lot of times that that uh uh that approach isn't taken yeah and and I want to go back to they tend to be too loose what tends to be too loose about some of these partnerships the KPIs what each side is expecting to get out of it the alignment at every level of the organization so maybe the that's it's executives on both sides think it's a great idea to do this thing but then the AES and the VPs of sales aren't aligned and they can't tell you why it would help them pick quota if the AES can't tell you why they should care (19:23) about it and why it helped them hit quota or the CSMs depending on the the context like the thing's going to die in in the field because they're going to spend time selling their own product that makes a ton of sense and and so that is you end up with that because you haven't been as diligent and and uh there's not enough attention to the details all the way down to how this hits the front lines yeah it's exactly right okay cool um so I want to get well before we get into the exact framework because you have a a a framework to share around how (20:04) people should think about this um I want to just ask about like who should be doing this cuz you guys were like a very particular business i I I think everybody gets what so many companies get wrong is they hear a cool best practice on a podcast like this so like well Matt crushed it and you guys like sold for $4 billion so like I should go form a bunch of technical alliances but uh people don't think enough about um well is that right for my business is that a best practice for companies selling into government and utilities (20:36) but not restaurants for for example so h how do you explain to people who technical alliances are great for who is it not for and how should we how should we think through that yeah it's I think it's there's a number of factors to consider you and I were chatting about this the other day it doesn't work as well in the SMB vertical SAS space because there's less product complexity so there there's more of a tendency and an ability to create a product product or platform that can serve all the needs of that end of the (21:14) market i seem to work best in larger ACV companies it's call like 40 50k and above um I'm sure there's many successful partnerships that that go lower than that that's where I've seen it personally seen it work the best and then the the reason that it works a little bit better in vertical SAS or in horizontal SAS with a vertically oriented go to market is because it's easier to find companies with an overlapping ICP so when you're building your IP your ideal partner profile if you're selling into a vertical there's going to be a bunch of (22:01) vertical SAS companies that are potential partners that have a very natural c overlap of customer bases when you're going with your horizontal platform and you're going after partnering other horizontal platforms there's going to be some overlap but it's not as it's not as obvious is to when you're building your IP you need to understand uh if you're selling to the same buyer what they care about and what you're going to mutually get out of a of a partnership makes a lot of sense so overlapping ICP so so vertical makes (22:35) sense enterpriseoriented and is there anything is is is product complexity important like it's very technical products or could it be simpler products but just like big ACBs are you talking about your product or who you're choosing as an alliance uh your product like should I be thinking about building an alliance program there's got to be enough differentiation in moing in your own product that it's not easily replicable by the companies you're trying to partner with so if you're selling if you're selling a widget it might not (23:19) be a great fit but if you're doing something unique and differentiated that's around the edges of what uh you know companies are doing that you're trying to partner with or you're doing it much better you have a potential for a partnership our to give you the invoice cloud context most of our partners had a very light version of what we were doing so there was 10 to 25% product overlap but we were able to prove to them that the results we would get with our version of that platform would be so incremental and valuable to them (24:05) to have us doing it instead of them spending their resources doing it instead they can resort to spending their resources on what makes their beer taste better and the Jeff Bezos framework instead of something that's off uh off to the side that they would oftentimes like stop selling their own version of our product and just move to partnering with us instead of course the economics have to work there and that's a longer conversation okay makes sense and and you you've said IP a couple times so your your ideal (24:42) partner profile uh how do you think about who's the right who is the right type of company to partner with so like again it's depends on what you're trying to accomplish i've seen the most successful partnerships with uh core systems and ERPs and systems of record right because it comes the the lens is who's going to have the leverage to introduce you into their campus and actually create more funnel velocity for you again assuming that that's what you're trying to accomplish there's other ways to have successful (25:20) partnerships but in the in this ideal partner that that we're trying to create that's creating a 1 plus 1 equals three and our joint product that's helping us accelerate deal cycles it's helping us increase margins the companies that have the most pull with their customers are the ones that have a lot of their customers have a lot of spend with them they have long-term relationships and they're the system of record m makes sense right there's other partnerships that can be successful and other integrated like we we had success (25:56) partnering with some p printto and mail companies that were trying to do uh digital e billills and text messages and that was just a piece of our product and we could make it better for them uh but those are again they don't as much pull and sway with their customers you're really looking what's it level of influence the partner has with their customer base and and