Realizing the Business Impact of Partnerships with Box

Please welcome Aaron Levie, Chief Executive Officer, co-founder, and chairman of Box, Karen Appleton Page, executive and investor, and Jason M. Lemkin, founder of Saastr. Can everybody hear me? We wanted to do— I wanted to mix a few things up. This year and had folks that worked together for a long time. Uh, we had Michael Pryor and Michael Cannon-Brookes from Atlassian earlier. That was pretty funny when you had a direct report interviewing his boss. Uh, and he said, "This is the exact opposite of a staff meeting. This one's pretty interesting." This one's even better. Uh, Karen and Aaron worked together for probably more than a better part of a decade, probably for a decade, right, or longer. Karen was a single-digit employee When it was Box.net, it was probably in some weird office in Palo Alto. Weird office in Palo Alto.

Part residential, part office thing. It's not clear why Karen joined us.

Not clear why you joined us. You convinced her to be the first experienced person probably to join the company at all. And then among other things, drove all the global partnerships for Box. And we wanted to use the session to talk about partnerships in general, but also maybe talking backstage about other early learnings from there. Aaron's gonna ask Karen some stuff. I'll jump in, and if we have time at the end, we will use— we haven't done this, so roll with us, but we'll use a hashtag #AskBox, because it doesn't look like it's been used since 2008. So #AskBox.

That's offensive.

If we have—

I just—

it wasn't part of the BoxWorks thing. Maybe it was— we were gonna have #AskKarenAndAaron, but I thought there was some chance people would mistype that on the Twitter. Right. So anyone do #AskBox, and we'll try to— try to get those toward the end.

So, and make sure to keep us on track, because I could go anywhere.

I will keep you— I will keep you a prompt.

—wandering into like politics for all I know. So— I need your help with that one. So maybe just to kick things off, and it's funny. So this is actually kind of interesting, because we haven't done a one-on-one in probably a year and a half or 2 years. Yeah, it's about that long. So we'll pick up some old habits on that. But maybe just to kick things off, so paint the picture. You joined— as employee, I think, 8, 7 or 8 at Box. Why in God's name would you join an 8-person startup that had no business model? And we were actually at the time focused on consumers. And so this was before we were in the enterprise. And I believe, if I'm not mistaken, you were consulting for PayPal or working on some projects there, or is that confidential? No. OK. So how did you decide to join Box? What was that experience? You were the first executive we brought on.

Yeah, no, I tried to go work for PayPal, and you said I couldn't. Right. And so then I was like, well, wait.

I was not familiar with employment law in '07, so I thought that I could just prevent you from doing that.

I did try to listen to my inner voice that was saying, this is crazy. Right. However, my inner voice was completely shut off and cut down by your louder indoor voice that And he said, no, you're not, Karen. You're going to join this company, and it's going to be great.

And how many conversations did it take just to help? We all think we have this superpower as founders that we can recruit anybody, right? All I just need to do is meet Karen, and she will definitely join my 6-person startup with that weird office I saw on TechCrunch. How many meetings does it take, and why? How did Aaron— what's the real trick?

Oh, well, we never really met in the office. The first time I went to the office, I was in a skirt. Shirt and heels as you would think that you might wear as a professional going into a meeting. And I opened the door and I had like, you know, 6 heads spin around and look at me like, what are you doing here? It was really funny. So that was our first meeting. But after that we met at Starbucks. That was our office out of an office. And we started talking about, you know, and it being a consumer business at the time, we started talking about how do you engage with other companies, other businesses so that you can grow. and extend the reach that you have, which was the foundation of why I started. Um, when I asked Aaron later though why he hired me, he told me he didn't think he had a choice either. So we're both kind of in this together. You told me that Josh referred me, therefore you had no choice. So we both— neither one of us thought we had any other choice but to do this job.

Do not listen to your VCs, right? Actually, it was, uh— Here it worked out though, right?

It was a very fortuitous intro. We actually didn't really know what we were looking for at the time, It was 7 or 8 people, and what we knew was we needed some experienced talent to come in and actually help us grow the business, find new growth vectors. I don't know, did we have even a role for business development? That was actually the first time.

That was what you told me. Now, whether or not that was just what you said at the moment because it made the most sense, who knows? Who knows? It was fascinating because at this point, it was April of '07. There was no such thing as cloud really, or not, it wasn't a term of art the way that it is today. It was Enterprise 2.0. And we actually were just beginning to think about what the business model ought to be and should we pivot. And we made that tough decision that summer. Right. Which was also the summer that Dylan decided to go back to school. Right. To get a degree. Right. 'Cause we thought every good CFO—

I didn't hear this story. I didn't actually know this. He went back to school to get a degree?

