Maidsfield Blog - Partnering and Business Development

(10 Companies Only)

HPSU Skillnet will host a full day workshop on the Commercial Value of Partnering on Wednesday, 24th March 2010. In order to grow a technology business internationally, corporate partnerships are an essential element. These partnerships help broaden the company’s market access and grow revenues. Business managers/owners need to understand partnering strategies, how to identify partners, the dynamics of successful partner relationships and the varied types of partners that can operate in generating revenues for a business. These are all critical and vital to succeed in selling through corporate partnerships.

This workshop will provide participants with an overview of partnering as well as demonstrating the commercial added value of engaging in a partnering strategy. The workshop will also touch on some of the tools and methodologies to use when considering a partnering strategy.

Profile: Donagh is the founder and Managing Director of Maidsfield Associates, providing business development and partnering consultancy for globally focused technology companies. With almost twenty years in technology development, sales and business management Donagh has been operating his own businesses since 1994. Donagh’s first business, Vistech Software, was featured in Deloitte & Touche Ireland’s Technology FAST 50 for three consecutive years.

Target Participants: The programme is suitable for CEOs and Senior Managers of young or established hardware or software technology product, software-as-a-service and specialist service businesses. It is expected that participating companies are already selling their products or services in the market, whether domestically or internationally.
Programme Summary: The programme consists of a full day workshop and a follow-up 1-to-1 next day meeting (1.5 hours) with each participating company to assist in partnering strategies and implementation plans.

Session 1 Partnerships Fundamentals
Partnering Introduction and Stories, The Partnering Objective, Business Readiness to Partner, Partnering in a SaaS Business, Business Models and Pricing
Session 2 Partnering Strategy – Workshop
Partnering Objective Workshop, Selecting Your Partner Types - The Market Ecosystem Approach, Devising Your Market Ecosystem - Breakout Session, Reviewing the partner types in the Ecosystem
Session 3 Partner Management (a)
The Business Flow - Capabilities and Responsibilities, Partner Recruitment & Partner Fit, Partnering into new Industry Regions, Partnering into new Industry Sectors
Session 4 Partner Management (b)
Multi-Level Relationships, Management & Reporting, Agreements - Heads of Terms – Commercials, Mixing Models - Partner types and Direct Sales, Building your Partner Programme

TO BOOK: Please email Gert O’Rourke - gorourke@hpsuskillnet.com

I had an interesting discussion with a long-time fellow traveller in the Irish tech scene yesterday. When my first business was 4 years old, we were his first customer to get him started. This business competes in a commodity service space against very large competitors. The reason I bought from him then is still the same reason when the company is selling its offerings today; that is ‘trust’ in the level of service and reliability.

So how does a small company internationalise commodity service and beat the big boys?

Two areas to think about:

1) Sectors Specialists
In a small geographical market, specialising on specific industry sectors may not provide enough market to sustain and grow your business, so you provide your services to many sectors within your region. When going international, unless you’re a big brand with deep pockets you need to focus on specific sectors and understand the key business issues in those sectors and how this relates to the service you provide. Being able to provide some specific features and knowledge that shows your specialist focus will make you stand out and beat generalist players.

2) Partner for Market Access and In-market Capability
Seek the type of partner that makes sense for your business. In reviewing the customer journey of what you sell from Gaining Awareness to Customer Support, what elements are imperative that you should keep and what elements can a partner provide with in-market credibility?

In my friend’s example, we discussed him seeking partnerships that bring proven relationships with his target customer base that can bring his business qualified leads and even assist in the delivery and support. The prime supplier-customer relationship will need to be retained.

In a bizarre mix of partner roles Referral and Support Partner responsibilities were discussed. Of course a referral partner network could be established with a separate support partner network could be progressed also.

Bottom line, partner according to what you need across your entire customer journey.

talk soon, Donagh Kiernan, www.maidsfield.com

When you are selling something that asks a company to change how it does things, it adds a complexity to the sale. Depending on the depth of the change required, the buyer has to involve more people in the buying decision.

In forging Strategic Partnerships, change is expected on many fronts from both companies. The promise of joining forces is evaluated and the joint opportunity sometimes requires much investment in time and money to make it happen.

When you are selling a product that fits well with a company’s existing product portfolio then less change is asked for and a faster decision can be expected. For example a client company has a product for Enterprise Systems Data Migration that works well with the large ERP and CRM systems such as Oracle and SAP. An ideal partner fit here are the System Integrator companies that implement Oracle and SAP Enterprise Systems.

The tactical part is that we are not asking them to change their business to resell our product. We are selling a product that fits in with their existing business process. This means that the sales people can understand and explain it, the implementation team can see how it can ease their burden or reduce their costs and the CEO of the company can deliver a more effective service or make greater margin on their business.

A comparison between Strategic Partners and Tactical Partners like Resellers or System Integrators:

The estimated times here depend on so many items and none more prominent that the market opportunity you are meeting or responding to. The more immediate the opportunity, the faster the Time to Revenue and the faster you start making a return.

Another item is cultural fit - How fast can the relationship develop for the companies to start working together? This takes longer for Middle East and Far East companies where relationships develop slower and look to the more longer term.

There is more to consider here, but thats for another day.

It’s a story we hear many times. Technology has being developed because it’s technically ahead of what is being done elsewhere. Then comes the challenge of finding what market it fits into and what possible business needs it can solve. How do we commercialise this technology?

This is also typical of college research projects. The focus is more on making the technology better and not on providing a better solution for a defined market need. There is always room blue-sky or basic research but it always helps to have some awareness on where it can link to market needs.

The search, identification and the resulting commercial alignment effort can produce many potential commercial paths which may or may not include the initial vision of the project. This often results in wasted time and money unless the possible commercialisation paths are identified early in the project so as to adjust the project direction appropriately.