who decides you know like um you're obviously going to have a bunch of product people because you're talking about a product partnership but does this originate in go to market and (26:31) uh you're pulling in product resources or is it at an exact level or from product like on your side if you're starting to if the if the GTM leaders are listening to this yeah how should they think about um developing that that list of uh ideal partners and who needs to be involved in that in that group yeah they're a large investment across the whole org they can't be a side project or it doesn't work so you're integrating them into your go to market motion marketing is involved product and delivery is involved so it's this has to be done at (27:13) an executive level it's another pitfall I think a lot of companies fall into is is thinking that oh we could just build a partnership program off to the side that's going to get us some leads you can in maybe certain types of partnerships but not with uh the type of partnerships we're talking about here okay and and so most people don't have an alliances person uh to go do this work it it would originate with the CRO probably is is that the is that usually it or yes or head of sales or the CEO okay okay makes sense um all right i (27:54) think this is like a really good framework for to think about okay I'm the right person i I'm the right type of company to uh go hunt technical alliances i have an idea of where to go maybe now and so let's talk about your framework now the the medic for alliances and maybe just like lay it out and then we'll pull it apart piece by piece sure so yeah this is um this is hot off the press Kyle okay i I came up with this while I was just putting together some thoughts for your pod logic exists because smart people came up with a way to measure (28:37) progress and feasibility of something long and complicated right anything that's complex takes a a long time and has potential to be resource and cost intensive so it needs needs continual qualification so that's the idea of vector but it's a little bit different because you when you're applying it to an alliance um how rigorously you score each pillar depends on the situation what you're trying to achieve you might have one alliance where all you're trying to do is get an integration so that you can deliver within that customer base or (29:12) within that market segment others you might be trying to do what we're talking about which is get a a joint go to market motion that's going to accelerate funnel so every partnership that your alliance that you're considering needs to be run through this framework but the actual way that you evaluate them and how you score them in each piece of the framework is going to be different based on what you're trying to accomplish so that's what it all comes back to is getting really clear on that are you trying to are you trying to get (29:42) faster time to market are you trying to en get enhanced differentiation with your products is it NRR is it access to a market that you couldn't get otherwise so upfront when you're thinking about each alliance you want to be continually asking yourself what would be the cost of getting this by myself right so I think that we need to circle back to one of your questions earlier like what what do people what do people get wrong i think it's not doing that comparison thoroughly enough as well like should be saying "All (30:19) right if there's these 500 customers we want to go get what would it cost what would be the resource investment for us to just go it alone?" And then what would be the cost and resource investment to do it with the partnership and what do we expect the partnership to deliver in that equation and then throughout the entire process of evaluating it just as you're doing with a with a deal figuring out what would be what's going to be true about that partnership and what needs to be true in order for the outcomes that you're (30:52) trying to get to come to fruition h I really like that as a framework co the cost and I guess risk too is there a lot of risk with with partnerships we'll talk about de-risking so I'm sure everybody is uh is under a lot of suspense right now so let's hear let's hear the framework sure so it's it's uh it's actually a a backronym called vector acronym means you made up the acronym first and then fit letters into it which I suspect lots of people do with acronyms all the time for sure so and give me the the acronym (31:34) then sort of and then we'll pick into each part yeah so the V is value the E is economics and incentives the C is co-selling motion the T is technical integration and joint product the O is organizational commitment and R is results and metrics okay nice so value economics co-selling technical integration organizational commitment we'll spend a bunch of time there results all right vector you've heard it here first trademark Matt Brayley if I see it on link if I see this on LinkedIn with no uh attribution I'm going to be really mad about it um (32:15) okay so let's let's get into value so what does value mean in this framework sure so the three questions are um what needs to be true to unlock the value for you right does it need to be do you need to get warm introductions to 25% of their base in the first year does it need to be 50% of their base do greater than 50% of their customers have to be over $10 million in revenue so that would be what their customer base composition is from the outside part a company might look like a great potential partner but then when you get (32:53) to the data with them and what their customer base looks like maybe it's not a fit based on who you're trying to sell to right um do you have to be able to generate a certain amount of pipeline the first 12 months so figuring out what the floor is for you to be worth it and then what things have to be true in order for you to want to move forward with the partnership right and then Okay yeah keep going um again this is coming back to like what is it going to unlock for you and getting really clear on like why you're (33:32) going to do that particular partnership right and then and then so you said there's three questions question one is value what's the