Tai Rattigan, Global Head of Partnerships at Deel and Co-Founder at Partnership Leaders - The Magic of Partnering Well - The Michael Girdley Show Episode 46

Hey, Michael here. Welcome to the Girdley Show, uh, back for another episode. Uh, today's guest, uh, was me and my buddy Ty Radigan, uh, talking through two major topics of interest. Uh, number one was talking about how partnerships work, uh, which is something that's a total black box to me. And this is like companies partnering with other companies. Like, I've just never been able to do it or understand it, and he taught me a lot about it during this hour. And then the second thing we talked about was making money at paid communities. So he creates a paid community for partnership professionals that work at startups. And it was awesome to talk through how he got it started, how it works, and it turns out they're pretty darn good businesses. So I was inspired to go start one. So we'll see how that goes. But really enjoyed this episode, uh, spent a lot of good time with Ty, and I hope you enjoy it as much as I enjoyed making it. But first, here's a quick word from our sponsor for today's episode. Hey, Michael here. Uh, sponsor for today's show is actually, uh, a product that I'm a part of called DMBridge. Uh, and what DMBridge is, uh, is a service that we built, uh, to solve the problem that Twitter's direct messaging functionality is a total mess. So we built DMBridge to help you fix that. Um, a lot of the other solutions, uh, do things like requiring you to install a whole nother inbox. We didn't want another inbox. So we created DMBridge, and what it does is it takes all of your Twitter DMs and has them appear inside of your email inbox. So you can reply to them just like it's a regular email. You see them just like it's a regular email. You can search them later like it's one of your regular emails, all just by using DMBridge. So, uh, we're currently live with the product. Uh, would love for you to sign up and become a customer, uh, and check it out. So you can find that at dmbridge.app. and go on there, put in your name, uh, and be either part of the beta or join us as part of the live use of the product. And again, check it out, dmbridge.app. Ty, thanks for being here, man. I'm so excited to chat with you.

Thank you. Thanks for having me.

Cool. Well, I know you pretty well cuz we're on a board together and, uh, and also I'm a huge fan of your accent, so thank you for being both of those things to me. But, uh, a lot of my audience probably doesn't know about you or who you are, what you do, but it'd be great to give a concise version of your life story and kind of what you do today.

Awesome. Yeah, I mean, we are known for being loquacious in Britain, so concise isn't my middle name, but I'll do my very best. So, yeah, I mean, I grew up in the south of England, a place called Brighton. It's kind of like a hippie kind of party town. I was always very much into tech. My granddad was an electrical engineer and introduced me to all of that stuff, but there wasn't really much of a tech scene when I was growing up. Brighton, incidentally, now is called Silicon Beach and is like a real tech scene in the UK, but at the time wasn't. And so I spent my life online in online communities, online video game communities, but also just like interest groups, forums, like all of that kind of stuff. I was working in finance at American Express, which was an incredible place to do a rotational program and like really cut your teeth in the whole business world. And then through one of those online communities, I was able to find out about a company called Optimizely, which at the time was a young startup. I'd read about them in Wired magazine because there was this amazing story about them helping President Obama win his reelection, and I was very inspired. And so through this forum, I managed to get in contact with one of the people on the team and About 2 weeks later, I started there in Amsterdam as one of their first salespeople for the UK market and pretty quickly ended up identifying that in finance everyone does partnerships a lot and it's like how the whole thing runs. And in SaaS particularly, no one knew about that stuff yet. And so it's like, oh, there's probably a thing here. And so built a partnerships team at Optimizely, which ended up being about 40-45% of our total revenue and kind of went on that unicorn journey with them and then was fortunate enough to join Amplitude even earlier over in San Francisco as kind of around 40 employees and built out the partnerships team there as well. And that included a lot of international business for us. Spent a lot of time in APAC and with resellers as well and kind of went all the way through to pretty much the IPO there as well. And then since then, I've been kind of cutting my teeth in venture capital and then in a couple of different executive roles. And most recently, I joined Deal as the global head of partnerships. And today's day 3, so I'm really kind of drinking from the fire hose and learning at the moment. But throughout that whole thing, I also built a partnerships community and network off the back of that, which which kind of has like formed in lots of different ways throughout to like a thriving community today called Partnership Leaders, which really helps me in my day-to-day work as an exec in partnerships.

Yeah, dig it. Well, and so in the pre-show, I was talking a bit about how I feel like partnerships when I'm putting them together with individuals or other founders, like I feel like that's a superpower for me. But the idea of like company-to-company partnerships, like that's such like a huge black box to me. Like I can sell to a company, but like partnering to a company, like I can't remember the last time I ever did that successfully. So, so like consider yourself dealing with an idiot at this point on this topic. But like, so, so how do, how do you think about like sales versus partnership? Like how, what is your definition of the two different things there? Say if I'm one company that wants to partner with somebody else versus versus selling to them? Like, what is the core difference there?

It's funny because partnerships is really hard for a lot of different reasons, but I think the thing that makes it most hard is everyone is told to be customer-centric, right? And like, people kind of take that at root that, you know, it's us and the customer and we have to like solve all of the customer's problems. And so that like one-to-one perspective, which a lot of founders in companies have to have the blinkers on and really focus there. But it does mean a lot of the time that people kind of get myopic in their view of what the experience is for the customer and what the customer really needs. And so it's quite an abstract concept for most people that actually it's not just you and the customer. The customer has another 30 software products and, you know, they're trying to string that together along with working with a ton of other teams internally and a ton of consultants and service providers and all of these other things in order to get to their goals. Um, and so like the, the get— getting that mindset first of, okay, like solving this problem for the customer might not be all of the problems that the customer has. And like, hey, if we're orienting kind of a higher level, which is like, what, what's the overall challenge that the customer's facing? And what are all of those kind of sub-problems beneath it? And then, hey, if we can kind of park ourselves in the middle of that, whether it's our product that's solving all of them, or even just some of them, then like the value capture that we can have is much larger, you know. And that's like what a company like Salesforce or AWS, or, you know, even like Apple has figured out with their App Store as well. And so it's like a tricky thing because it kind of requires you to go against a lot of what founders and executives are told. And so that's kind of the starting point of partnerships. And then it's about mapping out, okay, so now we know what the bigger customer problem is. Like, where are the areas within that where we think we can either add value or capture value or, you know, like, find a strategic advantage so that we can either receive referrals from companies that are, like, sooner than us in the decision-making process, or, you know, be able to capture rev-share revenue with companies that are after us in the decision-making process. And, like, really, like, just make ourselves the center of that ecosystem and the brain of the whole, uh, like the whole workflow, really.