From a commercial point of view, how do you make a success of this project? How do we commercialise this technology research project? Some thoughts that may help:

1) Is there an immediate market for your technology?

a) Who will buy and why? How many and how much?
If it is clear that there is an immediate market for the project’s resulting technology, then it should be easy to answer;
- who exactly will be interested in this technology?
- why will they buy it right now so that it is an immediate value to them?
- how much will they pay and how do you justify the value proposition?
- how many such opportunities are you likely to win in the market against the competition?

b) Is it a product, technology or IP?
If you have a patent and a prototype, then this may only count as IP (Intellectual Property) as the technology may need to be completely redeveloped to suit the licensee’s purpose.

2. If there is no obvious immediate market then ask; What was the Vision of the future in conceiving the project?
a) In what future does the technology fit?
Describe how the market would use your technology and how things will be done

b) Why will people use it?
Understand why your technology will be used ahead of other ways of doing the same things.

c) Who will you be competing with in this future?
In this future what or who are the likely competitors of your technology?

d) Are those competitors here today?
Do these competitors exist in the market today and why are they not doing what you’re doing? Is it in their development roadmap?

e) Could you help these competitors meet this vision?
Rather than waiting the 5 years or so to compete with the current market leaders, could you help them realise this future vision with your technology. This would likely make a great partnership of their market presence and your technology.

3. To evaluate further, what are the components or layers of your technology?
The secret value may be in a sub-part of the overall project. As we see sometimes, we may build terrible cars but fabulous engines. What are the fabulous engines in your project?

a) Review each component for all its possible Uses or Applications

b) Review the market opportunity for each Use or Application

Commercialisation of technology research is never straight forward but the rewards maybe in the hidden value and that there are many opportunities in licensing your technology by analysing it a little differently.

Once you have identified the a market, then comes the search for the technology or commercialisation partner.

So, you have a technology product and are seeking partners to get into new markets. Your offering is easy to explain, you know what type of customer you want, why they will buy and what’s involved in selling to them.

You think big and want to partner with the largest companies in the market? After all, they do have the broadest reach and the greatest financial strength and could deliver great sales revenues for your business and really broaden your user base. Have you considered the effort, the elapsed time to decisions and ultimately the time to get to your target end-user customer who is going to pay money? Have you considered the time-to-revenue in partnering with the big guys?

Would you prefer to get decisions quickly at a strategic level, quickly get an understanding of the commercial arrangements between both parties, understand how the sales team really sell and where your product fits neatly in their clients’ businesses? Will you get this with a SAP, Oracle or any other monster size, broad product portfolio and with diversified organisations?

For faster decisions with a narrower and clearer focus on their growth strategies and a much easier task in educating their sales teams, I recommend you seek out the “Aggressive Followers” in the market.

These are the companies that want to be an SAP or an Oracle, but today they have not yet saturated their primary markets and have not yet diversified to broaden the portfolios. In SAP’s ERP market they are still organisations with up on $1B annual sales revenues.

How do you identify the Aggressive Followers in the market?

1) Look at the leaders in the following pack

In reviewing the annual sales figures of the top players in the market, you will typically see a small group of the top players being much bigger than the second group of companies. Then, well below this second group is a group of much smaller companies at various stages of development.

The “Aggressive Followers” are likely the second group or the following pack. Review the leaders in this group. This depends of course on the size and the maturity of the market.

2) Look for focused acquisitions, not broad diversification (or ‘deworsification’ as Warren Buffett might call them)
The Aggressive Follows want to be leaders, but currently are much more focussed and not over-diversified. The value in working with these organisations is that they are focussed and will be capable of faster decision making around whether your products will fit or not.

Their sales people have a much smaller and more focussed product portfolio to sell and thus will have more mind-space to include your product in their suite, as long as it fits.

3) Look for clear focus taglines - what customer need do they solve?
Their focus can be seen clearly in how they market themselves. Their horizontal, vertical and regional focus is stated clearly and can be seen in announcements and trade events. They are usually the best in their selected niche industry sectors.

4) Look for strong year-on-year revenue growth, signifying strong execution and successful solution delivery
Their ability to execute on their business plans and deliver great solutions, services and support to their markets is very clear in their year-on-year growing sales revenues. They are aggressively tackling their markets and beating back weaker competition to grow their market-share and revenues.

5) Look for regular announcements of good customer wins
Review their website news sections or press releases to find that they have a growing number of customer success announcements and are working to capitalise on each one with effective PR and promotion materials.

6) Look for Culture and signs of life, awards won, clear company leadership and a general good feel about the company and people running it – It feels like a good team effort.
Look for awards they won that may signify the company to be a performance driven and having a strong team culture. Look for announcements, conference speakers with very capable people across their organisation and not only the CEO being mentioned. This likely signifies a strong team culture or multiple leaders driving an effectively structured business strategy and plans. Review the background and expertise of key senior team members to understand what they bring to the team. This will give you a greater feel of the culture of their organisation.

The Agressive Followers want to move fast. They want to make decisions fast, both YES and NO. So they won’t waste time, theirs or yours, on what they believe doesn’t fit. They are hungry to progress, so if you can give them something to progress their plans faster or better, they will listen.

This is not to say that you shouldn’t seek partnerships with the largest companies in the markets, but just be aware of what effort it takes to secure an effective partnership and how long it may take for the big wheel to turn and deliver revenue into your organisation.

So rather than thinking of partnering with the leades in the market, you might choose to have a number of the Aggressive Follower in different markets to gain faster return on investment and spread your risks and efforts to many companies.

Over the past week in meeting almost 90 business people in events with Niall Devitt of Beyond the Boardroom and David Brock of Partners in Excllence at 4 different events and hearing some great stories, the question of combining strategies of Direct Sales and Partners Channels Sales came up a number of times.

The story goes as follows:

A company builds up its business with an effective international direct sales organisation targeting their primary markets in a very focussed manner. Secondary market opportunities are presented to the company but the organisation is not structured to sell or deliver outside their primary markets and thus the opportunity is not responded to. The direct sales focus on the primary market is essential but it leaves the secondary market untapped.