value for me yep what has to be true what has to be true to unlock the value for you uh what has to be true and then what's the floor is the third one uh that was part of the first one the se the second one is what's the value for them and then the third is why does the market care okay what's in it for me what's in it for you what's in it for the customer that okay that's that's good and so how (34:14) do you think I think this is maybe the most difficult part of the entire thing the what's in it for them i think this is where things often go apart in in my uh experience and so how do you think about figuring out what they want maybe bringing them ideas they didn't know they had like what's the approach there it comes back to aligning on what their with what their business objectives are and this this is a little bit about the lagards and leaders conversation that we had earlier but can also be based on what (34:50) size and profile of company that you're trying to partner with if you're a $10 million AR business you might have some an interesting product for uh Oracle to want to partner with you but they certainly don't care about the revenue that you can generate for them then you have to have a great product and they have to see it as strategic but then there could be uh a handful of 20 million to hundred million dollar ARR vertical SAS companies in the space you're going after that do care about the revenue in addition to the strategic (35:22) positioning or they care about the ability to be able to cross-ell into your base okay and and I sometimes it can be tough to figure this stuff out or it can be tough cuz you know it might be a competitive market there might be potential overlap you might be thinking about if it's not them it's somebody else do you have any ways to think about extracting from that potential partner like what the business are business objectives are that they actually care about i feel like sometimes that can be a bit of a tricky (35:58) dance i think it just it's come back to discovery just like you would do in a in an enterprise opportunity figure out who at the at their organization ultimately is responsible for driving alliances assuming they do alliances if they don't do alliances today then you're kind of taking a different path because you're asking them to build something that they don't have a motion for right but assuming they do alliances it's getting to the decision makers and the champions that are going to influence the decision and what they're (36:33) trying to achieve with with Alliance like why they partnered with other companies what they were expecting what worked what didn't work i have a feeling a lot of people listening will want to partner with people that don't have like really wellestablished alliance programs is that a very different playbook it's relatively the same playbook but it's uh it's it's what's makes it more involved is you essentially have to teach them how to do it and you have to have get them to allocate resources that they may not (37:11) currently have allocated for those things right so we have to you have to get them to carve out a piece of their road map if you're talking about a creating a joint product you have to uh have AES or SDRs spend time on helping you generate pipeline you might have to carve out part of a marketing um a marketing head in order for uh to run joint webinars so there's just more friction there but it's very doable and a lot of the companies that we partnered with uh hadn't done partnerships before and and would you recommend would you recommend people do (38:02) a technical alliance if I haven't done a lot of it and the partner hasn't done a lot of it is that uh sort of a path to nowhere or is that where there's a bunch of opportunities i think it's going to depend on your It's probably unsatisfying answer but I think it's going to depend on your your your product and your market positioning and like what you're trying to get out of the alliance i think it's it's it's going to be if you have no one on your team who's done alliances before I'd suggest that uh you hire someone full-time with experience (38:39) to do it make a full organizational commitment to it you doing it as a side project when you've never done it before like that's going to be pretty tough okay so it's a pretty bold bet like you have to really go full send at this and be confident that it's going to pay off because you're probably hiring somebody pretty senior pretty expensive and then putting a bunch of other resources behind it so the the like is this right for me question is a pretty important one I think that's right okay it comes it comes back to it comes (39:22) back to the original qualification of what would you be able to achieve without the partner going direct and like what is the partnership going to enable you to achieve in terms of faster deal cycles margin moing NRR quicker delivery whatever you're after you like go if there's not a material difference of what you think you can do with through an alliance channel and you're probably going to want to seriously consider just going direct [Music] the official marketing playbook for 2025 starts at CMO Summit on April 17th join (40:05) 150 of the world's top marketing executives in Atlanta for a 1-day event designed to redefine marketing's role in business growth in a world of shrinking budgets the CMOs who lead with strategy and innovation are the ones driving real results this summit is where you'll gain the tools insights and connections to do just that hear from industry pioneers engage in hands-on workshops and surround yourself with marketing trailblazers who aren't just your peers they're the minds who will inspire your next breakthrough visit (40:37) jointpavilion.com/cmosummit to secure your spot today makes a lot of sense so vectors value economics how how do how should somebody think about economics yeah why does Yeah why does each side care at every level of the organization like a lot of partnerships get stuck at the executive level but then die in the field you're asking uh AEES or CSM to do something that is outside of their normal daily motion which is focus on a product that's not theirs or making introductions for products that's