Yeah, so we only actually had 3 dropouts ultimately in the founding team. Dylan is— actually has an accredited degree, which is—

you have to have someone on the management team when you IPO that has that, from the founding team, that has one, right?

Ideally it's your CFO.

So yeah, we thought that was a good, a good choice. And, and it was also when the markets just started to crumble, and so we sort of scurried to figure out how we were gonna both, you know, do this pivot successfully, begin an enterprise business, and have enough capital to successfully engage the way that we needed to.

Yeah, the, um, I remember, uh, so, and we'll, we'll, we'll lead this into partnerships, but the, uh, so when, when Karen first joined, we were 100% focused on the consumer market and that was really the kind of founding story of Box. We were just trying to solve our own personal problems for file sharing collaboration. So, so Karen came on board and the, the original partnerships, you're gonna hear a name that you haven't heard in probably two decades. But one of our first partnerships was with RCA. They had a camera that we wanted to automatically back up into the cloud. And so that was literally one of our—

They were probably in the digital camera market at that point.

I don't even know if they were digital.

There was a digital camera market. There was no iPhone. So iPhone didn't exist yet.

So those are the kind of partnerships we were doing. And what we realized was there was going to be no business model in the consumer space for what we were doing. So we pivoted into the enterprise. And we must have had maybe 15 or 20 employees max at the point. And Karen and I were the two people that went out to go do fundraising. And it was incredibly difficult because we were fundraising in the midst of a pivot, which is absolutely the worst lesson that we could ever have is never fundraise while you don't actually know your future business model because it's just very unattractive to investors. So Kara and I, we just, it was great. We got just, we certainly built up a lot of tolerance for a high volume of rejections. So we, I remember we would just be like sitting in a car after VC pitches, just like crying about all the rejections we were getting. And then ultimately— Was it more than 30? Probably, you could round up to 30. Round up to 30. I think it was, it must've been at least 20, right?

At least, and dozens and dozens of meetings. And we would always end the day at McDonald's, always end the day at the drive-through at McDonald's. And that was just, I think, just to like—

Those pitches were brutal then if you have to go straight for the comfort food.

Brutal. I mean, that was just my diet also. I probably told you it was out of recovery, but that was just all I ate. Yeah.

So then we got lucky enough to meet Mamoon. Hamed, who is just an absolute believer and— Yep, he's the best of the best.

He's here this year.

Has he spoken yet, or is that tomorrow? That's a great question. The mobile app struggles to load. It should be built on the Box platform. So I will try to find out while we're here.

You should ask him why he invested in us. That would be good to get that story, because I don't know the answer. But basically, we got really lucky. He funded the company, and then— Then we fully pivoted to the enterprise. That was, I think, when we really started to hone and craft the role of partnerships in our strategy. You made me say no to a lot.

You want to just one quick learning on that? I know I want to talk about partners. I met Mamoon through you. I met Aaron. I was in Aaron's office right when he crossed 500 employees. We were talking about, "You got to meet this one VC, Mamoon Hamid, who is the best." I met him. I asked him. A bunch of reasons he invested, but one learning for founders is he believed in Aaron, he believed in the vision, and here's my meta-learning, he didn't have scar tissue. If you think back, so many folks thought, when was this, '07, '08? So many folks thought whatever we're calling cloud now was played out. All the vendors had done, the market was small, no one would really run their computer or something in the cloud. Everyone was like the world was going to be Exchange forever, and people thought it was dumb. Sometimes both executives and investors, you need folks that don't have that scar tissue, and you need both because you need experience, which we can chat about with partnerships, but you need a mix because that scar tissue just can weigh down innovation and it just hurts. All three of us have scar tissue, don't we? We probably wouldn't do things now that we should be doing. We didn't see Slack come out of nowhere and then boom, everyone's using Slack.

Actually, on that and leading into partners, I think that actually helped us in the strategy because we had the opportunity to sort of invent our partnership approach from scratch. So kind of kicking things off directly in the panel, I guess first question to Karen, I guess, would be, how did you think about driving partnerships at Box post the enterprise pivot? What was the role of partners? Why did we do it? What was it all about?

I mean, the first thing that we thought about was, how do we make ourselves look bigger? We were small. Proven ourselves in the market.

Box crushed this. If nothing else, Box crushed. So talk about this. We keep going, but talk about with partnerships. We stood up tall. Because this is A+.