Yeah. So is the idea of selling solutions rather than— I mean, solution-based selling, where it's like, okay, a partnership happens where the customer has this context, right, and it's a little bit from our company and we're essential to that, and then there's these other partners that come in and deliver other components of that to provide a full solution. Is that, is that solution-based selling? Is that kind of what what you're talking about there?

So yeah, I think the best salespeople, you know, whether it's solution selling or value selling, uh, like I think they're kind of interchangeable. The best salespeople are able to, you know, uncover pain points, like figure out where priorities are and where the largest value is, and like drive a solution to that problem, and like with that capture a lot of value. And so the best salespeople are really good at working with partners Because, you know, the problems are almost always bigger than just like the solution that they have available to sell. And so, yeah, for sure, like once we have a partner in place or, you know, like a whole partner network in place, we always find that the best, like the most successful salespeople are also the ones that work best with our partners. You know, they're the ones that are able to go in and do the 7, 8-figure deals and the folks that are doing like the really transactional quick sales, you know, that you don't really need a partner in there because you're just focusing on like a quick transaction. Um, I think, you know, the level that you're operating at is much more at the like the owner, founder, investor level where like really what you're trying to figure out is more, you know, what would be a good partner for, for the business, you know, like what, and, and also like where to start, uh, because there's lots of different reasons why companies might invest in partnerships, like the coffee company. There's partnerships there with regards to logistics and someone could be a vendor of coffee beans or they could be a partner when you're reselling their products in the coffee shop in the future. And so there's a lot of different reasons, but generally what I've seen is the primary priorities that companies might have when they're thinking about partnerships is Number one, hey, like, we want to acquire more revenue, like, and ideally we want to open up new channels for revenue. And, you know, like, that might be new markets, that might be distribution partners, you know, who, like, large companies that just want to be able to send you requests for things that they don't do, you know, and their sales team are like, hey, great, like, people are asking me for this, I can just send it on to you, you're going to solve this customer's problem and I'm going to look great. And they don't even care about a rev share. Um, also it might be expanding your product offering. Like, you know, your customers are asking for this integration or they're asking for a piece of functionality and you don't want to buy a company and you don't want to build it, and so you can just work with another company to do it. Like, the, the really, like, the, um, you know, the black belt jiu-jitsu move is the companies that think about it in a way to own the ecosystem and like really be a category leader. Like, I, I have like a pretty firm belief that you don't become a category leader without owning the partner ecosystem. So if you think about like any best-in-class company, you know, anyone that's defined a category, you go and look and it's like, oh yeah, they've got— they just so happen to have 1,000 partners that are all like developing apps and, you know, building service companies off their business. And, you know, they're, you know, Microsoft generates $10 billion a year for their partner network. And so that Some of that could potentially be a maturity journey. I think almost everyone starts with, hey, we just want to acquire more revenue and find like new channels to grow the business and accelerate growth. But like the real mature level is that kind of category ownership.

Yeah. So when does it— I mean, and maybe there's no set answer, but when does it make sense for a company to start incorporating partnerships as part of strategy? Is there, or is there no real fixed time is when it makes sense?

It's a great question. I think like the, it definitely makes sense when you're either getting a bunch of organic interest and that might be partners coming to you and just saying, hey, you know, like I've got this customer and they're asking me questions about your product. Can I send them your way? You know, and that happens really often. Or the customer is saying, hey, like, how does, how does, how does your product work with X? Like, for us at Amplitude, there's a customer data platform called Segment and another one called mParticle. And very often people would implement their CDP and then they'd say, okay, like, I want an analytics solution. And Segment or mParticle would almost always have to send them to Amplitude because we were the best in the market. And so like, there was no way that we couldn't partner with them. They were— their customers were asking for it. They were sending them to us. We eventually, about 40 or 50% of our customers implemented our product through one of these CDPs. And so it was just like an organic, almost like forcing function for us to partner together. And so that, like, I often tell founders like, hey, you should— there should be a pull from the market in order to establish these types of partnerships. Uh, and that's like a really good indicator. The other really good indicator that I've seen is like quite often there's a big company, um, who effectively like doesn't want to do something in the space and they're just going to drag you along their partnership program. So like at Amplitude, again, we had it with AWS where AWS came to us. We were a tiny company that had no reason to be partnering with AWS and, uh, really they dragged us kicking and screaming through their partner program because they saw that this was an opportunity for them to round out some functionality that they didn't have in their product. And so whether it's like an organic pull from the market or there's like a pull from a strategic who's like really promising to drive a bunch of business for you if you kind of tick the boxes and it's not going to be a massive drag on resources, those are like often the times that I would say, hey, like there's a sniff here that there's a partnership program that needs to be built, or at least like a person that needs to be hired. Eventually there's a scale of growth for all companies. I don't know like what that level is where you're just not, you know, like you're not going to be able to hit the growth numbers you need unless you have an indirect channel. Like there's only so many, uh, ads you can place and, you know, there's only so many markets that you can open offices in scalably before you need to say, hey, like we're probably not going to open an office in Japan, but there is a big market for us and we're going to put a reseller out there. Or you know, in India or China or Russia or, you know, a bunch of markets potentially. And so like, that would be the kind of third indicator, but it's a really, that's a much more mature one, I would say.