not theirs so they have (41:19) to be incentivized to do it and they the question to ask them is ex why is this going to help you hit quota and if you can't get a good answer from the CSMs and on the other side they're not going to spend time on it mhm same thing with the with the VPs and the director level went all the way up and and is that because is them hitting quota because their their product becomes more competitive and they win more deals or is it like do you really need your partner to retire quota for like retire their quota for selling your (42:01) product or how do you think about that uh it's a great question the the panacea is to have the partner retired quota on your product we were only able to get that in place like 10% of the time so the rest of the time it was that it would either make their product stickier or they were selling more back to the base or because they were generating pipeline with us had then generated revenue for them like we were able to spiff them on it or their company spiff them on it and those spiffs were material enough to get focus (42:39) okay so what's the what are the best ways then to really like motivate the partner sales reps is it is it spiffs is it the like product competitiveness like what what are the most common things there dep are you talking about AES or CSMs uh I mean both really if you're talk if you're talking about AES that they have to believe that bringing you into one of their deals is going to help increase their chances of winning versus not having you in the deal if they don't if if they don't believe that then or they're not going (43:26) to make more money on it whatever it is there's got to be some alignment of incentives there or else they're not going to want to do it because it's adding another layer of complexity into their opportunity for a new for a new logo and how do you vet that do you have to go talk to AEES as you're like building the and framing out the alliance or because I would imagine a lot of CEOs like yeah the AE should want to sell it every time but how do you how do you get the reality check it's vetting during the selling process of the alliance or (44:00) the formation process of the alliance yeah it's it's talking to the front lines what usually the natural cadence is if you even if you started with the CEO at a potential partner company they're going to go ask the directors and the VPs and the sales reps are you seeing this other company in the market do you see their product as a value ad to what we're doing already so there there's usually going to be some momentum or positive response from the front line that the executives have got but then it's just figuring out what (44:33) that really is and how material it is mhm what one of the meta points that I'm hearing from you is like brutal honesty with yourself seems to be super important because I think everybody gets excited about the possibility of a partnership but then you know you're really talking about like stress testing it at every single level like making sure that you have a path to make it you know uniquely valuable all the way through and it's hard like you know you could be four six months into a partnership and a bunch of work and then start to (45:10) find out that the reps aren't going to care and I think most people like close their eyes and just say just like do it anyways it's why it's why I keep bringing it back to enterprise selling it's the same thing you've sunk cost fallacy is strong you spent four to six months on the deal you wanna you want to convince yourself that it's got a chance to close still you've got to be brutally But the best reps are brutally honest with themselves and and qualify and inspecting their own pipeline constantly and then only (45:44) spending the time on the deals that have a high chance of closing and so what about on the CSM side how do you think about incentives there it's a little bit different it's it's a little easier is comes back to our lagards versus leaders uh bag lagard versus leader partner conversation before the lagards are going to want are usually going to have a larger customer base and want to help you sell more back into their existing base uh you could do a diff similarly the way that you do with a you're trying to get (46:21) them to retire quota but you could spiff them for intros you could spiff them for bookings you can do quarterly sales contests all this needs to be decided upfront with the leadership on the partner side because if you're expecting a certain amount of pipe gen the pipe gen's only going to be a trickle unless there's some incentive for the CSM to do this versus do what their normal job is so getting alignment on how you're going to actually incentivize them to drive that pipe jet and then ultimately bookings for you is (46:52) is critical okay cool um so let's move into the sea of vector yeah yeah this is the the co-selling motion so how are you actually going to get into the accounts so are they willing to commit is the partner willing to commit to doing regular account mapping and figuring out which are the best to go after together and that starts with it's usually an 8020 rule right like the majority of their revenue 80% of their revenue is their top 20% of customers that's where you're trying to start but it's figuring out who at the (47:34) organization has the best relationships with those organizations who can make an introduction to you right so we're getting a little bit in the tactical piece if we zoom back out it's what are they willing to do in terms of co-selling activities um what are they willing to do in terms of marketing activities they willing to invite you to user groups to conferences do they do those are they willing to do quarterly joint webinars what KPIs can are you going to mutually expect out of those activities and then it's getting into the the (48:15) tactics of how you'll actually do those things together like ideally you're getting the CSMS and the AEES at both companies talking to each other on a regular basis so I want my I want my AES knowing that uh where the CSMs and AES are going in the next month or who they're talking to in the next month on their side so that we can have a conversation about what