Yeah, we did. We always looked like we were everywhere. And I think that for me, what that meant was personally, we had to create a really good, strong strategy. And the strategy was based on market penetration, how do we accelerate growth, and foundationally, How do you create credibility, awareness, with the expectation that that will lead to revenue? And sometimes we did deals just for the credibility or just for the awareness, and always we had to kind of figure out, you know, what was going to be our path to revenue on that. And that was the more disciplined sort of a piece of it. But we identified a strategy and we went after it.

How much do you think— I don't know if this could be broken up into percentage, but how much do you think we did for technology differentiation and integration to make our product better versus as a growth driver to be able to get either reseller channels or, or sort of distribution?

Right. Well, we, we clearly had an approach that, that was like, okay, so everybody's got, you know, these siloed applications and all of them needed some sort of a backend that would store people's information and data. And we used that as an approach that worked really well with, with NetSuite, for example, they had a, a, a pro— a piece of their product that was meant to store all this data. They weren't going to update it. They weren't investing in it. And we came in and we did a fantastic partnership with ZAC that kind of solved two business problems and gave us a new access to a channel. So that was certainly an integration that was based on technology.

Let's dig into that a little bit because I remember that even from the old days. We were on— we were an early NetSuite integration platform too, but you guys crushed it on that. Whether you did in the real world, you certainly did it at a perceptive level at all levels from the C-suite, from ZAC across. What was— What were the tricks here that you could share? What did NetSuite really need Box as an application that bad in 2008? I mean, of course it did, but you became their showpiece next generation partner, right? And it wasn't just that Aaron was the wonder CEO, it was much more than that. And what were the tricks? How did you make that happen?

I think one of the tricks was that we strongly invested in the people piece of it. So we made sure—

Yeah, people get this wrong, right?

Absolutely. I actually think it's wrong.

They sit in front of their computers, they do a little integration, and they wait for the customers to come through the API, right? Right.

But we made sure that our salespeople got together. We, we had, we have kind of an operational checklist of all the things to do. And it was attend each other's SKOs, make sure we were at each other's conferences and events, do thought leadership events together, bring the salespeople together, and then make sure that everybody knows exactly what to say, how to say it, and what to do when, you know, interest was sparked. And I think we did a really good job at that.

And on the sales side, you know, sometimes that revenue doesn't come the next week. How do you get them to do those SKOs and do, how do you get 'em to take it seriously versus, is when HP comes in as a flagship customer for Box, how do you do that?

Well, the thing I would say is, back to the point previously, is this is why you fundamentally need a Karen within your organization. You have to. You have to. My preferred approach would just be, don't talk to anybody. APIs are there. Just watch the calls come in. The technology just works, and just integrate these things. And the reality is, though, each of our organizations have a tremendous amount of change management. We have a tremendous amount of inertia. We have a tremendous amount of, of work to do within the field organizations, within the sales organizations. So unless you dedicate the time, resources, people, and energy to making these partnerships work, they're, they just won't work. Now, if you're a developer platform, so we have Intercom behind us, then, then it's fine. Then, then just plug in the API into my application and, and everything will be fine. For deep partnerships, if you don't invest in the people component, then there's no way you're gonna see a successful outcome. And so having people like Karen, but then ultimately the team that she built under her, that was what fundamentally drove our success. So I don't know if you wanna talk about like what we did early on to be able to drive that, but that's like, the technology was probably 1/10 of what you had to do to get it right.

[Speaker] Well, I think just to add on before I answer your question, it was critically important for us that we had senior relationships at all of these people, at all these companies. Multiple levels. Multiple levels. Like Zach and I were, you know, we were buddies and, you know, and I built great relationships with all of the senior executives that were running things and then made sure that all the salespeople knew each other and all that kind of stuff. So fundamentally it was about making sure we were connected at the execution level and at the decision-making level. So that was super, super important. And then in terms of building the team, Certainly, everybody knows you gotta hire the best people you can find, but we broke our business development team into two parts. We had the hunters and we had the farmers. And the expertise here was all about how do you nurture those relationships and make sure everything from the content and the product and that we had all of the right folks doing the right things. And that was critically important. And that's an incredibly different skillset from the folks that are going out and hunting —finding a partner.

Let's dig in on that, because it's not as obvious as it sounds. When you did the NetSuite deal, or pick another deal, was Box under 100 employees back then? Probably 100 to 200 employees. But 100 is not a lot. You can't afford to have 20 people on the BD team. What do hunters and farmers really mean when you're trying to add $10 million, $20 million AR the next year? What does that even mean? We get what hunters and farmers sort of mean in sales, but what does that really mean?