The business has the opportunity to established sales-side partnerships to sell and deliver into their secondary markets.

Your Secondary Markets could be defined as:
1) Alternative geographical regions that are outside your primary focus. Western culture or English speaking markets may be your primary market, then gaining access to non-English speaking regions is typically executed through corporate partners.
2) Alternative industry sectors for existing product outside your primary sectors. You likely do not know your secondary sector markets as well as your primary markets. It may be more effective for your company to focus on partnering into these sectors than to distract your primary direct sales teams in building up expertise in a new sector.
3) Alternative uses of your technology into different types of customers. Some of your technogy may be applied to solve different business needs targeting buyers outside your current industry or current target customers.

While your organisation stays focussed on its primary strategy consider establishing a secondary strategy to tackle secondary markets through partnerships, whether OEM, Strategic Partnerships or System Integrator reseller partnerships.

See two past blog posts on “Why Good Strategic Partner Fit is Imperative - Part 1″ and “Why Good Strategic Partner Fit is Imperative - Part 2″.

Far too many companies accept the partners that come to them, because “we have nothing to lose, we’re not represented in that market, so if they sell we’re better off”. But with a small bit of planning and effort you can proactively approach the market, region or sector, to meet your business objectives and not simply respond to someone else’s possible once-off sales opportunities.

In gaining an understanding of whether a partner will deliver on your joint objectives, there is much you can tell in reviewing what they say about themselves, by reviewing their websites and various promotional materials. If you want to spend time working with the right partners you need to spend time finding the right partners.

In evaluating Prospective Partner companies you can review their websites and public materials to understand whether you want to speak to them to further qualify the prospect and thus decide who you can possibly work with. All 7 criteria don’t need to be perfect, they merely need to be considered in making your decision and how strategically and operationally challenges can be addressed. The 7 criteria are inter-related, like many things in a business. It is worth looking at the company from different points of view including who else they’re partnering with. Consider the adage, “if you want to know me, meet my friends”.
The 7 Criteria for Best-Fit Partner Analysis is linked to the alignment of the following (and Gut Instinct):

1) Business Model
I wrote a previous post on the challenges in partnering a SaaS business. If your company has a SaaS model and your prospective partner typically sells perpetual licences then this presents an immediate clash in charge models and sales incentives. If sales persons in the partner company get their commission when the customer pays, how long will they be waiting for the money in a SaaS model as opposed to a big initial licence fee sale. Businesses have found some solutions to this challenge and SaaS businesses are changing their approach to address.

2) Sales Models & Marketing Approach
How do you prospective partners sell their sales? What is their marketing and sales process and how can you fit into this? Do they focus heavy on marketing and lead generation and the sales follow ups OR do they know exactly who they want to speak to and focus more on the sales process? Neither is wrong, but if your company has a similar approach it makes it easier to work together and build relevant relations all along the customer journey. Other things to consider, are your prospective partners:

• Cost or Efficiency Driven Sale or Revenue Growth Driven Sale or Risk Protection Driven Sale
• Consulting Led Sales or Product Led Sales
• Thought Leadership or Direct Contact Sales
• High Profile or Under-the-Radar
• Pioneering Market (Missionary Selling) or Existing Established Market

3) Pricing Strategies
Do they adopt a premium market or higher volume lower cost approach? Where do you fit into this? I’ve seen companies increase the rates by partnering up market a little, thus increasing the ‘batting level’, credibility and thus move them up the value chain. You need to decide what your company wants.
4) Implementation & Solution Deployment
For example, System Integrators revenues are service days, licences and annual support & maintenance. If you have a minimum deployment cost, whether on-premise or Web deployed, it is less attractive to a System Integrator. In fact you may be competing directly with them. Understand what other software partners your prospective partners have and what type of deployments they have. Is the solution type Enterprise Solutions/SME deployed and is it Server Side Solution / Client Side Solution?

5) Growth Strategies
Review the prospective partners’ growth plans. This can be easier if they’re publicly quoted companies, as long as the division you want to partner with features separately in their shareholder communications. Are they in a Narrow Global Market that fits your business or are they very broad in Wide Regional Markets? How might this reflect your business approach? Do they have a large direct sales force or do they sell through partner channels? If they have a direct sales focus you are obviously closer to the customer than them operating through sales channels, thus faster potential revenues. Although if they have effective partner channels and your products fit well, their longer term upside could be significant.
6) Organisational Culture
Cultural differences are often cited as the reason 50% of failures in company mergers and the greatest difficulty in acquisitions and joint ventures. Some examples are, are they?

• Team Driven and Shared Leadership / Command and Control
• Aggressive Growth and High Performance / Cautious Growth
• Strongly Sales Driven / Strongly Delivery Driven / Strongly Product Driven

7) Business Objectives
Do their stated business objectives align with your objectives for the partnership? If you’re in a hurry, as most growing businesses are, do they show or state:

• Fast Revenue Growth / Cautious Cost-Effective Growth
• High-Profile Building Potential / Purely Revenue Driven
• Seeking 5 year Exit / Seeking Profitability

THEN Gut Instinct. If you know about technology businesses you can read between the lines to gain an understanding of their business reasonably quickly and make assumptions to be later verified. Keep in mind where their market is going and try to read into their reactions to possible market changes.

The 7 Best-Fit criteria don’t have to fit perfectly, but keep them in mind and use them as a framework. An effective partner relationship is all about people and how well the parties commit to overcoming the challenges as the gains greatly outweigh the pains.

Based on the interest in our morning event, we have decided to run the event again in the afternoon of Tuesday 29th. 

Internationalisation is the biggest single challenge facing the Irish Tech Sector today. Having ambition in Ireland, means you’re looking international quickly. Irish Tech companies almost immediately face great challenges to make their business successful.