the current state of that customer is and we can work together on a messaging plan or what questions we're going to ask them to try to drive a wedge to get (48:49) our to get our foot in the door to get an opportunity going and so you've got the the reveals of the world that do this like on math now or or through like a technical integration between the two CRM but I would imagine that wasn't what you guys were doing it was not so So how did you make that work a lot a lot of uh a lot of spreadsheets and a lot of channels in Microsoft Teams wow okay and so so say more there like what what did you have to do to um get these two teams together like is that a meeting every month where you've (49:33) got a whole crapload of reps in a spreadsheet like what what is what does mean the first the first step is is figuring out who has the best relationships with the customers on the partner side is that the CSMS is that a is that an executive so you go into a a a partner that has 400 C customers it doesn't take that much time to figure out of those 400 the top 20% is 80 who's got the best relationships with those 80 accounts because those are the people that are going to be most effective on the partner side opening the door for us (50:08) and then territory by territory like where is their overlap so or segment by segment so who's for my rep that's covering the Southeast for a particular you vertical or segment who covers that on their side it's obviously not going to be a perfect fit but then it's getting those two people talking and training the the reps on our side like you're having a bi-weekly meeting with the CSM or the rep on their side this is what you're trying to accomplish in those bi-weekly meetings and then of course already setting the expectation (50:40) with the partner like this is what we're going to do on a regular cadence yeah so the partner has to be ready to just like open the books completely and is that contracted are you saying like hey like as a part of this agreement you're going to like send us a spreadsheet of your biggest customers and a whole bunch of information you try to Yeah you try you try to contract it you can always Yeah you were you um these are these are all levers in part of the puzzle if they're not going to do that then it changes the calculus (51:22) for what you're going to be able to get out of the partnership so then that goes back it goes back to your evaluation process like they're not willing to give us a partner list or they're only willing to give us a partial partner list or they're not willing to make a certain amount of warm introductions so we start at step three and can accelerate these deals well that changes the business case for us doing this partnership so understanding what they're willing to do upfront is the critical component and not finding out (51:51) after the fact that they're not willing to share their customer lists um and so if you don't have a c customer list access then how do you do the mapping uh you you probably don't have the type of partnership that we're talking about you probably then have a partnership that's just a supported integration which also can be useful you might want to you you might want to be in a certain ERP's ecosystem where they've certified that you have an or that you have an integration that works and therefore you can deliver on that platform that (52:27) unlocks a market that you couldn't go after if you didn't have that integration to do the data exchange with the with the ERP right right so there could still it doesn't exclude you from doing it but you have to take that into account when you're evaluating what it's going to return for you um okay interesting go ahead yeah so one of the markets we sold into was uh was utilities and it wasn't public record and there was no real easy way to find what ERP a utility company was using and there's over 200 ERP companies serving (53:07) the 15,000 utilities in the US so we had a team of of uh there was no data source for this so we had a team of STRs for like a year and a half just cold calling every utility to figure out what ERP they were on and we got 75 to 80% of them in the US so it was doing that and that informed who that that helped informed who we wanted to go potentially partner with because we had a good good sense of what the opportunity was within those ERP's customer bases okay um and so this transitions nicely into the T for technical (53:42) integration so again the the level of commitment defines a lot it sounds like so So talk to me talk to me about um how you scope a technical integration how much is is needed to make this worthwhile like how do you think about vetting the teeth it's if you're trying to just get access to their database it can be a basic API data exchange that's going to allow you to deliver in conjunction with their platform right um if you're trying to create a joint product where you're embedding your user experience within their existing user (54:32) experience that's an entirely different ballgame because it takes product resources from both sides mhm so the ladder you're actually going to be able to create something that's more valuable for the market by embedding the two products together cuz usually those products are kind of bumping up against each other and there's some inefficiencies in workflows or customer experience that you can solve by doing that embedding process because you're keeping the best of what they're doing and the best and then you're implementing like the best (55:05) of what you're doing um yeah so that's that's how I that's how I would think about those two routes and they're they're very different okay and and how early can you find that out because like can you you might be exploring a partnership and the e ultimately the economics are going to drive how much technical work people do are those like intertwined conversations you going into an exploration with that like already with a clear idea of what you want to do with that partner how does that all come to fruition it's usually it usually those decisions (55:52) are made at the business side um let me think about that for a second kind of come together in different ways because it depends on what the current state