Oh, that's a great question in terms of the size and how you divide the resources. We had just had a lot of people a lot of things. We tried to make it as templated as possible so that with every partnership that came over, that jumped over the fence from the hunting side, I mean, from the farm, the hunting side to the farming side, we had an operational checklist. You know, here are the 10 things that we need to do with every single partner. And we also had tiers of partnerships so that we knew that, you know, type 1 partnerships got these 10 things and type 3 partnerships just got, you know, maybe a tweet or a blog post or something like that. But we had to be really clear. And I think that it just comes right back to the point of you have to be clear on the strategy you're executing against to make sure that you're managing those resources.

Yeah, I think Erin asked, I think this is a good reminder for me. I think doing these sorts of deals, if you don't have Karen, is impossible. Yep. If CEOs, even if we like to sit in front of a computer, CEOs have a little bit of a superpower in that CEOs will meet with CEOs. If you wanna hustle and Zach Nelson is interested in what you're doing, you can probably get that first meeting and you may even get the second one, but you will never be able to penetrate the organization without a leader to own it. It's impossible. As CEOs, we make these mistakes. We build the relationships and then we lose the energy because we can't be the project manager of it. That's for sure.

This is why I think that partnerships generally have a mixed rap within Silicon Valley and beyond, which is that you see a lot of announcements that then fizzle pretty quickly. It's because it's really easy to do a press release. It's really easy to do the technology integration. Not really easy, but resources kind of dependent. The integration, it's really, really hard day in and day out in the hundreds of sellers or tens of sellers you have in the field and across your two or multiple organizations every single day to show up in front of the customer and be presenting your solutions in an integrated way for that customer over and over again. That's the really hard part, 'cause that's people, that's change, that's evolving your culture, that's getting people to recognize that we're gonna be better at selling our software when We have partnerships, and we have other people that are working on our behalf, and we're working on their behalf. And so that's the part that takes a really, really long time, and that's the part that requires a lot of change. I think the thing that strikes me right now in particular in this category, in this market, is we collectively as an industry have made it really hard for our customers because of a lack of deep partnerships and deep integration. We're one of the only industries where you sort of take all of this technology and you throw it at your customer and you say, "Okay, you get to now be the system integrator of all of these solutions and all of this technology." That would be like buying a car with all the parts coming separately and the customer, and me as the consumer, I have to now go put the car together. That's what we're doing as a software industry. We think that partnerships are fundamental if we're going to actually be able to drive the transformation that's necessary within IT, which means that we collectively as an industry are going to have to find as many ways to be able to work together and present cohesive experiences in front of our customers, and that's going to be both technology as well as the people side.

That's interesting. Can we chat about that? I had stopped kind of going to CIO panels and sessions till recently, and then I did more, and a lot of things I learned getting re-engaged, but one is just so much CIO fatigue for multiple vendors. It's the flip side of what you're saying. No one wants a— great, I've got Okta or whatever. It's not enough. Like, forget about even security. I want— and so how do you leverage partners partnerships so that it feels like I have fewer vendors? Is it just getting on boxes, paper? Is it more than that? How can I take what Aaron's saying and make it easier for the enterprise buyer and the CIO?

Often the approach that we took was around that, was how do we create a suite of services? How do we partner with others that are in that ecosystem so that we help alleviate some of that, the burden of all of those integrations? It doesn't always work that way, but you can certainly try. I mean, Sometimes we were dragged into deals as a result of a super tiny small partner. In the case of a huge hospital system, they had decided to use a piece of software for security, and the only reason we were sort of brought in was because we had already had a deal with that.

[Speaker:JASON M. LEMKIN] Yeah, the integration.

[Speaker:KATIE KAAPCKE] Yeah, we had already had that integration. It was kind of backward because it was a teeny tiny little company, but hey, they brought us into a great deal. And I think that created some opportunities for us. We also certainly tried to— to do deals like, for example, with carriers where they were all, they already owned the customer. So reaching with, you know, reaching a partnership with an AT&T or a Deutsche Telekom, we gave us access to a huge array of SMB customers. And then they, we would let the partner help us construct the suite of services that they had on, you know, on their list of companies that they were working with. And, you know, the only challenges around those sort of things is making sure that when, when you're engaging an army of sellers, that those sellers understand the pros and cons, benefits of your product. Otherwise the engagement isn't gonna occur and you're just gonna churn. So you have to be thinking it through not only from the perspective of engaging or creating a suite of services, but also in how do you create adoption that sticks.

Well, let me just ask a question then let me let Aaron drive it. But related to that, if you work with someone like a carrier back in the day or huge companies today and driving that alignment, How do you learn what their financial incentive is? We like to think we can spiff their reps, but that never really works, does it? I mean, it works once in a while, but even if you can't, even if you're allowed to spiff their reps and take them to the ballgames, it's never really their core goal for quota, right? This is something we read on the internet, to spiff their reps. How do you align their goals with your organization?