Yeah. So, I mean, it, it seems like a space for companies where partnerships is very difficult to measure success in some situations. I mean, like with sales, it's pretty straightforward. Like, did you hit your quota or not? So like, what are the typical ways that people are generating like measurables for partnerships? Like if I manage a partnership, I'm a CEO and I have a partnership group, like how do I measure whether it's being successful or not?

Yeah, and unfortunately, like working in this industry, there's also like a lot of kind of snake oily stuff around business development and partnerships. And so a lot of people kind of avoid the metrics, you know, like like the smoke bomb on the ground, you know, and disappearing. Um, like, I have a really strong belief that, uh, the partnerships team should still be measured, you know, at the top level on revenue that's generated for the business, like net new revenue generated through partner channels. Um, so that's like sourced revenue from partners that's additive. Uh, I think that that's really important because, you know, it, it, it shows the value of the program. It also allows for budget allocation, um, and, and also like justifies growth, protects the team, like all of the stuff, you know, like it is, it's really important to start there. Like there's a bunch of health metrics that people that like, I think people kind of end up making primary KPIs, which is a mistake, uh, you know, like how much revenue do we generate together with partners. So whether the partner brought something to us or we brought them in, you know, like that's a really good health metric because we want to be bringing our partners into deals. Like Like, you know, in practice, a really good partner program is driving 10x the revenue that they generate for their own company for their partner ecosystem. So like, if, if Microsoft's doing a billion dollars a year, uh, in revenue from partners, they should be doing like $10 billion a year for their partners. Uh, and so like, that's a really good health metric, but you wouldn't like measure the primary KPI on how much business are we sending to partners or how much business are we doing with partners. Likewise, like, you know, it's really easy to get caught up in how many partners are we bringing on board, how many partners are activated, like a bunch of other metrics around there as well. Um, you know, over time there's a lot of interesting things that you can get into, like I mentioned, uh, because there's, there's just this immense scalability and profitability that comes with a really well-executed partner channel. You know, uh, the reality is if you have a reseller in a market and you have a really good margin structure set up, you know, the CAC on that deal is going to be incredible versus like a marketing and sales acquired, uh, lead. You might have one person in Japan deliver— like, this is, this is a real thing that we had at Amplitude, you know. We had one person in Japan generating more than $10 million a year, and that's like the quota of 10 AEs. And we'd have a marketing person on it, and we'd have a customer success person on like all of those deals. And instead, we just have one person generating this huge amount of revenue. We had that in many other markets. So it's this incredibly profitable, cash-efficient business once it's set up. And so there's other metrics you can look at around, like, okay, are we reducing our service costs by sending them to partners and our margin on that? Or are we reducing our cost to acquire customers? And a bunch of other things. But really, you just have to start at new sourced additive revenue for the business, and everything else is like a health metric off the back of that.

Yeah. So you talked about this idea that you, you as a company, when you start to partner with other people or other companies and partners, should generate 10 times— I think was the rough number you had— so every dollar of incremental revenue for you, your partners can generate 10 times that. Um, does that apply only to kind of software and recurring revenue, high-margin businesses, or is that like Like if I'm a, you know, an auto dealer partner, right, which is to some extent a partner and a channel for Toyota, like, is that, is that kind of a universal metric or is that just for tech that you're talking about?

Yeah, that's a great clarification. So yeah, in this case, I would say I know kind of the SaaS world, even like hardware and else, you know, isn't really my expertise. I know that there's a multiple there as well, but I don't know if it's 10x. Um, but that's like a good rule of thumb for the SaaS world.

Yeah. Well, I mean, if you're a, let's say you're a hardware VAR, a value-added reseller, um, typically you're just barely breaking even on reselling, you know, Cisco hardware or whatever, and you're making all your margin on selling services alongside that stuff. So I don't know how the revenue breaks down, but I've looked at some, some VAR and reseller kind of P&Ls lately, and they're not that good.

Yeah, yeah, service margins are tight. Is it like service industry? It's like a really tricky one in like VARs, uh, and again, I'm talking about tech in particular, but the like, those people businesses are tough, especially when you're comparing it to, um, like the margins in tech. Uh, I think that, you know, I, I would often see like when we would go out and do, you know, like a large 6 or 7 figure deal at Amplitude, like the kind of the transformation project might be like 8 figures, like sometimes 9 figures, you know, these huge, huge deals. Um, what the margin or the take-home that the service provider would take on that, I'm, uh, yeah, I wasn't sure and like varied a ton between companies.

Yeah, well, you'll see, you'll see like VARs who, let's say, do $50 million a year in top-line revenue. Um, that company's net profit for the year might be $3 million. 4 million maybe if it's good. Um, so, you know, the margins on reselling stuff, they are, are pretty thin. Um, the ones that I have seen that actually do incredibly well are ones that have figured out how to offshore the majority of their labor costs. So they still charge U.S. kind of consulting fees, but then when you look up, like, 90% of the people are in India or someplace in a lower-cost jurisdiction, and then you'll see those guys doing you know, having $20 million businesses that profit $5 million a year or $7 million a year, like a third the size and, and much more profitable, um, which is fine, but like, you know, it's hard work. It's not like, it's not like running a team in Delhi is that easy. Like, it's, it, you got, you got to work for your living there.