On Tuesday the 29th of September 2009, between 2:30pm to 6:30pm at the Hampton hotel in Donnybrook, Dublin 4, we invite CEO s of Irish Technology Companies to join us - Register Today, limited to 30 attendees.

The event will present talks from leading International and Irish experts, case studies from successful indigenous Irish Technology companies, and an opportunity to discuss the challenges and pitfalls of the International business landscape with your peers.

On the back of their recent partnership announcement Donagh Kiernan of Maidsfield Associates, Niall Devitt of Beyond the Boardroom and David Brock from Los Angeles based Partners In EXCELLENCE, will present and discuss how Irish technology companies can to succeed in international markets.

The Partners In EXCELLENCE, Beyond the Boardroom and Maidsfield Associates Strategic Partnership’s focus is to help Irish Technology companies accelerate the results they achieve through their Internationalisation efforts. The partnership brings together experience and track record in helping companies successfully expand globally. Leveraging the capabilities to access new regions, markets, develop new channels and alliances; this partnership will help Irish Technologies improve the results they achieve in competing in a global market.

Whether your organisation is seeking to go international or already trading abroad the internationalisation partnership can assist you to ensure you achieve the highest levels of performance and the best results possible.

Together, Maidsfield Associates, Beyond the Boardroom and Partners In EXCELLENCE have helped Irish and other organisations achieve tremendous results in Internationalising. Organisations like Qumas, InnerWorkings, Decare Systems Ireland, Helix Health, Dolphin Software, Enterprise Ireland, IBM, HP, Canon, Motorola, Ericsson, Dassault Systemes, NCR, and others.

Timetable

14:30 Arrive, Coffee and Registration
15:00 Welcome and Introduction - Donagh Kiernan & Niall Devitt
15:10 Corporate Partnering into Markets - Donagh Kiernan
15:50 Hi Tech Globalisation Options - David Brock
16:30 Internationalisation Workshop - facilitated by Niall Devitt
Breaking into roundtables / groups and discussing internationalisation challenges and potential solutions
17:50 Coffee and Networking
18:30 Close

Attendees are limited to 30 - register today

Driving your business through corporate partners helps build a much more scaleable business. It takes time to get the channel started and the channel needs feeding. How you reward your channel depends on what you expect from them and what your corporate partners are doing for you.

Partners should be rewarded according to the extent of the results and to what extent they contribute to the sale and delivery. There are various levels of responsibilities along the sales process / customer journey between your partners and your company, depending on the type of partnership and respective company capabilities.

Some points of note:

Typically you own the customer relationship if you’re delivering the full service. If your offering is part of a full service and you are not the prime-contractor, then you may not have a direct commercial relationship with the client.

Finders Fees and Commissions are payable on successful sale and cash in the bank, but the timing may vary for Finders Fees just to keep it simple.

Sharing Commissions may be required between your sales people and different types of partners. This should be clearly defined from the outset to avoid any confusion or conflict. You need your sales people to see the value in working with partners. Your commissions must be defined accordingly.

It would be interesting to hear how companies balance sales people’s commissions and shared responsibilities and commissions with referral/reseller partners?

I had a meeting this week with one of my client companies who are at the leading edge of the industry with their expertise and technology. They really have a tremendous market opportunity. Talking to the board members and key individuals of this small innovative company led to addressing the question:

“How we best capitalise on this international market opportunity in the marketplace?”

“We can target the market directly and talk to 30 of the relevant companies. This will definitely produce more than enough consultancy and follow on technology sales to establish us in this space.”

“The downside to this is that once we get into delivery mode it will tie up the key people very quickly and it’s hard to keep selling to continue to grow and we really only have a limited window of opportunity here”

My thoughts: “sell direct, but include securing strategic partners in your sales process.”

Then “If we can sell direct, why should we consider selling through strategic partnerships?”

How about the following reasons for selling through corporate partners:

1. The offering is defined and easy to explain. The benefits can be communicated easily. Partners will understand quickly and see the opportunity quickly.
2. Reduce Cost of Sales - You could partner with organisations who have strong commercial relationships with your target clients. They can get you straight in the door on a commercial basis, thus greatly speeding up the sales process.
3. Focus on Your Strengths - You have a limited window of opportunity before other organisations establish themselves and take over your opportunities, so there is an element of land-grab working with your selected leading organisations. They may deliver the bulk of the services, but at least you can sell the premium services and grow your team accordingly and sell software licences also.
4. Access to larger sales force - Partners will present and sell your offering in their market far faster than you can. They are more established and in the market sector and/or region you want to be in.
5. Access to broader market - You can’t be everywhere at once, but you can build up a partner network to get you into key sectors and regions.
6. Increase revenue sources – you cannot have the full pie from each customer, but should target to have a more premium piece of the pie from many customers
7. Increase licence revenue growth – increased number of consulting customers brings more software licence revenue opportunities
8. Increase shareholder value – a wider spread customer base means a more stable business and growth path, thus increased business potential and increased shareholder value.

Besides, if the company’s strength is not in sales, why not let other people sell what we do. We can always sell direct as well.

Donagh Kiernan, Maidsfield Associates

Internationalisation is the biggest single challenge facing the Irish Tech Sector today. Having ambition in Ireland, means you’re looking international quickly. Irish Tech companies almost immediately face great challenges to make their business successful.

On Tuesday the 29th of September 2009, between 10am to 2pm at the Hampton hotel in Donnybrook, Dublin 4, we invite CEO s of Irish Technology Companies to join us - Register Today, limited to 30 attendees.

The event will present talks from leading International and Irish experts, case studies from successful indigenous Irish Technology companies, and an opportunity to discuss the challenges and pitfalls of the International business landscape with your peers.