Well, this is where, you know, the rubber hits the road. You know, the minute the ink is on the paper is the minute that you flip over to the launch phase of the deal. That's where the KPIs are agreed upon, the business plan is more formalized, and all of those types of pipeline calls and quarterly business and agreeing on what the numbers are. That's when that happens. One time I did a deal with a big SI, and after the deal was signed, the person they assigned to the deal was a program manager. Which is wonderful. All the kind of shit is gonna get done, but you don't have somebody who is strategic and senior enough to make sure that all of the pieces of the puzzle are gonna come together. And so that's the first thing you have to make sure you got the right people playing on your team in order to make those two sides of the story come together. But if you have agreed upon KPIs and business and dollars that you wanna try to achieve, and you're gonna get together on a weekly basis and figure out if you're on track or not on track and what you're gonna do if you're not, you got a lot, lot larger chance of hitting a successful deal.

And, and I think the, um, the, the, so you have a massive amount of oper— operationalization to be able to make this work. And, and Spiffs is, is one one-hundredth of the things that are necessary.

One one-hundredth, right?

Yeah. But, but ultimately the great thing about, about whether it's partnerships or just even building product in general is it always comes down to the customer. And so, Nobody is going to sell your software if it doesn't make the customer have a better experience or make their sales process easier. So what we basically discovered is the partnerships that worked were the ones where the seller on the other side had a better experience being able to work with their customers. They were able to have a more seamless process selling their solution, and the customer was getting more value because of that partnership. And if that didn't happen, there's no amount of artificial incentives and ways of sort of forcing it through the system, that at least would work on a sustainable basis. You might be able to get a small pop, but if the customer value proposition is not stronger because of your two solutions or multiple solutions working together, the customer doesn't care, which means that no spiff in the world is gonna be able to solve the problem. And that's, I think, when we look back at, like, the impactful partnerships are the ones where our partner was able to deliver more value for their customer, and it wasn't just a distribution channel. It wasn't just being able to get more feet on the ground trying to sell our solutions, it was actually delivering a better experience to customers. And the challenge is, you can't always know in advance going in on the partnership which ones are actually gonna click and which ones aren't. And so—

Especially the big companies. Especially the big— You gotta lean in early with the big ones, right?

Especially the big ones, and they're constantly reorging, and one day you do a partnership with one team, and then all of a sudden, 3 weeks later, you find out that—

A new team. Every year it's a new team, every company. Every year would be great.

What about every 3 months? So like, this is the kind of, these are the kind of things that you're just dealing with constantly on the partnership side, but you stick with it because the opportunity is so profound if you can get it right.

That's a good, another reason you need to find your Karen is because of this turnover. You think it's a startup, you think startups turnover? I'm looking at this team that was together for 10 years, but at your partners, you've probably seen 10 VP, probably not CEO, but 10 VPs at these levels, and the turnover at big companies is, It's exhausting. If you don't have a manager, the CEO's relationship below the CEO, it's going to die during the calendar year, isn't it?

Absolutely.

Just to make it awkward for Karen, I'll just say a compliment. I think what makes Karen so unique, but also the job so unique, the kind of person you need, the persistence and the relentlessness that you need because it's hard enough to change your own organization, but now imagine trying to change other organizations. You have to be fighting that every single day and be willing to basically get rejected 90% of the time and be able to go, okay, only 80%. Okay. Sorry to, to round up. But the, but like, so the, the sheer persistence that you need to be able to have to be able to, to be fine every single time one of these changes happens is, is unbelievable. And that's why the, the role of business development and, and partnership is, is I think such a unique idiosyncratic role within a startup. It's, it's sort of like sales, but magnified. Because there's product components, there's technology components, you're dealing with a whole bunch of other constituents, and so you just have to be able to deal with all of the ups and downs on that.

Well, and that goes right back to the point of one of the most important things is making sure you have the right relationships at every part of the company, and I used to do this—

And you graph it out. You gotta graph it. Totally. This is what people don't do. This is when you see, you know someone's doing it, is you walk in and there's a chart, often on pen and paper, pasted the wall and it's some matrix and every person at that partner is on that. You've got to do some version of that to win, don't you?

Absolutely. Yeah. And I was—

And then liquid paper or put white strips over the quarterly changes on the chart.

But I was always the one at the conference who was waiting for the speaker to come off stage to be like, hey, you really need to know more about what we're doing right now. We should talk. And they'd be like, oh my God.