100%. I think, uh, you know, a mistake that a lot of VAs make is they end up taking on a lot of different tech and spreading themselves really thin and not really being that solution consultant to their customers and really just being a transactional pay-through partner. And so the trouble with that is you capture a lot less value. We worked with a lot of boutique resellers at Amplitude. Quite often these companies would start out maybe being 1 or 2 people. um, and, and then grow into much larger companies over time. And, you know, often their take rates on a deal might be like 15-20%, um, and so, you know, they're like at a minimum they're closing kind of, uh, $50K-$100K deals a pop, uh, and doing them like pretty quickly and taking 15-20% on all of those deals. Like I say, like, uh, our partner in Japan was doing more than $10 million a year and they're taking 20% on all of that. And they, they again, on their side, they like, that's just a salesperson that they have, you know, that's, uh, really. And so, and so they're like, they were able to like optimize around that pretty well, I think. But as soon as you introduce like another 100 tech providers into the market and then people like, uh, aren't as, um, specialized and aren't as efficient, the whole model really starts to break down. So it's a tricky thing to scale, like The— I, I've seen people that will either specialize around one technology and just be like, hey, we're the, we're the Australia team for this company. Or like, when people get it really good, what they do is they say, okay, this stack of tools. So like I mentioned Segment and then Particle, Amplitude. We also had an amazing partner called Braze that we worked with a lot that was like a marketing automation platform. And so like say, mParticle, Amplitude, Braze, and maybe like a marketing attribution product like AppsFlyer. You know, all of those products you could sell together in one stack to an enterprise company. And so that's like one, you know, like good size 7-figure deal that you can do, and it's one sale and you're getting 20% of that. And it like, it starts to look like quite a nice business if you keep it kind of small and specialized. And so we had some partners that did really, really well. But then likewise, when we went and spoke to VARs that had like 20 or 50 or 100 products that they were selling, number one, it's a tough business in general to justify them spending any time with us because the margins are so tight that people need to just be spending all their time selling. And then on the flip side of it, they're never going to be able to learn anything about our product or be able to really articulate the value of it. So the deals that we do get from a partner like that are our base minimum pricing, you know, like probably those customers aren't going to be set up for success. Like, so we would like filter out for those folks, uh, pretty early.

Super interesting. Yeah, and I was interested in your opinion on it because I've seen this design pattern where people seem to do really well at making money by identifying like an emerging platform, like deciding, okay, well look, Salesforce is becoming a juggernaut. And what's the problem with Salesforce? Well, it actually is really difficult to implement. Um, and one of my companies has gone through this with NetSuite right now. Like, we're on our third service provider. Like, I've seen that design pattern happen where people have built services business around that. I have a friend that does one specifically for Salesforce out of Dallas, and he's done really well, like, um, in terms of building a business around that. And then you see kind of another version of that where there's a bunch of people building in and around kind of the Shopify ecosystem that did really well before Shopify started to get terrible, um, recently. But just like, one of the things I'm curious your opinion on, like, okay, let's say you want to go repeat that design pattern and go make some money building a services business around one of these emerging platforms. Like, how would you, being on the entrepreneur side, look at and identify an opportunity early for something like that? Like, what— any, any signs or tips? Like, If I'm looking for that, how do I do it?

Yeah. So a friend of mine, Daniel Pearson, started this growth marketing agency called Bamboo and did exactly that with Facebook ads. Identified, hey, mobile trend is emerging right now. He'd already been buying ads as a professional already, but mobile is emerging. Social media is obviously something that's really important. Facebook's bringing out this ad platform, and just by the level of data and type of data that they're collecting, this is going to be a really effective way to get in contact with people. So I'm just going to specialize around that one thing and like really hit it. And Bamboo to this day is incredibly successful and, you know, like one of the best, if not the best, growth marketing agency on the planet, um, because they just zoom in and specialize on that stuff. I mean, they do Facebook, Instagram, TikTok, all of that good stuff these days. To your point, I mean, being really early is very helpful. Like, at Optimizely, we had a couple of very early partners that worked with us all the way through and were our most trusted partners, like, from the days where their team was bigger than our team and we were like this tiny little company and they seemed like they were big in comparison, all the way through to us being kind of a juggernaut and they're kind of still the same size. But Outside of identifying a trend early and picking a partner, I think is really important as well. Okay, we're saying data-driven sales and sales ops is a trend and CRM is going to be a really key tool within that. Am I going to say Salesforce is the winner in that market? And if so, I'm going to wrap myself around Salesforce. And so picking that, whether— and that's what people did with us at Amplitude as well. So people said, hey, event-based analytics versus page view analytics seems like the way that everything's going because everything seems to be turning into digital products. And we think that you're the best product in the market. And so we want to work with you specifically. And then once you've kind of identified a trend and you've identified who you think the winner is in that space and hey, you're, you're probably better at guessing what, who that is than me. Uh, you're a better investor than I am. Um, like, you know, then, then, then the next, uh, step in that journey is like really integrating yourself into that team. Like, the, the best partners that we had at Optimizely basically had a desk in our office, you know. Like, they would, they would come and sit in the office and do office hours and like just 'Hey, here's some feedback on the product. Here's like someone I know at this company, like here's this, here's that.' And like everyone on the sales team, customer success team felt super comfortable with them. They were there at lunch, they were there at all of our events and conferences. You know, it's just like they basically had a pass into the office. And so, you know, as we became a 100-person company, 500-person company, like everyone knew this team and it was really easy for us to say, Oh, you should speak to these folks, like, if you need help with this, if you need help with that, because you trust them. Like, you— it's basically like, for these service providers, like, the most important thing is like building trust and then being the easiest person to work with, you know. So like, just the reality is, like, we were talking about salespeople. Salespeople are very busy, and they're very busy with stuff that's not that, you know. And so like, if they can get that off of their plate as quickly as possible, they will. But they don't want to do it if it's going to jeopardize their deal, right? So if they can say, oh great, like, you're asking me a question, I don't have the answer to that question, but I can bring in someone who I really trust who's going to answer all of your questions and help me win my deal quickly— amazing. Uh, and so that's like a very simplified version of that. I've seen people run that playbook and build like really great digital agencies or, you know, services business around that.

Yeah, super interesting. So just to recap, in terms of making yourself a great partner for them or a go-to trusted person, so you get there early as a partner, that seems to help, right? Because they, they place value on that. There's delivering and kind of keeping your word and doing what you said, or you say you'll do. What other sort of things, you know, should a good partner partnering strategy like that be on the partner side, if that question makes sense?