is for the partner product that has overlap to what you're doing so some of the partnerships that we went after didn't have a competing product and so then we just prov it it was very easy for them to want to create our two products together because they wouldn't have to scrap anything that they were already doing then others already had some of the functionality that we were doing so (56:39) those conversations were were stickier because they were either having to sunset something or they were having to for some customers they would have their product that was doing a whiteweight version of what we were doing and then others we were they were turning that piece of their product off and offering our product in place of it to customers that wanted something more robust so there's some uh there's some friction to navigate and it's kind of on on an individual case by case basis okay and and the the size of the pri the size of the (57:17) prize would probably determine uh the robustness of that product work exactly okay okay cool um and this dovetales perfectly into organizational commitment so uh how should how should I how should we evaluate organizational commitment i think this is probably like one of the one of the biggest drivers right right so the questions to ask is like who just like with enterprise deal who's your champion and economic buyer who's actually going to own the outcomes and be responsible for execution on the on the partner side if they if they don't (57:57) have someone dedicated to driving it and owning it on the business side and the technical side it won't happen and and you're treating it exactly like testing champions out of the challenger playbook and looking for the hard feedback that's right trying trying to see where you're wrong exactly see if you can disqualify yourself [Music] are the executives willing to commit to doing QBRS to track results together do they align to a business outcome that the um that the executives are trying to drive are they willing (58:41) to train and certify their go-to market teams on how to effectively open doors for you these are all like witness tests on the level of organizational commitment that they have to what you're trying to do and again just to continually bring it back to the beginning what you're expecting out of the partnership determines how much organizational commitment that commitment you need you don't need this full you'll need QBRS and their AES to get certified if all you're trying to do is build a in you know data exchange (59:17) between your platforms so that it unlocks a market it isn't a you know blocker for you selling to a certain segment right right and and so let's say it's a it's a larger scale partnership that requires a bunch so obviously executive alignment we've talked about rep alignment we've talked about product is probably another one that's pretty obvious where else where else do you have to really go like test for organizational commitment uh everyone who's touching a partnership and that's going to be different um different groups depending on the (59:59) context there was a case where there we partnered with a company that didn't have CSMs they had a customer support team because it was a more lower uh lower ACD company and their customer support team was continually talking to their client base and so they were the ones that we armed with a talk track to find out if there was intro opportunities for invoice cloud so we had to get aligned with the the head of customer support which wasn't a typical role that we interfaced with in our in in our partnership motion so just (1:00:41) depends on on who's touching the the customers that you're going after together okay are there any sneaky ones that people don't think about enough but we'll get you that's a good question i I wouldn't say maybe would get you but like this takes a to build pipeline effectively with your IPs with companies that you're partnering with within your IP doing things like uh joint product marketing and joint webinars and having the getting into the customers user groups which is usually all owned by marketing is a huge (1:01:37) driver of funnel so I think there was times we underindexed on partnering with the marketing leaders early on and overindexed on executives and and sales so that's a good one to give you like to give you a an example we had a ton of success going to the user groups around the country of our uh of our partners so what it would typically look like is a partner hosts a user group in Charlotte and they have 10 or 15 local customers again these are enterprise accounts 10 to 15 local customers that come we would buy lunch for the user group we would (1:02:24) get a 30 minute speaking spot uh during lunch and then we could go and sign people up for discovery calls while we were at that meeting a lot of times we'd also if we had someone that was uh a customer that was at that user group we'd have them co-present with us that ended up being a huge driver of top of funnel and that was all the you know the user groups were usually all run by marketing on the uh on the partner side yeah that's a good play uh okay now we're into the last R of of vector results how should we people be (1:03:00) evaluating and and using this framework it's just making sure that you have a shared definition of success and they're willing to commit to they're committing to your mutually agreed upon KPIs and these are usually contractual and then having a regular uh cadence for reviewing and tracking progress and figuring out what's working and what's not working and then iterating if it's contractual and people are not meeting those commitments is there much you can do about it so the way would the way we typically structured the agreements is we would (1:03:37) pay one level of revshare for committing to certain KPI levels and then a lower level for committing to lower levels of KPIs than even a lower level if there was no commitment for KPIs so we had the op optionality to decrease the revenue share that we were paying if those KPIs weren't met so those were those were the levers and those KPIs could be from warm introductions to influence pipeline to booking to implementation speed there's a wide range of things