Latest 8 Factors From Your Ideal Business Partner For Your Tech Startup 2020
Getting the first partners for your Tech Vendor Startup is one of the hardest processes on the early steps. Tech vendors and especially Cyber Security vendors spend a big part of their budget trying to develop their channel partner market. You have to know the factors from your Ideal Business Partner in order to be sucessfull.
I will help you and I will guide you in order to create your ideal partner, on the first step. This process will save you time and money, so your chance to survive will be boosted.
I made a list of Top 8 features to look for to get your ideal.
So, What types of partners your startup need?
The partner is an innovator or early adopter with new brands.
It means, they work with other startups brands and you can check this very fast in their vendor portfolio.
For example, ImagenTI is a local Mexican Cyber Security Distributor. All the solutions they distribute are tech startups from Europe. If you would check the ImagenTI vendor portfolio of solutions, you will realize very fast they work only with tech startups.
The same concept is applied for VARs (Value Added Resellers).
The partner’s vendor portfolio has between 30% to 60% of vendor startup brands.
You may wonder why this percent? Let me explain to you the reasons:
- The business partners with a high percent of startups won’t have enough confidence from the group of buyers of “the early majority” of adopters (“The diffusion of Innovation at your tech startup“). It means they are not enough mature in the local market.
- Another reason is the branding. Working with well known brands and startups is giving a message to the customers on how this brand is “Trustable”. This is the same effect when you see a guru, famous person or Influencer, that he/she support a specific brand product.
- The business partners with a small percent of startups, don’t pay enough attention to tech vendor startups or they don’t invest time and money on you. They usually ask you money in advance in order to work with them.
What about if they are under or over this percent?
I have worked with VADs and VARs over or under this percent. This cooperation was also working. However, being at the early step of market development, you would need these features on your ideal business partners.
The partner works with complementary or alliance vendors.
Working with complementary solutions or they integrate technically with your solutions. In this way, they can do cross-selling much easier than in stand-alone.
Another example is Seclore, they are an EDRM (Enterprise Digital Right Management) Solution. A DLP (Data Leak Prevention) vendor solution such as Forcepoint integrates with them. So, Forcepoint partners active on the DLP side has a high percent to match for EDRM solutions.
Global distributors won’t be interested in your solution.
Global distributors such as Ingram Micro, G-Data, Exclusive Networks, Arrow, Westcom. They are not early adopters or innovative and they won’t be interested in you (tech startup vendor).
Once again, there is nothing personal against you or your startup, neither for your solution. They are corporate, they need to make sure to “make numbers” and they are on the right side of the curve of “The diffusion of Innovation at your tech startup”
Is there any exception for them?
Yes, there are some exceptions to have a global partnership agreement or have a big budget marketing budget plan.
In such a case, it is not worthy to focus on them or you should invest your budget in a different way.
Another exception is by “The Power of Personal Relationships“.
In such a case, they don’t ask you to have a huge investment. I know regional VADs that also invested a few times in new cybersecurity vendor startup. It was successful and they didn’t expect to have a huge investment from the vendor side.
However, these few cases are exceptions and not the standards.
Business partners who work with the same model solution.
This means if they are working only with SaaS or with only hardware.
I have identified how some customers are working with the same model of solutions. I mean, a customer working with SaaS yearly solutions, they are always working with vendors offering SaaS yearly solutions.
The same example comes with a customer having SaaS monthly solutions. It will be their preferred vendors or business partners following the same model.
The last example is with hardware solutions. I have also known customers against cloud solutions. They still feel better-having everything on-site by hardware. Now, coming back to the business partner, if they are offering only hardware solutions and you are a hardware vendor. Then the probability to be successful with this business partner and their customers is very high.
The VAD or VAR is focused only in one region or country.
Local VADs or local VARs are focused only in a region within a country or maximum in one country. This is exactly the opposite of point 4 of this chapter: Global distributors won’t be interested in your solution.
The best VADs that I have the pleasure to cooperate with, they are focused only in one country or even one specific region within the country. They know the “Power of Personal Relationships”, they know the importance to focus on a niche market and they are very aware of how the best marketing is having good references in a local area.
They have a good ratio of salespeople/vendors.
For example, 6 sales and 2 pre-sales for only 6 vendors, it is very good. In this way, they will really focus on you and it is the same concept with Regional VADs or VARs, they focus by geography area.
The same amount of sales and pre-sales, so 6 sales and 2 pre-sales for 20 vendors. Then the focus is much worse.
Or I even have experienced myself, 2 sales and 1 pre-sales for 20 vendors. You can imagine how much is the effort and time spent on each vendor.
The partner targets similar vertical customers or size customers.
Here it comes again about the importance to have a niche market. As I mentioned in the chapter 2: Not having a niche market from the Top 10 reasons why startups fail and how to avoid it. A niche market is a small or specialized market for a type of product or service: Sector, location, size of the company and finance sources.
For example, a network performance monitoring solution is very critical for Telco customers. Then, if you find a reseller working with Telco customers, your probability to be successful on the sales side will be very high.
Now, let’s imagine the opposite case, your reseller doesn’t have any niche market. He has customers in all the sectors, they are not related to each other. Then, it will be hard to develop the sales with this partner and in the case of success, it will be an isolated case.
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In Startups Tips we know and experience how much pain and cost means investing in the wrong strategies and people. – Javier Nieto León. Founder at Startupstips.com
I hope I helped you to choose the strategy in order to boost your channel partner ecosystem at your tech or cyber security startup.
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Javier Nieto León