TSG featured in Welcome to the Arena Podcast

Chad Cardenas, Founder & CEO, The Syndicate Group – Connecting Capital: Scaling Startups Through Strategic Networking

Case study - Empowering Channel Growth: Grip Security's Journey with TSG

As With Anything in Life, You Have to Commit

Channel relationships for an early enterprise startup trying to get to market, are more important than ever.  Why?  The rate of change in tech and tremendous access to venture capital are creating an extremely fast-moving and hyper-competitive landscape.  Channel relationships are also more difficult than ever to get right.  Why?  Simply put, the macro trends in the industry are creating fewer quality choices.  PE firms and larger industry players are driving massive consolidation, while the rate of change and shift to the cloud are leaving those who are not evolving, behind.

The channel companies who remain, however, stand to win big as they are the ones who are in a unique position to deliver outcomes for their OEM partners as well as clients.  This arguably puts them in the driver’s seat.  Which means the startups are not.  There are of course exceptions, but historically even the best early stage OEMs will struggle for mindshare and focus from the higher quality channel partners.

There are many things a startup can have that will help attract channel partners into healthy resale relationships, including: clearly defined value proposition and use cases, strategic product differentiation, a simple selling motion, a strong channel strategy and platform, a generous margin program, and add-on services opportunities.  But there’s an intangible element to this that most partners can sniff out immediately if not present: the commitment. 

Is the startup genuinely committed to being a channel-first company and building long-term relationships based on a truly mutual exchange of meaningful value?  Have channel relationships been tagged as ‘opportunistic’ or a critical piece of the g-t-m success of the company?  Is there a willingness to invest (leads, training, incentive programs…), early in the relationship and ahead of the business?  Are the margin programs designed for maximum success of the partner or minimum giving by the startup?  Is there an ongoing effort to proactively find ways for the partner to make money and look good in front of their customers?  If a difficult situation arises, can the partner be confident the startup will have their back? 

These are all questions channel partners are assessing and asking themselves in an effort to determine where their time and resources are best invested.  Remember, many IT Solution Providers have literally hundreds of OEM resale relationships, ie products they can sell.  And this evaluation of commitment is one of the ways in which they decide what relationships to devote the most attention to. 

In short, if you want to take channel relationships seriously and get the most out of them long term, you can lay up.  You can’t go halfway.  You have to make it a part of the company culture and a critical success factor.  If you put the partners first and make sure they feel it every step of the way, those relationships will be the gifts that keep on giving.  Just like with anything in life, you have to commit.

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