that were valuable to us and then we would be willing to pay a material rev (1:04:19) share if they helped us deliver okay makes sense okay so vector value economics commit selling motion co-selling motion okay good technical integration organizational alignment what's the O organizational commitment commitment and then results could be alignment too yeah well we'll give you a half a point there okay Vector i I like it this is handy so um this is a great way to think through and and really like stress testing the uh your alignment pipeline how the heck do you build alignment pip alliance pipeline though (1:05:08) great question um but first you have to start by defining your IP and coming up with a list of partners tactically once you have the the list of companies that you're going to go after smart start with a small group maybe your top three to five and have a team of STRs and AES going after the end users the customers of those partners at the same time that your partner leader or your CRO whoever is in charge of partnerships is going after the executives on the partner side so you're taking a two-pronged approach we found that is most effective (1:05:52) because then they're hearing from the field that their customers are interested in the product at the same time the executives are hearing that hey there's a new company that that is interested in partnering with us now in a uh in an ideal world you have customers of that potential partner that are so excited about your product and what you can do that they're willing to help you go to the executives at the partner and say "You guys should work with this company you should create a technical alliance because we see that you guys (1:06:26) were actually had a fully integrated product they would deliver this extra value for us and and then the actual executive outreach is always from the like CRO head of alliances and he's he or she are trying to go into their alliance people primarily if it exists and if not just the CEO or who is if if they don't have a like a dedicated alliance leader partner leader where would you go depends on the size of the company typically CEO CRO VP of sales occasionally uh CPO or CTO if there was like a strong if there was a (1:07:14) strong ability to fill a gap in their product uh how hard is it to build alliance pipelines with of actual alliances yeah like how hard is it to get people to like want to have a conversation and start start that process i think it's not terribly difficult to get a conversation going i think to move it beyond that is is difficult and what would be the like number one or two things that will help you move it beyond that those initial conversations they have to see the strategic value and how it's going to create better outcomes (1:07:59) for them is it going to help them is it going to help them sell more of their own product is it going to help create a new revenue stream is it going to help mode against uh new incumbent who's taking market share from them and and I'm guessing that much like an enterprise cycle you got to go in with an opinion of that and a hypothesis and try to Exactly right and usually you build that hypothesis through talking to their end users [Music] i really like that if you I mean because they're the people that are going to (1:08:39) know if you go to a company and say "Hey I uh I think we can fill a gap in your product." That's that's not going to mean much without the the end users also saying yes this is something that would be very valuable to have in conjunction with what you guys are doing up for us already okay we're running short on time but I want to ask one more question before we get into quickfire so because this comes up a lot and I've gone through this personally so I think one of the challenges with partnerships in general (1:09:09) and and certainly these like technical partnerships is that the payoff timeline is so long like unlike enterprise like when you when you get an enterprise deal signed okay you got the revenue now you got to activate it but the the risk is sort of low if you're at a half decent company and so really like you have that end line which is that wonderful docu sign coming through through your inbox But with an alliance like this that's now only the starting point like you you sign the agreement it's great and like (1:09:43) now arguably the real work starts and so you might not know if this thing is is working for like 24 months like we have a really big partnership that we've done with a food distributor and you know we were really confident it was going to work we were we were doing something valuable for their customers but it didn't really start to chug along until 6 months in and my partner leader is a weapon and we have a very compelling product and we had like board level introductions into this company everything was stacked up in our favor (1:10:18) and it still took us 6 months of from not even just the signature 6 months then there was a lag and then there was the go live and then another 6 months to to where we like reasonably started to see a meaning like a material amount of close one deals um hitting uh so how do I know earlier in the process than us just having like blind faith we're like we're going to we're going to sink 18 months into this we're confident like if if you're if there's less certainty how should people think about is this working are these (1:10:53) conversations going to like lead somewhere if I'm if I've launched it like what what are the signals that I should look at across this entire partner journey i think you hit the nail on the head i haven't seen any partnerships take off in less time than you just described they're always the long game so having that expectation going in is is really important then it's just it's project managing it it's getting the the commitments up front that you know are the inputs that are going to get the outputs what is the timeline that (1:11:30) they're going to do the integration on you talked about doing doing a launch right they had to so they had to do some sort of integration with you guys in order for the them to start selling the product it was more about like activating their field their field reps this isn't a technical