Yeah, I mean, I think like we kind of talked about meeting the team, but, you know, the gatekeepers, like quite often people will spend a lot of time with the business development or the partnerships team. And the reality is that the partnerships team aren't the gatekeepers to the customers, right? They're the gatekeepers to the team that own the customers, which is the customer success team. And so like, rather than optimizing for getting the partnerships team to introduce you to customers, you need to optimize for getting the partnerships team to introduce you to the sales and the customer success teams, because they're the ones that are having all the conversations with the customers. And this is kind of missed a lot of the time. And so the, the partners that would do the best job would, you know, come in and they'd be like, hey, I want to run a session with your customer success team around like these primary challenges that big enterprise teams are facing at the moment and what our perspective is on it. You know, it's not like, hey, introduce me to Walmart, introduce me to Disney. It's like Disney, Walmart, HBO are experiencing these problems, your product solves this bit of it, and like together we can solve this huge big problem. You know, as soon as the sales team see all of the dollar signs on that, they get pretty excited. And then, you know, like, the reality is you have to build a, um, a reputation of wins. And, and, and we would talk about this on the partnerships team all the time. Like, we, we called them manufactured wins at Amplitude. And what that meant was like, what are, what are wins that we can force, you know, like, what that will seem like organic successes but that we can actually invent You know, so like an example would be that, you know, we, we had a new partner that we were working with, and we knew that if we could, uh, like get a big win with them early, like on a kind of an enterprise account, like it was gonna, um, like it would kind of cement their status as a good partner, and it would kind of get that ball rolling. And so like we would manufacture that win by, you know, going and finding a customer that we knew had a like a gap at the moment. And then, you know, going for and making sure that they like were also a customer of this other company, and then kind of bringing that thing together and like building the whole statement of work and the value prop and the whole thing. And like, you know, architecting this like organic, like, amazing thing that would happen. And then everyone would be like, oh wow, that works so well together, this is an amazing partner, like thank you so much. And then, and then it's like, oh yeah, okay, so we've got a win. And then like once you get like a couple of these manufactured wins, then they— you just start getting wins. Like, it's— you have a snowball effect and people just like— it's like a positive feedback loop where more and more of them happen. Um, likewise, you know, you have to really like— you have to find the AEs that are partner-friendly and like have them celebrate the wins publicly. And, you know, like by celebrating them and celebrating the fact that they're celebrating the wins, you kind of create this like positive viral feedback loop within the company as well. and it kind of feeds itself. And so as much as the partner can kind of like help with that rather than the partnerships team having to kind of pull all of those people together, like the more likely that they're going to be to be successful internally at those companies.

Yeah, totally dig it. So how, if I'm a partner for one of these companies, how do I keep them from screwing me? Like what, what sort of thing should I make sure I don't leave myself vulnerable to? Because I mean, I think the classic example is like the way Amazon treats all of its like seller partners, right? Just constantly chipping away at their margins all the time till they're just barely, you know, getting by. So like, if I'm a, if I'm a vendor partnering with somebody, like, how do I keep myself from getting screwed over?

Yeah, and that stuff sucks, to be honest. Uh, you know, uh, It's also like the partnership team's worst nightmare when those things happen. But I've gone through it where we've decided to offer professional services that are competitive to some of our partners, or we've decided to build products that are competitive with our partners. Amplitude now has a CDP, so they have a competitive product to Segment and Particle, who at one point were our best partners. You know, they built an A/B testing product which makes them competitive with Optimizely and Split and like these other great products as well. And so it really sucks for the partnerships team when that happens. I think there's, there's a couple of things, uh, like when you're a, when you're a tech vendor, it's just really difficult and you have to have like a good open dialogue with your partners and just like get to a point of trust where at the very least they're going to give you a heads up way in advance. That you need to kind of cool off or even cut ties and just decide, hey, like, we're going to go our separate ways on this stuff and be like friends and also know that we're going to compete and that all boats rise. Um, you know, I think for service partners it's a little bit different, right? Because you do have the ability to be a little bit more agile and you kind of— you're on the cutting edge. Like, what I've found with working in software companies is, again, because they're so myopically focused on their relationship with the customer rather than the broader customer problems and workflows, there's just so much that they're missing that a service partner sees every day because they're focused on the overall problem. Because if there's anything else they can solve for a customer, they're going to hire a person and they're going to staff it and they're going to solve it. Um, and so like with service partners, it's just so incredibly important to be ahead of the curve and to be, uh, like building new services and filling out other areas of the, like, the problem that the platform isn't building. You know, like we talked about Bamboo with, uh, Facebook. Like since the inception of that Facebook Ads product, like it has evolved significantly. Same with the Google Ads product where like day one you had to have an agency working with that product, or like an absolute expert. You know, it was like, uh, algo trading in the early days with, uh, Google Ads. And today it's like all AI machine learning type functionalities. Like, anyone can jump in and use the Google Ads product, and you just say, here's how much I want to spend, here's who I want to acquire. And so like the agencies now are building a lot of the creative. So they're doing the graphic design, they're doing the strategy. It's like, okay, how does this play on other platforms that don't have this type of functionality already? And they're evolving there. And the really smart ones and seeing what's coming out of OpenAI and with GPT-3 and DALL·E and these other products and saying, hey, there's AI content generation and there's AI graphic design that's coming out of these like, providers that's probably going to be factored into these platforms in the future. Like, what's the next thing that we need to be doing? Because, like, if, if people are doing that on Twitter, then, you know, at some point Google's going to have it in their products, or Facebook's going to have it in their products. And so, like, just staying, like, really, really being a visionary in, in the sense that, hey, you're a visionary to identify this trend initially and, like, partner with this company early. And, like, that never changes. You have to be a visionary and, like, be early on stuff constantly. Constantly all the time in order to survive as a, at least as a top service provider, I think. Or you attach yourself to a company that's like, you know, giant and not doing, not shipping fast and not innovating the product. But, uh, yeah, it doesn't sound as exciting.