Oh, well, let's chat about that. That works? That worked? Sure. Oh, yeah. Well, it was a start. It's not something most people would think to do, that you could have your head of partnerships jump at a conference and ambush Zach Nelson or Mark Benioff and talk to them about the Box platform. But if you don't try, it's not going to happen, right?

How else are you going to meet them? I mean, you have to figure out. And I would definitely scan. Where are they going to be? And how can I not awkwardly or weirdly try to find them?

I certainly don't need to. Well, awkward and weird are different. I think awkward's OK. You just have to be careful not to cross the line to go weird.

I think any of our jobs looks a lot less elegant and glamorous when you actually like reveal what we actually do day in and day out.

Right, but we had a great approach around that. I mean, I think we did a lot of dividing and conquering. We used a lot of our networks to do so. Andreessen was one of our investors, and they often had—

They were great at that. That was the real way they could help enterprise companies.

Right, and then you just follow up like crazy. Crazy and make sure that you're, you're doing so in a way that is, uh, relaying the value proposition and the reason for either buying the product or partnering to extend.

Can we dig into something that Erin, get your thoughts, Karen, into something that Erin said about, 'cause I've experienced, and it's great for founders, that little partner that actually delivers a lot of business, right? You're probably gonna sign the deal with HP or Salesforce, even if you're not sure the revenue's gonna, you gotta, you gotta do that deal. but then even when you get— then this little vendor you never heard of in healthcare or something, 4 guys or people in Idaho bring you a big deal. Uh, for folks that want to be that Idaho thing, how do you leverage that? Like, you gotta bring them one. You can't get Box's attention if you're 4 people today without bringing a customer. But how do you get them to believe that one's 100? Or who did you see? Who did you— what did you see where you would lean in and help someone that didn't deliver 100 customers? What's the secret there?

Do you remember Xtra?

No, no, not that one.

No, no, that was kind of funny though. Oh gosh.

Well, you can generalize the tips if there's some sensitive stories. Yeah, no, no, no.

I don't know that we— I mean, we always try to get the big customers.

But did you have any small partners that brought you the big deals?

Maybe the thing I would at least kick off is, is so part—

Oh, well, the one that I was mentioning, this little security company that brought us a huge hospital.

I think the thing is, as a partner, and we have to do this when we go partner out, and so thus vice versa, if you're a partner trying to partner with us, you have to do the same thing. You have to deeply understand what's the strategy of the company you're partnering with, and what is the sort of wedge, what is the area that that partner uniquely needs your solution for. And if that doesn't exist, or if it's overlapping too much, or it's just gonna create complication for the customer, then there's no partnership to be had. But by finding the sort of complementary areas where two solutions truly does begin to impact the customer in a very different way, that's what we've found to always work. And so when we look at it, maybe a company that might be smaller than us, it's not necessarily do they have a distribution channel, or do they have lots of customers, customers, it is, are they doing something incredibly unique that is going to offer a lot of value to our customers that is not in a space that we would expect to get into? And it's really important for the partner to understand those things going into the conversation. And so the worst pitches that we will get and the worst pitches that we will do are the ones that just make no sense. It's just like, hey, please distribute us because we need growth. Nobody cares about your problems. So all we care about is our strategy and the cust— what the customer's trying to do. And when that can align, then, then there's a way to make it work. Right.

And, and that's why we built a, the platform that had the APIs that everybody could connect into. And so we became less of a decision maker or a, you know, a gatekeeper, but we let other people build on the platform so that they could do with the, the product and the service what they wanted to do for their business. And we, we just weren't as active in those.

Did you ever think about, um, sort of what you might call pre- and post-sale partners, folks that bring you into the deals, folks that don't help you at all with the customer, but make Box better after the deal, but don't help the sales rep or the sales team one iota. Do you, did you think about, do you distinguish those and how do you manage them internally? How do you get people focused? They have different values, different stakeholders, don't they?

Right. I mean, when I think about that, you know, I, I think about some of the, the large deals that we did, um, that really were kind of on the marketing side. They helped us with exposure. They helped us with credibility and awareness. But they were less designed to, in some cases, like the 50-gig deal that we did for the very first time, was really more about getting end users on the platform and creating awareness so that businesses would know that we existed. That was the big play. [SPEAKING CHINESE] And it didn't necessarily have the dollar amount that we had any— We didn't have any intentions of getting huge money out of them, but we did them anyway because they were so critical to things that we just didn't have the reach to do at that point.

[Speaker:JASON M. LEMKIN] Yeah.

