The Channel is a Chapter in the Book of Business Development
Jellyfish Head of Partnerships Billy Robins unpacks the nuance of BD
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A couple of months ago, we discussed how investing in partnerships is analogous to R&D; significant upfront expense for long-term value creation. This framing has driven the formidable partner ecosystems of Bill.com, Atlassian, Rippling, Hubspot and many an iconic company.
Today, we’re very fortunate to be able to dive deeper into the Business Development function with a guest post from Billy Robins, Head of Partnerships at Jellyfish (backed by Accel, Insight, Tiger), previously Head of Partnerships at Productboard (backed by Sequoia, Kleiner Perkins) and Director of Business Development at Zendesk.
Many thanks to Billy for his excellent, witty contribution to the discourse!
In a previous Missives post (“Investing in Partnerships: Distribution Capex”) I loved the framing of partnerships as R&D for the GTM function. This is such a sharp, succinct summary to convey the potential value that Business Development (BD) can create. For BD professionals, this framing is critical because most people don’t understand what Business Development does, the different roles required to succeed, or time lag to deliver meaningful results.
There is no one single flavor of BD and it’s highly dependent on your organisation’s growth phase. For most BD leaders, they face the “Two-Bobs” moment from “Office Space” at least once at every company where they work, since value created from BD is badly articulated and poorly understood.
The result? Most of my co-workers conflate BD and The Channel. Channel can be part of a BD motion, but I’d submit that BD can do a whole lot more. The BD function should help a company punch above its weight and explore non-linear paths to grow the business.
This is in contrast to a channel motion. The channel is specific and narrow, and goes deeper on an already existing motion. The Channel is a place that serves as a distribution point for your product where a third-party sells your offering. This means someone else collects funds on your behalf. Companies who haven’t “Crossed the Chasm” (see sidebar below) are not ready for a channel business. If your company competes in an emerging category, the channel won’t help because historically the Channel fulfils demand, it doesn’t create it for you.
Sidebar: “Crossing the Chasm” references the timeless 1992 classic of the same name by Geoffrey Moore about how the type of market you sell influences your product & GTM motions; as companies grow, they need to “cross the chasm,” which many fail to do successfully, for a more extensive discussion read here on Medium).
Several times in my career, I joined a company and as you are doing an opening tour of meet & greets, people will ask “What’s our Channel Strategy?”. They ask this not because they really understand the question, but they’ve been taught that BD = Partners = Channel. So they want to seem informed; and back to the Two Bobs, what the hell else could you really do anyway? You aren’t in Marketing, nor Product, nor Sales.
So, what does BD do? Short answer, it depends on the company stage and strategy. The BD team’s focus is derived from the company’s strategy.
In most organisations, BD is misunderstood because it’s more art than science. The less mature the company’s GTM motions, the more the BD team needs to improvise through experiments that can require a mix of product, marketing, sales and customer success. Sometimes that goes well, sometimes it’s an abject failure. In the worst case, functional leaders feel like the BD team is a distraction and a “tax” on their teams. This depends on how experienced and persuasive the BD leader is.
The younger the company, the more roles that BD has to fill. Going back to the original “R&D for GTM teams,” framing; the BD team is exploring non-linear growth opportunities, pursuing alternative paths to market and additional ways to create a long-term competitive advantage. Documenting and articulating the insights from the BD team’s experiments help to build consensus by “showing your work”. It also helps to balance the Art vs Science challenge around BD motions.
Building a robust BD motion takes time. There’s a question of “Partner-Market Fit” (similar to “Product Market Fit,” when a start-up finds a repeatable sales motion for a target buyer). Partner Market Fit applies to 3rd-party firms, aka “partners.” How do you find partners who complement your offering AND can make money by working with you?
At Productboard and Jellyfish, I joined right around Series C and helped to stand-up a BD function. In both instances, I had broad mandates to help cultivate partners who could amplify our brand, deliver customer value and help accelerate our growth. We recruited and nurtured a set of consulting partners to help increase our win rate in deals and compress time to value for our customers post-sale. We developed strong relationships with peer software companies to unlock GTM campaigns where we had an integration and recruited start-ups to build to Productboard’s APIs. Over time, these partners create a compounding effect of competitive advantage and a moat that keeps smaller competitors on the sidelines. This is all the more important, given the power laws that anoint winners in software.
One key take-away for me is to communicate (and even over communicate) about the strategy, activities, results and LEARNINGS. In many cases, these experiments can deliver learnings in a lighter resource and lower risk manner that does not distract the core GTM teams as opposed to spinning up a new sales team or a dedicated cross-functional team to pursue an unproven market opportunity.
5 Take Aways
Don’t conflate BD and “Channel” motions.
BD strategy derives from the company & is incredibly stage dependent.
Overcommunicate the plan + learnings to overcome confusion.
Articulate milestones of success
Prepare leadership that this is a 12-24 month journey for material results.
In closing, successful BD teams can add tremendous value with or without a channel motion. BD should be seen as R&D for the GTM function and with that comes a mixture of practical results (e.g. pipeline; closed revenue) and learnings about what works or what does not work as the company matures and diversifies its GTM motions and product strategy.
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