Well, I think the people doing, you know, implementations for SAP and stuff like that, they're still printing money and they will be for the foreseeable future. Just like the guys, uh, who are able to come in and do services around mainframes and stuff. Like, I think one of the One of the kind of legends around San Antonio here is USAA still runs a ton of their business on mainframes. Like, yeah, perfectly good COBOL code from like 40 years ago still runs a ton of their business. I don't know if it's true. It's what I've been told. I've also been told they had 400 COBOL programmers retiring in the next decade, so they have like a big problem.

Um, yeah, they're, they're like in very high demand. Uh, fun fact, like when I worked at American Express back in the day, we used all mainframe systems. And I remember thinking it was just mind-blowing that we basically had customer support reps that were coding. They were writing code and it wouldn't have been a far reach for them to pick up a lot of that other code. And it was amazing how well people were doing with it. But I remember on my first day, there was a woman that I was sat next to and she was kind of showing me the ropes with how to use the systems. And she got out this booklet and firstly it's like this huge paper booklet and she showed me the date on it and it was printed before I was born. And she was like, here's the guide to the mainframe system we use. And even after I was there for 5 years and even after I left, there was ways to get into the backend system and most people preferred the mainframe system over the UI because it was way faster. And you know, they knew how to cut. It was, it's like if you gave a developer, you know, like Webflow or something and was like, oh yeah, like, you know, drag and drop this thing. And they're like, oh yeah, but I just want to do this, you know. And that was like what we saw a bunch as well. So I wouldn't be surprised if there's a ton of people still using those at Amex.

It's, I believe it. I believe it. Um, cool. Well, I'm switching gears a little bit. I want to dig into your business. Um, that is taking all this partnerships knowledge that you have and turning it into the Partnership Leaders community. Because I've talked to different folks about kind of this community running, running a curated community business. And it's super fascinating to me. And I know when you were down here in San Antonio, I like interrogated you about it, but I have more questions. But maybe first, like, could you tell me what Partnership Leaders is as, as a thing?

Yeah, yeah, yeah, for sure. So I mean, at its base, working in partnerships is really hard, like for all of the reasons that we've talked about already today. It's one of the only functions in go-to-market where you're having to justify your existence all the time. It's like marketing, sales, customer success, everyone knows you need those. And everyone's like, do we need the partnerships team? What do they really do? And so it's a stress. And after building the Optimizely team, I thought that it was going to be way easier joining Amplitude. Like, okay, I've gone through this thing, we built it like an industry-defining program, and then I joined Amplitude and I was like, oh, it's just as hard again, and I'm having to redo all of the exact same things in a slightly different way, and there was no playbook. And so like a friend of mine that we'd worked— that I'd worked together at Optimizely was going through the same things. He joined this company called FullStory, so we were kind of sharing ideas back and forth. And then there was a handful of other people that were also kind of sharing ideas. And we got to a point where we're like, hey, this is all really hard. Why don't we all get together in a Slack group is what we decided and get these conversations going so we could share. And that grew to 100 people. And then we felt like, hey, if we get all of these people together and we have all of this knowledge, maybe we have an opportunity to make it less hard for people. And so kind of talk to everyone and said, would you be willing to pay a membership fee for us to be able to take those funds and do thought leadership and bring in more people into the community? Educate other roles in go-to-market and executive leadership about why partnering is important and what the best ways to go about it are. People were pretty happy with it. Some people left the community and didn't end up paying. And we kind of went from at one point 700 free members all the way down to 100 paid members. Today we're over 900 paid members, almost 1,000 paid people all across SaaS and tech partnerships and go-to-market, um, mainly still within a Slack channel. But we have a big conference coming up in Miami in August. Uh, we also do like a bunch of in-person meetups. We do a lot of virtual events as well, all based around like, let's make running a partnerships organization a little bit less hard.

Yeah, dig it. So how much does it cost?

So it's the membership, $600 a year, so like $50 a month.

$50 a month. So, okay, so almost 1,000 members, so it does really well. And then, um, so then you're— you have the conference and then people pay to go to the conference as well?

That's right.

Or is that free with the membership?

Uh, that's paid as well, yeah.

Oh, they pay an additional fee for that?

Okay.

And then do you give them— do you give them a Lambo and a trip to Miami Beach with that, or do they have to pay extra for that as well?

Yeah, we just tied it in with the Bitcoin. No, yeah, no Lambos involved. The ticket includes a full day of training one day and then the keynotes and networking and everything else the second day. The thing that's amazing about these types of events is you can go and meet one person and that single partnership can be like a 7, 8-figure outcome for you that year, you know. And, and so like, uh, if you meet one person in the community or one person at one of these events, it's like potentially like a game-changing opportunity for the program. And that's like, that's not even the thing that we really sell. We're not like, hey, come here to network and like partner with people. We're like, come here to learn and figure out how you can grow your program and like accelerate your business. But like, if you Even just with those, it's amazing if you meet like one or two people that become partners, like, you know, it pays for your membership for the rest of your life, basically.

By the way, that is the pitch every business development person gives their CEO or manager when it's like, wait, why do you need to go to Vegas for this for a week? Like, what's going on? Like, that is, that is the pitch I've heard over and over again from every— oh, you never know, serendipity happens at the blackjack table. Uh, so, so for anybody listening that wants to get into partnerships, that is the speech you give your boss, which is like, well, you never know, you never know what could happen. Um, so, okay, and then, so to run the community, so you're producing content, you're, um, you're— what else are you guys doing? You're doing the events. What, what other things come into kind of the paid community, like, experience to produce the what it is for people.