I think it was probably— I look back and I don't think we ever made that distinction, although it probably ultimately things went into those buckets after the partnership launch where some just didn't help us in a presales process, but were incredibly important in terms of the customer's experience with our technology. And then some, like we did a partnership with AT&T where honestly, I, you, you may have had a, a way bigger vision around it, but to me it was just like, ah, this could be cool. Like we'll, we'll be partnering with a, with a carrier, we'll see what happens. And it ended up being one of our strongest partnerships because it turned out that, that if you are selling mobility solutions to enterprises and you work at AT&T, you need killer apps to go along with your mobility solutions. Right. And in our product case, we happen to be a killer app for, for moving lots and lots of bits of information onto mobile devices. And so for a seller within the AT&T world, we ended up being very valuable to them to be able to go show more value to their customers. I didn't necessarily think all that through when we were doing the partnership, but it ended up being an incredibly powerful driver. So, so, you know, one of the biggest lessons that I think we learned is you have to find partners that have the same sort of macro tailwinds as the ones that you're trying to ride on top of. And so, and like, and so if there's not like a big macro movement that, that that is sort of propelling you, that also the partner shares, then there's just too much friction. And so to be able to align to this, so if you're a data analytics company, then obviously you should be probably partnering with other solutions that would naturally grow in a big data and analytics world, as an example. And so by making sure that you are, the same frictions that you're gonna deal with, your partners are dealing with. And so you wanna make sure that you have as much of the tailwind behind you as possible with those partnerships.

And I think that as we matured, as we started to think about going public, and to the point where we were public, one of the areas that I worked on was the industry team. And one of the important things about that was being able to speak the language of your customers by industry. And when we did those, we started thinking about partnerships again in a different way. We wanted to put Box in with particular companies that worked in a particular industry. So we were going kind of back down to smaller companies to do these deals. And we would put together, you know, kind of the idea of a group of companies that would benefit a retailer or a hospital or financial services. And then we would take them to market via our sales organization, which of course required the proper communication and alignment through a prop— you know, we needed product and everybody else involved. And then we would also take that out through our other channel partners at that time, which included SIs and other carriers and IBM and other large businesses. So I think you kind of have to be nimble and be willing to move depending on the stage of the company and the goals of the— or the outcomes that you're looking for. Yeah.

You want to dig a little— I'll let Aaron guide it. But thinking back on time when you talked about looking big and going big, how— especially on the enterprise side of Voxeer back then, How did all these partnerships help you competitively? Because it certainly, as a box partner but also a student, it certainly gave a lot of gravitas. That's clear. But in the real world, how much did that help? And how defend— it almost felt like it created a mini moat. I mean, it's not a perfect moat. It is a competitive space. But it felt like in the enterprise, it created at least a shallow moat that was hard for other people to cross.

I'll set up the sort of core philosophical context, and then I'd be curious to hear Karen on the, on the actually how we went about doing it, but the, from a pure philosophy standpoint, we kind of determined that, that we are either going to win or lose based on the power of being a neutral player in our market. Because if you wanted the full integrated sort of stack of services, then you could easily just go to Microsoft and they're gonna have everything that's integrated and it's all gonna work together. And so our only strategy was, was what is the power of having an open, neutral platform that works across all of the technology in your environment? So by definition, partnerships and our core strategy were one and the same. Like there was no, there was no doing Box without a core, a core partner ecosystem or application ecosystem. So, so that kind of meant that, that we actually had to do very deep partnerships in a broad way if we were going to be successful and if we were going to actually build out this value proposition in the enterprise. Then I think from there it was really just, "Okay, how do you go programmatize it, and what are the different types of partners that end up driving that versus being neutral to it?" I was also pretty well incented to go after particular deals.

You and I and anybody else on the various teams, we set it up. We knew exactly who we wanted to partner with. That wasn't left to chance. We didn't just sit back and wait for the phone to ring. We want— these are our 10 premier companies that we need. These are the channel partners that we want. And we executed relentlessly to get those. And that meant everything that we've said so far. How are we going to meet the right people? What might they want to do? What could we build? What could we— how far will we not go to do the things that we want to do? And that was really an important piece of it, is just we were relentless on that.

And when you want to be open, you have to be the most open. Open, right? You have to have everyone. How do you— I always stressed about this. When you've got Salesforce and then Oracle wants to be on your platform and you're open, but how do you be equal open with everybody when everyone isn't equal? They're not equal. I mean, if Marc Benioff wants your help, you kind of got to go up to his extra house on Nob Hill, the one that's just the office, and have the sit-down, don't you? But then when Larry Ellison— but he's retired, so how do you— but it is a little bit stressful, isn't it? Even if you're open, Uh, the partners do not have equal gravitas, do they? Any insights on how to manage that? You just smile and do your best. Carefully.