integration this is a referral relationship but with but with 3,000 sellers that are on the streets working with restaurants yeah just getting agreed upon timelines of when things are going to happen and just being able to continue pointing back to that whether (1:12:02) it's product integration or whether it's ena like you said activating the field and and enablement and having their people certified and then just being realistic on on the timeline and what you can expect in that timeline and not getting that's where it comes back to that's where it comes back to Uh if it's close between getting there on your own and getting what you think you can get doing it with a partner it's probably going to make more sense to do it on your own that's a very good piece of feedback i think that that might be the I think the (1:12:45) single most important thing that you've shared in this whole thing is is this this clear understanding of like what is the incremental value above and beyond you doing it yourself and it's got to be pretty material to take on the amount of work and the risk profile because of because of the long payoff timelines and because of how many moving parts there are because and because you can invest nine months and then get nothing out of it if you don't set it up the right way in the beginning or something else could (1:13:14) happen after the fact there's this the amount of wasted resources really can stack up yeah you really have to be willing to walk away that's one of these other macro things I'm really picking up is that like you got to use vector uh brutally evaluate you know the the reality in front of you and if it's not working actually like have the have the discipline to walk away you know if you're not getting the upfront commitments and stuff into the contract that you are confident will lead to the outputs like you were saying like do the (1:13:53) painful thing and you know uh put that seven months of effort behind you and just move on which I bet is like one of the most common things that people make mistakes on here that's right it's hard to do yeah uh because it's it's just like a the enterprise sales motion um uh analogy is just so much sense like the worst thing in enterprises is is rosecolored glasses i think that's one of the single most important things that separates like pretty good sellers with the elite ones because you can't really have more than (1:14:31) five or 10 legit ops at a given time going and if and often like if you're selling like hund multiund or multi-million dollar deals it's like five actual deals maybe three and it's all consuming and you really like have to try to look for reasons to say no uh I give that feedback to sales teams regularly that my best enterprise sellers were a little bit better at sales than the call like 50th percentile enterprise sellers but they were 200% better at disqualifying opportunities and only working on the ones that had a (1:15:11) real chance of closing yeah yeah for sure okay let's move into the quickfire um so what do you think separates a good CRO from a truly great one i think that the great CRO are effective at all altitudes meaning they can zoom in excuse me zoom out and look at the business like a CEO and then they can zoom in to break down an enterprise deal or work with the VP of sales on a framework and figure out where the enablement gaps are yeah well it's funny you say that because Alex Bard who's on our board he's a investor at Redpoint was here (1:15:57) speaking to our product team and said this exact thing about about about executives more generally and uh uh this like multiple levels of of abstraction is is super important so it's funny you say that interesting um what is the most common advice you find yourself giving to leaders and mentees so like new second line leaders or people you're mentoring into the CRO role like what what advice do you give to them most commonly great leaders make everyone about around them better up down and sideways like you're just your success (1:16:34) is defined by how well you do this yeah yeah uh and it's not just about your team um what's the hardest lesson you've had to learn you have to let people fail it's part of the learning process uh early in my leadership career I I took on too much or I was too much of a safety net and you ultimately are robbing them of the opportunity to learn and then ultimately like that hurts the scaling process down the road and hurts growth down the road or or requires you to work 80 90 hours so that you don't that growth doesn't (1:17:21) get hurt yeah yeah uh which some there's a time and a place for but you try not to do it for too long right uh last question what's the best thing that you've read in the last 12 months the 15 commitments of conscious leadership oh this has come up a couple times oh interesting it's fantastic um I still haven't read it i read uh or I listened to him do a podcast about it and then down like downloaded the Audible and it's been sitting in there for probably 18 months sounds like it's time it might be time i'm I'm like "Oh yeah Jim Demer that's (1:18:05) who it is." Uh I got to do it yeah I'm committing to you now publicly on on on the pod to my uh millions of listeners uh I I'll I'll read it cool well this was great i I I I feel like now I have such a better understanding of this uh myself and how to think through these these concepts from a very first principles standpoint um so I'm glad we went super duper deep here this is exactly why I like to do the pod and why I started it cuz I I just want to to find somebody's superpower and really download it and share it because I don't (1:18:46) see this type of content anywhere like this this type of granular u breakdown of this part of the GTM uh portfolio so this was a blast no surprise that Acid said you're one of the best out there and he doesn't say that lightly so I appreciate you coming on Matt thanks Kyle it's been a pleasure [Music] thank you for listening to the Revenue Leadership Podcast if you enjoyed it don't forget to subscribe and you can find a link in the show notes and be sure to leave a fivestar review share it with your network and please join me (1:19:23) next Wednesday for another great conversation