On the back of their recent partnership announcement Donagh Kiernan of Maidsfield Associates, Niall Devitt of Beyond the Boardroom and David Brock from Los Angeles based Partners In EXCELLENCE along with guest Kevin O’Leary CEO of Qumas, the internationally successful Irish software company, will present and discuss how Irish technology companies can to succeed in international markets.

The Partners In EXCELLENCE, Beyond the Boardroom and Maidsfield Associates Strategic Partnership’s focus is to help Irish Technology companies accelerate the results they achieve through their Internationalisation efforts. The partnership brings together experience and track record in helping companies successfully expand globally. Leveraging the capabilities to access new regions, markets, develop new channels and alliances; this partnership will help Irish Technologies improve the results they achieve in competing in a global market.

Whether your organisation is seeking to go international or already trading abroad the internationalisation partnership can assist you to ensure you achieve the highest levels of performance and the best results possible.

Together, Maidsfield Associates, Beyond the Boardroom and Partners In EXCELLENCE have helped Irish and other organisations achieve tremendous results in Internationalising. Organisations like Qumas, InnerWorkings, Decare Systems Ireland, Helix Health, Dolphin Software, Enterprise Ireland, IBM, HP, Canon, Motorola, Ericsson, Dassault Systemes, NCR, and others.

Timetable

10:00 Arrive, Coffee and Registration
10:30 Welcome and Introduction - Donagh Kiernan & Niall Devitt
10:40 Corporate Partnering into Markets - Donagh Kiernan
Guest: Kevin O’Leary, CEO Qumas
11:20 Hi Tech Globalisation Options - David Brock
11:50 Internationalisation Workshop - facilitated by Niall Devitt
Breaking into roundtables / groups and discussing internationalisation challenges and potential solutions
13:10 Lunch and Networking
14:00 Close

Attendees are limited to 30 - register today

To continue from the post “Why Good Strategic Partner Fit is Imperative – part 1“.
The real cost in getting it wrong is opportunity cost. Basically the lost time and opportunities in the time spent working on something that doesn’t produce. There are a number of simple things which help in building a corporate partner relationship and making it successful if you look for them and plan for them at the outset.

Parrt 1 of this post was learning why partnerships fail. Looking at the flipside of this, why do some Corporate Partner relationships work?

1. Know your prospective partners. You can tell much about a company in how they communicate. This is why Blogging and Twitter has become so prominent in building relationships. In reviewing a company’s website, blog, annual reports, press releases and general press you can find out pretty quickly if they fit the type of a company that you would like to do business with.

2. The product was good and the company really knew their customer, why they would buy and had the sales materials to back it up. They clearly had good track record in selling their solution and knew their market space

3. The market quickly saw the value in the product and clearly understood why such a corporate partnership made sense

4. The initial training, both product and sales, was very professional and enabled the partner company to be more effective faster

5. The on-site pre-sales support for the first number of opportunities was a great start and it really showed commitment to the partnership. A little hand-holding goes a long way

6. The multilevel relationships between the two partnering companies is great. With regular communication and occasional face-to-face meetings, at CEO and Divisional Head level, VPs of Sales, Marketing, Implementation and Support. Each level understands how each-others business works and it works together. Feedback works at many levels to make up for the missing direct connection to the customer

7. From the outset we all knew the expectations and we knew our responsibilities and with regular calls and meetings with straight-talking and supportive management between the companies, everything was clear and issues were dealt with swiftly. The joint market and customer focus brings clarity every time. Everyone understood that the opportunity was worth the investment.

Much greater success in corporate partnering can be achieved with better understanding and analysis, and I don’t mean over-analysis of what your business really requires and what you expect from a prospective partner.

All to get a better view of whom you should partner with and apply your time and energies with the right companies. Not every company that approaches you is the right one. Its good to be sought after but it better to spend time with the good-fit partner companies.

In Maidsfield, we work to start calling your prospective corporate partners within 5 weeks of initial engagement.

Watch out next week where we talk about how we analyse your target market with our “Ecosystem & Trends Summary Report”, combined with lists of target customers and prospective corporate partners.

The bottom line in all things business, is delivering effectively, delivering and exceeding the ultimate customers’ expectations. Learning what works can be highly expensive when we have to backtrack and go again in a different route. Strategic Partnerships can deliver great success when it works, it can be enormously frustrating, disappointing and expensive when it doesn’t.

A key part of what we do in Maidsfield Associates is to focus on matching our clients’ business objectives to suitable partners in the chosen target markets. As defined in Maidsfield’s Corporate Partnering Process we review seven criteria in evaluating partner-fit and develop an understanding of the potential partners business to see how they could work together with our client to meet the market opportunities.

So many Strategic Partnerships fail because of the most obvious of reasons, in hindsight:

1. The partner’s sales people sold their own product before yours, because it was easier to sell, they met their targets easier and made more commissions not focussing on selling your product.

2. The partner company’s management hadn’t taken on board the full opportunity to grow a new business area and wasn’t fully committed. Things slowly died away and eventually people faced reality.

3. The partnering plan didn’t go much further than a good idea and good story press release. It helped the profile of your business in your existing proven markets and possibly your investors but it didn’t produce revenue.

4. Your partnership was based on an initial opportunity identified by the partner, and that’s great, but it was not their core business area and they simple seized an opportunity that presented itself. They were ill equipped or not interested in pushing further. So be aware of your investment time in once-off opportunities with partner companies that approach you.

5. There was too much effort in getting the partner up to speed in selling your solution and their expectations of your pre-sales department were excessive. They probably wanted you to do all the work and they get the sale. They weren’t doing their share. You expected them to start selling immediately and transfer the cash to you on a monthly basis. The expectations on both sides were just not right from the start.

The real cost in getting it wrong is opportunity cost. Basically the lost time and opportunities in the time spent working on something that doesn’t produce. You need to gain an understanding of the target market through a “Market EcoSystem and Trends” summary analysis, identify your potentials, rank your targets, make your decisions and then follow up.