Yeah, so there's a ton that we do. So, uh, we have like community management and engagement, um, and so that's like a real focus area for us, um, you know, uh, and we have like a dedicated person for that which is focused around like helping people ask questions. You know, sometimes people are a little bit nervous asking questions when there's, you know, almost 1,000 people on the other end of that question. So encouraging people to ask questions in the community, also making sure that they're getting asked answers answers from people that are really experienced around those questions. We do like one-to-one matchmaking based on people that have a certain area of expertise and like a certain opportunity of learning as well. And so we're really intentional about trying to help people solve problems. There's some things that we do that I think a lot of people don't do. So we have something called like the Ecosystem Catalog, which is a like a rated and ranked directory of all of the technology that exists in the partner tech space. And we like very carefully went through it all and, uh, you know, like figured out what was real and what wasn't and like put the best ones on there and have reviews and everything else, you know. Like, not to talk badly about them, but if you look at like the Forrester Wave, uh, partner tech, where it's like there's thousands of companies on there and there's like 40 in the ecosystem catalog, you know. So it's like we really, really handpicked like what was good and what was real and what wasn't. And so that's something that members get access to. Um, we run an investment syndicate. This is something that we're really passionate about. But like, you know, we really believe that there's a huge wave, uh, around partnerships. Like when I first joined, um, GGV and I was working with them, you know, uh, it was amazing to me that like so many founders had a partnerships hire as like maybe their fifth or go-to-market hire. When at Optimizely, like, no one had ever even heard of partnerships, you know. It's like Adobe launched their partner program the same year that I joined Optimizely and started ours. Um, and so like, it— there's this wave, uh, of, uh, like growth in partnerships. Like, even since we started Partnership Leaders, there was about 75,000 like exec-level partnerships people in tech when we started it, and now there's like 250,000. In the last 3 years. So there's this massive wave of growth of like indirect business. And like when that happened in digital marketing or when that happened in, you know, with CRM as well, there's big companies that are big winners and then like, you know, the founders make billions and the employees make millions and then the people that use the product and kind of champion it internally get promotions and that's awesome. you know, and it helps, it enriches their job or whatever. But I kind of felt like after working at a VC for a little while that there was a, there was a pretty good way for us to enable people that were users and really like the people driving this change in the market to participate in the upside of these, uh, technology companies as they start to do really well. Um, and so we built an investment syndicate called, uh, PLI, Partnership Leaders Investments, and we basically go out and, uh secure allocation in companies like tech, uh, partner tech companies that we think are going to do really well. And, you know, because we have a, uh, like such an awesome community that can add a lot of value to these companies, like we're able to secure allocation sometimes later on than normally like an angel check would do, or, you know, like on preferential terms as well. So we're able to get like really good deals for the members in the community, and we basically like source allocation in these amazing companies. We bring it back to the community and we say, hey, like, who's interested in angel investing, uh, in this deal? Like, often we'll get kind of 20 to 30 people participating in each deal. Maybe we write like a $250,000-$300,000 check in each company, um, and we get— we basically give people the opportunity to not only use the product, uh, but like, you know, kind of be on the advisory board, give feedback on the product, and also participate in the upside, uh, should it do really well. When, you know, the this trend, uh, like really kind of comes to fruition.

Yeah, dig it. So what do you think about partnerships as a space that made this model viable, right? I've seen some people able to build paid communities well, but it seems like with partnerships, like, it's hard, um, it's niche, it's valuable to companies, it's being done by companies. What, what else, as you reflect on why this paid community is working both as a community and a business, has made this possible? Like, and because I'm just trying to look at patterns, it's like, oh, if it worked with partnerships, like, where else can it work, uh, in terms of, in terms of things?

Well, I mean, to be honest, I don't think it's something that's, uh, specific to partnerships. You know, like, uh, Lenny Rachitsky is doing a fantastic job with his product community, both with the newsletter, uh, that he runs and now the Slack community as well. And he You know, he has like a very active job board and a bunch of other ways that he's kind of adding value to the community and also kind of turning it like capturing value from it as well. You know, there's a company called Pavilion, which is specifically focused on like revenue leaders. So like VPs of sales and chief revenue officers. And, you know, they just raised a huge round. They're doing really well. Reforge is like a product management training company. Just raised a couple of rounds from Andreessen Horowitz, is doing really well. There's another company called Pre-Sales Collective that's focused on SDRs as well. I think, you know, everyone's kind of figured out that in tech companies there's a lot of enablement resources for sales, and then basically everyone else is like, you know, you're given like a week onboarding or whatever, and then you're kind of told to go and figure it out for yourself. And so I think that there's a massive amount of capture opportunity there where like basically you can, you can be the learning and development function for these people and for these teams. And like the amazing thing is in tech, like a lot of these companies have learning and development budgets for these people for that exact reason. And so like if I'm a partnerships person or an SDR or whatever else, and I have a I got a $2,000 or $1,000 annual learning and development budget, like, am I going to go and spend $500 of it to basically get like year-round download? I mean, like Reforge costs, uh, significantly more, uh, Pavilion costs significantly more, and you know, they're doing really well. There's another one, uh, that I was fortunate enough to be involved with called Chief, um, that was like specifically designed for female executives, um, you know, and I— last time I checked, I think the membership was $8,000 a year or $10,000 a year, and they're doing really well still as well. And so I think anywhere where you're basically not selling to like enablement to sales, and even if you are selling enablement to sales teams, it's an amazing business. But I think particularly like with these kind of less thought about functions, there's a lot of opportunity to help them out.

Yeah. Well, it's super interesting. Yeah, I was just thinking through not just the taxonomy of inside of startups, There's, you know, I've heard of paid Facebook communities for Amazon e-commerce sellers, and there's one of those that I know is $2,000 a year to be part of a Facebook group. And then there's a couple other ones for Amazon sellers too, where these people just do really well, you know, because you have a high leverage opportunity to, to prepare this content, curate the discussion, curate the people. And provide a lot of value to them when the decisions they're making are very expensive. I mean, I think that's one of the things about partnerships and sales and all this kind of stuff. It's also super interesting to me that there's not this for engineering so much. Like none of the things you just listed were for software developers. And, you know, I'm in a— I'm in a CEO peer group here. I've been— it's been transformative for me. I'm going on year 8 or 9, and my buddy who's very technical was like, why don't we have this for CTOs, like where is this for VPs of engineering? And it's really interesting. I haven't figured out why it doesn't exist, but it just seems like an obvious parallel.

