Channel Sales: Say what??(1/2)

#EnterpriseSalesUnplugged — a Paua Ventures Series on how to crack Enterprise Sales as a Start-up. From operators for operators. Actionable front-line stories. No BS. 🤞

Should you consider selling via channel partners as an Enterprise Software Founder? Hell yes!! There are plenty of rocketship-ventures out there that do exactly that. Yep: of course there are down sides with channel vs. direct. If done right, however, channel sales can become the most scalable sales channel of them all. Read on if you want to learn more — unplugged!

Welcome to the 1st edition of #EnterpriseSalesUnplugged. To kick things off, Felix moderated a panel spinning all around Channel Partner Sales & Enablement. Below you will find the key take aways. The gentlemen who participated know what they are talking about:

• Mirko (Founder and CEO of Instana): Raised USD 60M from investors like Accel before he sold Instana to IBM in 2020. Additionally, he co-founded the Codecentric AG with ~400 employees. Instana utilizes channel partners as resellers, Codecentric acts as a channel partner itself.
• Max (Co-Founder Actyx): A Munich based start-up from the Paua-Family. Offering an operating system that enables the digital factory by facilitating data exchange on the shopfloor. Actyx partners with IT/OT Systemintegrators that sell & integrate the solution in the market.
• Robert (Founder & CEO FireStart): A Vienna & Linz based Paua Portfolio start-up. Offering a Business Process Management and Workflow Automation tool. Go-to-market: Exclusively with IT Systemintegrators.

Channel sales is all about identifying, targeting and converting your Partners — and to then enable them to go hunting for you. That’s why this enterprise sales strategy falls into the “Spears” section of the framework we discussed in the #EnterpriseSalesUnplugged intro article.

Who are Channel Partners? Why work with them?

👫 Types of partners: Broadly speaking, there are three partner types. Classical resellers, value added resellers that provide extra products or services like consulting, integration or implementation as well as platform partners like Microsoft, Salesforce, Amazon or other platforms via which you can sell a software solution.

🎭 The good and the ugly: First, the ugly: You will have to share part of your revenues with partners (profitability). Maybe even more important for early stage start-ups: Customer feedback is harder to obtain and the customer experience is at least partially out of your control (product & brand risk). The good: You can benefit from the domain expertise of your partners — and kick-start sales based on existing customer relations & insights. Also: You can laser-focus on that high margin product-business while your partners take care of the rest (✨Sca-la-bility✨)

🤝Which business (stage) has a channel-sales-fit? At first, you should sell your solution directly to the customer in order to find product-market-fit (product maturity). Second: Before teaching 3rd parties how to sell your product, you must learn how to do it yourself (sales process maturity): What are buying triggers? Which stakeholders must be involved? How long is the sales cycle? Finally, the more non-scalable steps (customization, integrations, etc.) your customers require, the better your business tends to qualify for partner sales.

How do you find & convince the right partners?

🔍 Who is the right partner? Does the partner have a high number of customers that fit your ideal customer profile (ICP)? Does the partner have unique insight into the individual needs of your customers? Does the partner’s product or service fill a gap in our offering and/or does he help to use your product more effectively. If the answer to some or all of these questions is “yes”, you are likely to have a good partner-fit.

💎What’s your value to the partner? Do you enable the partner to sell new services and/or to attract new clients? Do you enhance the value of their product or service? How much revenue does the partner make together with you relative to his total revenues?

🧲 How do you bring partners on board? First, make sure to focus on the right stakeholders within the partner organization (people that “work” with your product, as well as people on the business side). Also, content marketing to nurture your “partner pipeline” works wonders. Create blogs posts & webinars. Send out case studies and success stories. The Actyx Magazine that was recently launched is a good illustration of what you can do as an early stage start-up.

We’d love to hear your feedback on this series. Are you building an Enterprise Software start-up? What are the challenges you face? Reach out to us! We’d love to chat, potentially include you in this series or invest in your company 💲

📞→ felix@pauaventures.com ←📞

Thanks for the great discussion on this topic to Max, Mirko and Robert! Thanks to You for sharing your thoughts, sharing this post or just providing a (couple) Claps on this one! :-)

Thanks to Christian & Georg for providing Feedback on this!!