Watch out for part 2 with what it means to get Strategic Partnerships right.

What type of partnerships suit a Software-as-a-Service (SaaS) business?

End-users would always love to pay on a drip-feed-as-value-gained basis. It eliminates risk and spreads much of the costs over the value period. SaaS preaches this message. There are many advantages to SaaS businesses, but years on we’re still learning to balance the business’ cash requirements and customer charge models. There are many variant hybrid models floating between monthly subscription and a full upfront perpetual licence fee.

How do you get a reseller channel working on a SaaS model?

SaaS businesses are different in how they sell? If your business model is purely monthly subscription based and no setup fee then how to you incentify your sales people? ‘Traditionally’ you would pay your sales person’s commission on new business once the cash had been received. Sales people operate best in an instant gratification model. They win, they get rewarded, they get happy, then go sell more. They are ‘coin-operated’ sales people.

Many resellers, system integrators and independent software vendors still operate on full licence fees paid upfront basis to incentify their sales engine. SaaS businesses don’t generate cash to enabled paying lump-sum commissions on a cash-received based.

Consider a Sales Person’s Choice: When a sales person has an option of selling a product with full commission upfront and or one with a drip-feed commission over 3 years, which is he going to choose?

What should you consider when selling your SaaS software through resellers?
Assume they are a suitable partner with access to your target market and have the necessary skills to resell your offering)

1) Business Model Differences
Does the reseller currently sell or has sold SaaS offerings?

2) Sales People Incentives
Are their sales people currently incentified in lump sums on a cash receipts basis? How will your product sell in this mix? What do the sales people think?

3) Agility / Pace of Change
SaaS model is associated with highly scalable growth, will your partner still be suitable to work with you through many iterations of change. How fast can they educate their sales people? How fast can they respond to the market?

4) Culture / Customer Focus
When you’re concerned about keeping or losing customers of your SaaS system on a monthly basis, you are deliberately highly responsive to customer needs. How will this work through a reseller?

5) Legacy, History and Tradition
It’s hard to change mindsets. When people and businesses are used to operating in a particular way, don’t expect instant change. When a reseller or a sales person is starting to sell their first SaaS offering, the differences will take time to get used to.

So how do people made it work?

I know of one company who changed the charge model to include a setup fee, just so they could incentify their sales channel?

Another, their offering added value and helped sell another product with an initial licence fee and thus gave the sales person an added bonus drip feed commission over many months into the future?

How do you incentify your sales people in your SaaS business?
How do you overcome the channel effectiveness challenges in partnering your SaaS business?

Can any company at any stage successfully secure and sell through corporate partners?

With the right commitment from both sides, the partnership can of course produce revenue, but will it be profitable given the amount of time and energy needed to produce the results?

A successful profitable partnership needs to be based on a reasonably compelling offer for both parties. When you seek partners you should be ready, somewhat.

An ideal scenario is outlined by the 10 points
1. You have a product that is proven with strong referenceable customers
2. You have defined marketing and sales process that works in your existing markets
3. You have good marketing and sales materials, including website that really supports the sales process
4. You are operating in a proven business space with growing market opportunities
5. You have a clear Value Proposition and Competitive Advantage that wins customers
6. You’re business success is not dependent on a small number of people
7. You have defined charging model across consulting, product, options, implementation and annual maintenance
8. You have a product and services development roadmap responding to or leading market requirements
9. You have defined clear responsibilities and revenue splits for a real mutual beneficial relationship with a partners
10. You are committed to a Corporate Partnering approach to the market and are realistic in your expectations

So how does your company score in meeting these requirements?

If you score high in all these, in full spirit, then you’re likely ready and a Hearty Congratulations, as these 10 points are a big achievement for any company.

The good news is that you don’t need to have all 10 fully defined and proven to be successful. This is more like a weighted scoring system rather than one requiring a full score in each. Like everything else, being very strong in some areas can make up for being weak in others.

I know early stage companies who have a very compelling offering easy to explain with experienced management, they are likely very ready to partner.

I know established companies who have a very complex offering and where it is difficult to explain and this more difficult to sell. More difficult to sell means much more difficult to get a partner to sell successfully.

Remember, partnering into a market should be taken as seriously as establishing an in-market office, just much more cost effective.

The Internationalisation Partnership - Partners In EXCELLENCE, B2BTraining and Maidsfield Associates

Cork, Ireland – August 7th 2009 – Maidsfield Associates, a business development and sales-side partnering consulting company for the Irish technology sector has entered into a three-way partnership with Beyond the Boardroom, an Ireland based Sales Leaderships, Consulting and Training company and Partners In EXCELLENCE, a US based sales, partnering and globalisation consulting and service business.

The focus of the partnership is to help Irish Technology companies accelerate the results they achieve through their Internationalisation efforts. The partnership brings together experience and track record in helping companies successfully expand globally. Leveraging the capabilities to access new regions, markets, develop new channels and alliances; this partnership will help Irish Technologies improve the results they achieve in competing in a global market.

Whether your organisation is seeking to go international or already trading abroad the internationalisation partnership can assist you to ensure you achieve the highest levels of performance and the best results possible.

Together, Maidsfield, Beyond the Boardroom and Partners In EXCELLENCE have helped Irish and other organizations achieve tremendous results in Internationalising. Organizations like Qumas, InnerWorkings, Decare Systems Ireland, Helix Health, Dolphin Software, IBM, HP, Canon, Motorola, Ericsson, Dassault Systemes, NCR, and others.