Yeah, carefully and do your best. And I think that there's—

Send a bigger plate of cookies or what's the answer?

There's some obligation for some transparency.

Like, you know, we didn't— Transparency helps, right? That's the key. Absolutely.

And when, when you can get the partner to understand your situation, yeah, then, then they, then they have enough empathy to know that, okay, like the value proposition that you have to your customer is as an open platform, which by definition means you probably also have to partner with our competitors. And, and then, and I think what we try to do is be upfront with, with partners, which is like, we'd love to do as much co-marketing, co-selling with you as possible. That's not gonna preclude us or prevent us from partnering with other companies that might be in your space. Yeah. Because fundamentally we can't go to customers and say we have preferential treatment from a technology standpoint of one vendor or another, or else our entire strategy gets blown up. Yeah. And so that might be awkward every time there's a big press release, but But that's just where Karen has to get on the phone and sort of, you know, send—

Do a little pre-brief. Right.

Yeah, do a little pre-brief and you give them a heads up and you say, "Hey, you're going to see this thing in the news." And— but we obviously are very committed to our partnership and we'd love to keep doing more. And that's just standard relationship management that I think you have to do in this space.

Sometimes it worked to our advantage because sometimes it helped the other partner see that, "Oh, gosh, you know, we got to work a little harder. We got to do a little more. What can we do?" And, you know, that led to some— sometimes some pretty cool outcomes as well.

I think you need your Karen, because the CEO, it's tough. It's tough when you get those CEO hand burns or whatever. You need someone to juggle that for you, don't you? Yeah. Did you take a bunch of those for Erin? Oh, God. Did you take a few hits from partners and allies?

Probably. And by design. I mean, maybe we weren't quite that smart in the beginning, but yeah. We didn't have, you know, if somebody wanted to deal with Aaron all the time, we had to change that up because we needed Aaron to be able to come in when we really needed him, you know, when there was a big problem or when, you know, when we were at an impasse. You know, you need to have somebody who can come in.

I think it's a little bit revisionist. You probably were shielding me so I didn't blow up the partnership. So I think I mostly probably complicated things as opposed to was valuable.

There are definitely—

At times I can recall you complicating things, yes. [Speaker:JASON M. LEMKIN] I may be misremembering some of my Box history, but I have studied it for a while. I think you went through an evolution of how to monetize the platform, right? And I think it probably took you close to a decade to directly monetize Box as a platform, right? But I bet you guys thought about it in 2008, right? So how do you think about when it's too early? When do you discourage development? But when do you actually have to make a few nickels off the— $300 million that have gone in probably to building Box.

I think for us, our struggle was basically we are deep believers in openness. And you should be able to use our APIs for literally anything that you want to be able to add value onto our product.

You don't want to charge initially for that, do you?

You don't want to charge. I still don't want to charge. And especially if it's your data, then you should be able to do whatever you want with it. At the same time, we started to see customers having use cases, in particular customers, so not ISVs, customers having use cases where we were really kind of being white labeled into another application, doing something completely different from standard integrations. And at that point it kind of crossed a threshold where we said, okay, maybe there's another business model here where we say the technology that we're using to deliver our core services to you as a customer, you can also leverage yourself. And we will just have a sort of AWS-like pricing model that's more resource-based. And that was a struggle because, because again, we were starting to charge for something that theoretically we could have made for free, but it was really delivering a completely different value proposition. And, and we had to kind of have that line of demarcation. And I think it was also difficult on the biz dev side because we had to decide like, okay, like how do you now treat partners in this category? Yeah. And, and how do we still have a really, really strong open platform in the process?

Somehow we blew through all of our 40 minutes. Uh, any last fun story from Karen you want to bring up from the partnership days or otherwise, or vice versa? Karen, you got a good story for Aaron that's appropriate for the stage? I'll let either of you go first for one last good story that at least superficially is related to the topic.

I think the one thing that we probably didn't talk enough about, or actually at all, but, uh, but is also, I think just like an elephant in the room on this is on the product side. This is really where it's difficult. Is prioritization and then creating the right kind of swim lanes for what a partner can work off of versus what you're going to build yourself. So there's a whole philosophical issue that you have to start to be very clear on, like around the principles of what are we going to build, what should a partner build, how much time should we be dedicating our resources into developing these partnerships? Because I think that the worst thing you can do is thrash your internal engineering and product management just based on all of the externalities. And this is something that we had to get really good at is making sure that this was a very finessed part of our product strategy.

Right, because my philosophy was say yes until you say no.

Build everything. Right. That's the tension. All right, let's thank Karen and Aaron for this session. It's terrific.