Where Strategic Partnerships and Marketplaces Fail

The strategic partnerships may sometimes sound like an El Dorado. But most of the time, you’ll be digging until you lose your nails for non-existing gold lodes.

The user problem

In the past years, I’ve seen countless initiatives to create online B2B marketplaces or partnership programs. Overall, many understand the need and “user problem” of finding the perfect blend of tools for an organization to be more efficient.

The SaaS market being very competitive, new services/products/start-ups sometimes literally being built over night, how can one pick the right tool to support his daily work?

How to compare a tool versus another, in terms of features, pricing, service level?

How to make sure that when picking a service, it will nicely integrate with the rest of the tool suite? And with all du respect, Zapier is NOT an answer. An “integration” should never be seen as just getting two products to exchange some data or trigger some hooks. Sturdy integrations involve new features/feature evolutions in each product to actually build that value of making them work together.

Overall it takes a lot of time, and represents a lot of risk (not even thinking of change management) for a company to get its tooling right. And most partnerships or marketplaces are more thought of as a solution to a sales problem “how to push my products more?” than to a customer problem “how to make sure the adoption of this tools will be good enough and actually bring the value I expect?”.

Failing to solve it

The wrong channel

Take the AWS Marketplace for instance. Check the number of reviews for the featured SaaS subscriptions. And still, most of them are really great products, with amazing benefits. But who would actually need to go to this Marketplace in order to subscribe? Who would go to this Marketplace to put a review? Most of those services anyhow have their own /customers page, where they nicely can publish case studies and other testimonials.

The wrong positioning

There’s also that moment when two businesses see that they somehow can draw a Venn diagram of their common customers. And then comes the question: “Hey, how about I ask them to share their customers list with me, and/or push my product to their customers?”.

Sad idea, most of the time. This is driven by your will to sell more, not an actual user problem which will get them to ask and pay for it. Why would they care? The fact that they had a problem that your “partner” could solve doesn’t mean that they have a problem you can solve.

The wrong technology

Let’s assume you’re in a situation where two visions come together. Your and your partner’s services/products converge. Together, you’ll rule the world. At least until the day you or your partners strategy will need to evolve, and convergence won’t be possible anymore.

But even then. Think of your technical debt. You partner also has some. If something doesn’t work in your product, you most likely can figure out where. Now from the user perspective, if the integration between your products doesn’t give the expected results, what’s gonna happen? Which support team will be contacted? Will they even be able to help the user?

And that’s also assuming that from day one, your products could work together. When you face a user land problem, which you solve with the development of a feature, you most of the time have several options. The option you’ll take will have deep impact on your product’s architecture, its ability to evolve and accept additional features. What are the odds the your partner did functional choices which can cope yours?

The wrong marketing

Let’s view here “marketing” as “communicating around the service and its benefits”. Building a brand and a product’s image on a market takes a lot of time. Intensive work from the product’s marketing team. Iterations. It is impacted by any product change/feature add. Being a good marketer for your own product is already a great challenge.

The thing is: while you’re busy making sure you get the right message out, that requires also that your partner conveys the same message. So either he’s really good at understanding and keeping up with your evolutions, or you’ll have to spend a lot of time training him. He’s gonna speak in your name! he’s gonna set your customer’s expectations!

The wrong support process

One of the most dreaded topics in partnerships and marketplaces.

As a customer, if I get a single entry point for subscribing to a wide range of services, my expectation is that the person/company I’m paying is responsible for finding a solution to any support case related to the usage of those services. Right?

We all know that’s not possible. THat’s even worse than getting the right marketing expertise: support requires you to have team knowing the product inside out. To be able to debug, whatever that may mean. Except of course it requires access to all your tools, code base, etc. What a partner/marketplace owner will never have.

Still that partner/marketplace can legitimately want to offer a certain SLA to his customers. Are you even able to sustain it?

Now in the event that those two point are solved: how do you operate the support? What if the marketplace’s support is based on Zendesk, and yours on Intercom.io? Lack of history and poor interfacing of the helpdesks lead to poor communication, which is the basic requirement in support.

The wrong business model

Especially in the Start-up world, how many times did you/will you change your pricing model structure?

Marketplaces, is they want to be scalable, need to support a limited amount of structures on their end. Will their choices correspond to yours? Or will you have to bend your product and its technology to have something that “works”? We’re back to the “wrong technology” chapter. And to the “wrong marketing”, as well. As so its goes for “support”.

Focus

The key learning point here is that even if you get all of those parameters right, there’s no “free money”.

May it be pure barter deals, or technical integrations: partnerships need maintenance. They need you and your team to constantly check if the partner is driving a parallel lane. Are they aware of your latest product evolutions? Are you aware of theirs? Does it even still make sense to work together? You have to train your sales properly. But you need to train theirs even more.

Each partnership may represent to costs and risks on:

  • positioning
  • Pricing
  • Product launch
  • Backlog/roadmap
  • Functional and Technical debt
  • Support
  • Sales pipeline sharing
  • Co-marketing activities

Each time you try to build a partnership, that’s something to keep in mind.

My take: be lean. Focus on real potential.

Featured image by darkday

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