“I’m very excited about the impact this partnership can have on helping Irish Technology companies Internationalise. A key growth strategy for these companies, is globalisation. Together, we bring both a track record, experiences, and resources that can accelerate the results companies achieve, while significantly reducing risk in these programs.“- David A Brock, President of Partners In EXCELLENCE

“The future of Irish business lies in our ability to deliver internationally. This unique initiative is about giving Irish Tech companies the tools to overcome the challenges and pitfalls of the International business landscape. Our aim will be to deliver results, quicker and more effectively than has previously been seen.”, - Niall Devitt, Managing Partner of Beyond the Boardroom

“I’ve experienced first hand the challenges of internationalising Irish Technology companies. In expanding the capabilities and international reach of working with such good people as in David’s and Niall’s organisations, is about delivering faster and more effective results for the international success of Irish Technology Companies. ”, - Donagh Kiernan, Managing Partner of Maidsfield Associates

About Maidsfield Associates
Maidsfield Associates is a business development consulting company providing services to established internationally focussed technology companies. Maidsfield helps its clients meet their growth aspirations through delivering consulting services in Sales-side Corporate Partnerships and Strategic Business Development. Maidsfield clients include with internationally focussed technology companies in Dublin, Limerick and Cork.

Maidsfield’s founder, Donagh Kiernan has 20 years experience in working in, owning, driving and delivering results with international focussed Irish technology companies. In 2007/2008 Donagh was selected by Enterprise Ireland as one of 32 Irish business leaders to participate in a year long “Leadership for Growth Programme” for globally focussed business leaders delivered by the prestigious Stanford University in California. He is an active contributor to Irish Technology industry development organisations through it@cork, NSC Campus, Irish Software Association, CIT Alumni and on Enterprise Ireland initiatives.

About Beyond the Boardroom
Beyond the Boardroom is a leading Irish business development consultancy, working in the areas of sales leadership, sales management consulting and sales excellence programs.

Niall Devitt is the founder. He is a member of Top Sales Experts International team and the founder of Sales Leadership Ireland. His blog on sales know how is one of the mostly widely read sales resources on the net.

About Partners In EXCELLENCE:
Partners In EXCELLENCE is a global consulting company, focused on helping its clients achieve the highest level of results and performance in Sales, Marketing, New Product Introduction, and Globalisation. The firm is known for its pragmatic approach to driving significant growth and profitability for its clients.

Definition: Missionary selling = having to sell the concept and then having to sell your solution and your company. Usually creating a new market or selling a revolutionary or disruptive solution.

Technology visionaries see how it should be. They see the blatant inefficiencies, stupidity and  wasted money. They create fantastic solutions from leading edge technologies that can change how we work and live, whether the market is ready or not. The visionaries, with great energy and enthusiasm, start preaching “the changing world” and how things should be and thus their solutions are introduced to the market.

“People NEED to change”
“Businesses NEED to adopt new ways to compete and stop the wastage”

But people won’t change until the market tells them to do so and not just because there are efficiencies to be gained. There is risk in change and there are vested interests in not changing. When a market begins to decline, innovative solutions come to play from existing market players or from new entrants.

When an industry’s players are making money in the current industry structure how do you get in with a disruptive offering?

Geoffrey A Moore has written much on this. A great author. Great books. I’m currently reading and highly recommend “Dealing with Darwin”. It was recommended to me by a client, Kevin O’Leary, CEO of Qumas.

I’ve seen this, experienced it and learnt the hard way. When you sell the visionary sell, it’s very hard work to get things moving. The visionary becomes an evangelist with unwavering belief converting a number of strategic thinkers in senior positions in key target client companies. The business can become a sequence of paid pilots and trials rollouts or projects to demonstrate the value to their operating teams. But slow to grow to full scale projects.

How do you get over the hump of “just too many vested interests keeping things as they are”?
“The market will change, it only makes sense!”,
…quoting a great Irish technology business leader “But will they starve in the meantime?”.

You see this visionary thinking within university research projects, and rightly so. They are projecting years ahead on how things should or will be done and providing solutions to meet this need, not taking the challenges in the current market structure into account. If it takes five years to change the industry, what’s going to feed us in the meantime?

So how can visionaries get to the market and build a business to reap the rewards of their efforts; like eating an elephant, bit-by-bit and not a whole elephant on a plate.

Firstly, how do you know if you’re visionary selling?
1) You have no direct competitors. Others are likely solving the business need very differently and maybe even labour intensively
2) It’s a regular discussion on the various ways to communicate ‘what it is’ and every sales presentation may be different (making very difficult to learn what works)
3) If you had market success, some businesses types would be no longer needed in the marketplace
4) The passionate visionary tends towards seeking appreciation for the creation or idea from like-minded people and finds it difficult to talk to the tough decision makers
5) The visionary takes it personally, when its suggested we focus on solving more mediocre problems and not the revolutionary sell

So what do you do?

1) Don’t give up on your vision
But don’t be so firm on every detail. Think about what you want but don’t get caught up in the detail of how you will get it. Lets work that out on a step-by-step real world basis.

2) Sell at an operational level and get faster decisions
Change the language and consider the needs at at operational level and how these needs may change over the years. Unless you have loads of investment, stop trying to stomp all over the structure of the industry and work within the current structures to start the change.

3) Sell what the customer wants today
Consider the baby-steps towards the vision. Breakdown the value in your solution and offer it bit-by-bit in easy to swallow low-risk chunks of success for your client.

4) Make it easy to buy. Make it easy to say yes.
Low pain, low risk, easy to get started, clear value proposition, no great dissenting voices…

5) The greatest competitor of the full vision maybe a great partner in the bit-by-bit approach
Can you help the other solution providers move towards the vision? These are the companies that are operating successfully in the market. They have the relationships and have the money. Do you have an offering for them that can improve their business without threatening to take away their lunch?

6) Build slowly by nurturing good beta customer relationships
Bit-by-bit, step-by-step, crawl-then-walk-then run. When you’re clients say you have something then go talk to 10 potential clients, with the same message. Learn, change and progress from there.

7) Learn from leaders
Remember how Google started; slowly, offering something of value and low-risk from the start.
Remember WebVan; crazy, huge investment and changing the world.
Remember how Amazon started; slowly, low investment and learning with every sale.

8 ) Work with good advisors and find a strong industry partner to help commercialise your idea

9) Read Geoff Moore’s books

In an active project at the moment, I’m assisting a client company in their Internationalisation plans and helping them enter the Middle Eastern Healthcare markets. So Maidsfield is identifying and opening the doors to their best-fit System Integrator or Support Partners. [Sometimes called: VARs (Value Added Resellers), Implementers, Channel Partners, Solution Providers, Dealers, Agents, ISVs (Independent Software Vendors).]

In analysing the specific markets, on first looks, the competitors are diverse companies that seem to have responded to opportunities on the edge of the core industry domain expertise. Basically the companies don’t seem to specially focus on Healthcare but have delivered projects into the sector. So, should we consider them as competitors?

In some cases the perceived competing System Integrator companies have partnered with competing product companies and implemented their product into the market. In other cases they seem to have developed their own. There is only so much you can tell from reading their websites and searching the news items. There is only so much reading between the lines you can do with Middle Eastern companies; the lines are few. They haven’t adopted the active and open web communications to the same level as Irish companies yet, or to that of many other western markets.

The scenarios, to be validated, could be as follows (note: I’m an optimist first, but a simple phone call can verify the scenarios, nothing ventured etc etc):

1) The Perceived Competitors have gained some exposure into this market but haven’t yet started to really push it as a real opportunity. With the right product and specialist partners with the relevant track record, who is serious about tackling the market, they may be ready to move and use their connections and expertise to build a new business stream.

2) The Perceived Competitor’s solution may compete with one of your products, but they have room for your other products and would appreciate the opportunity to sell more to the same or related markets.

3) The Perceived Competing System Integrator is focussed on making money not developing solutions, so if you present them with a bigger and better opportunity within their local markets and demonstrate the commitment to supporting them, they may be interested.

4) The Perceived Competitor doesn’t have a product at all, but technologies and capabilities. They may even be only communicating their interest to move into this market but haven’t established themselves yet. If you can present them with a strong solution, committed support, faster deal turnaround, better margins and happier customers, then they may be interested.

OK, maybe they are competitors, but they will be very quick to tell you this, once you get them on the phone. So be ready, but don’t give in too easy.

Maybe their first impression of you is that you are a direct competitor but any of the above may apply. Seek out the opportunity to talk at length with them to learn about their market. If they compete, try to find out how important this sector is to them, if they have a specialist division within their company for this sector or whether they see it as a growing or stagnant market. Start with the soft questions and dig a little deeper each time. It’s just a conversation. Equally, be willing to open up a little to what your company is doing. If you compete, so what, just compare notes.

more on this later…DK

I’ve never been to a BizCamp but heard great things about how it works. Thanks for heads up Fran. I’m registered. http://www.bizcamp.ie

The event is on all day on Saturday, Sept 19th in the Guinness Storehouse, Dublin.

From the adhoc description of what I heard, it sounds like a free-for-all, speakers everywhere and people can go to what they want to hear.

They have a video of what happened last March - RTE News footage.
http://www.bizcamp.ie/2009/07/rte-coverage-of-the-last-bizcamp/

Where the industry can share experiences and help each other, it’s a worthy event for me.

With Ireland being such a small market, many start-up software companies start with internationalisation in their plans. Many make moves internationally too soon or with too little knowledge and experience of making their business a success in their initial markets. I’m not referring to any lack of business knowledge or experience of the management team, but to the fact that it takes time for businesses to learn what really works for the business.

Many successful international Irish CEOs would give some variations on this advice about going international:

1. Understand what it is to sell and deliver your offering in your initial market first before considering going international.
The challenges in doing business in a new market are sufficient enough without having to learn the basic lessons in how to communicate, sell, deliver and support your offerings as well. You need to be building on the strong track record of your initial market to be credible in your first internationally market. You should really know your Value Proposition for your target market.

2. The business should understand its key business processes.
I’m not talking about becoming over corporate or bureaucratic but simply that everyone in the business has the same understanding of how things are done. When it gets busy, does your business operate efficiently through a series of processes or does it over depend on too few people?

3. Do you really know your target international market?
Is the buyer’s ‘Customer Journey’ the same as in your initial market? Do buyers value the same things? Does the competitive landscape in this market negate your current Value Proposition? Do a ‘Value Map’ with the market’s buying criteria comparing you against your competitors for your specific target market. Validate your assessment with prospective clients in your new market, as market research.

4. Leverage of your existing customers successes.
Can some or one of your existing customers bring you into your target international market? Do they have a sister or associate company that they could refer you into? Gaining a reference customer in the market is great start.

5. Focus on getting your beach-head customer so limit the number of target customers to get started.
Don’t go chasing 20 prospective target customers to get started. It takes time to understand the needs of 20 companies and build relationships with the decision makers. It’s better to really focus on the ones that you know you can deliver real value to and make it easy for them to buy. Get a little business from them and then build on it. Meanwhile don’t lose focus on continuing to build success in your initial market.

6. A local presence in the market is not always necessary but helps.
It depends on your product or service on whether you need a local team to sell, deliver or support your offering. This could be achieved with local support partners who are also gaining business from the sale. There are many different types of partners that might suit; it depends on your business. The selection of the right type and best-fit partners is a key component of what Maidsfield offer in its services to Irish software companies.

7. Should you Sell Direct or through Partners?
Selling direct is faster, more expensive and of greater risk. Going through Partners is slower, much less expensive and much more cautious, as long as you pick the right partners to suit your business objectives. A hybrid model would be that you sell direct with the support of a local support partner. This way you get the local knowledge and maybe delivery and after sales support from the partner but you bring the domain expertise to close the sale. Maidsfield provide services in identifying and opening doors with the best-fit partners for your business.

There are many variations within the points above depending on your particular business but the principle are basically the same.

It would be interesting to hear stories of first-time internationalisation experience…..please share stories, questions or comments.

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