I think that there's like, so there's a version of it, a company called Plato HQ. I think they're just called Plato now. And I think the really tricky thing about these communities is like when they were started and who they were started for, you know, and like you basically end up with like a lock-in. On technology and the way that people interact around that. And it can either be like something that scales really well or something that just like inhibits your growth. You know, like with, for instance, with your CEO group, I think like getting people together in person is like the best possible way to do this thing because you're probably not going to like be hanging out in a Slack channel all the time. You know, for us, we were really lucky. We just decided to use Slack and then we found out later on, oh wow, like you know, people work all day on Slack, and so they're just really easy to switch over and ask a question in our Slack community when it's like right there as a tab, you know. Um, and so we were just really lucky that we kind of built on that platform and locked into that. I think like with, uh, some of these other communities when, you know, they're built on Discord and, you know, they're kind of locked into it, and it's like, well, Discord's not really a great place for a professional community, or like, you know, maybe they built all around, like, round online roundtables. And, and then so it's really difficult to kind of like translate that into in-person events or, you know, into, uh, these other types of things. And so you end up like losing a lot of the, the people that you could potentially capture.

Yeah, yeah, I think that's a great point. You got to have the— you got to have the right tech stack forum for it to work. Um, yeah, I don't know, maybe we just Maybe just give all the, the software engineers like a, a VI plugin and they can put it in their, their text editor. Yeah, that's a, that's a nerdy joke. We'll give, we'll let them, give them an Emacs plugin and let them get really mad about, about it. Uh, yeah, it's just a very super interesting space. Like, I think, yeah, um, I mean, and I know there's demand for this stuff just because like I get a lot of questions. People send me a lot of questions in Twitter DMs, and I'm like, this is ridiculous, I can't answer all these questions. Um, but yeah, so super fun. So where— I mean, where do you think this particular— your particular paid community is gonna go? What do you see happening over the next few years? I mean, you have a day job. We didn't even really talk— you just joined Deal, and, uh, one of my— one of my ventures is a partner with you. Congratulations and condolences. Thanks for Tips on how not to get screwed by you. Like, but where do you, I mean, where do you see the kind of this paid community stuff evolving? Like, it seems like we're just so super early on it.

Yeah. Yeah. I mean, for us, I think in partnerships, we really have an opportunity to capture that whole set, like outsourced sales enablement team, uh, function, you know, it's like, uh, if you're, if you're like, I, you know, I'm running a 20-person team right now. It's probably going to be a lot bigger in the future. Like there's a lot of work that I need to do to upskill and stretch as that team grows. I have an executive coach, which is amazing. That person doesn't have experience in partnerships. And so there's this whole component for the executive that's really important. There's this whole component for onboarding new people into partnerships. There's a massive scarcity in experienced talent in partnerships because it's a newer function. So everyone's hiring and very few people have any experience in partnerships, you know. And so like there's this whole opportunity to like onboard and ramp new people in partnerships, which again, like there's not really any people or resources to do. The VP of Partnerships is already just like totally stretched trying to figure out what they should be doing. Um, and then there's this whole component of, okay, you've got people in role you know, how are you keeping them up to date and enabling them over the— over time. On the sales team, you have like a big sales enablement organization. Doesn't exist for partnerships, and it would be really hard to build because there's not really a playbook and like a defined process for what good partnering looks like yet. And so I think that there's like a— like, we really think that through community and through like value-added programs, we can kind of like plug that in and solve that problem for, uh, like companies that are building out partnership teams and programs. And so that's something that we think Partnership Leaders does an okay job of today, like, you know, but it's like kind of self-serve and something that we, uh, you know, we want to be able to do a much better job of in the future. Um, and I think, you know, there's like a bunch of other— like, if we can help people grow professionally, which is what we just talked about, and also grow personally. You know, like, we— that's why we started PLI, was like, hey, if you can increase your, uh, you know, like, your wealth and participate in these, like, upside opportunities over time, then that's an amazing thing. And that, like, we feel like we've got a lot of other ways that we can kind of bring opportunities to the community that way as well, which we're really excited about, um, like, help. And, and, and then, you know, like, The reality is that we have these great relationships with partner tech companies today, and many of them are kind enough to sponsor the community and sponsor our events and everything else. We also have a really good view into what they're not building and why they're not building it and what they would like people to build. And so we feel like we've got a really good opportunity to either incubate products or potentially even build our own products as well. Into this market, um, you know, like micro SaaS type products that can just plug in and work really well with these and kind of like join the dots between these different companies. And so that's something that we've been spending some time iterating on as well.

Yeah, totally. So what, I mean, you guys are 3 years in on, on the community.

Yeah.

What, uh, what would you— what are the top 1 or 2 things you would do differently in retrospect in terms of choices you made? Sounds like Slack is something you regret, but what What kind of things do you look back and you're like, oh, I wish I would have done that differently?

No, so Slack was a fortunate— we were lucky that we chose Slack. I mean, it's expensive, which is tough, but it made it really easy for people to be able to use it in their day-to-day life. So it was just like a lucky guess, I guess. I think things that we would do differently, we were really hesitant about increasing pricing, even though we knew that price pricing would add— like, increasing the pricing would allow us to add so much more value back to the members. But we were really worried about upsetting people. And you're going to love this, but like, every time we increase the prices, you know, like, the member value grew, and also the number of members we were acquiring grew, you know. And it was like, it enabled us to like grow our team and do a much better job. And it also like made everything else like much better about the business. And so like, if I was to look back, I would have increased prices earlier and more often and invested back in the business faster. I think that's— say every founder probably feels like that. I also think there's still things right now that we're not doing a fantastic job on. When you have such a sprawl of opportunities like this, where it's like, we can build a product, we can build training and enablement and a job board. And, you know, there's, there's so many things that it's really easy to get caught up in projects that are like fun, you know, especially when you have such a large amount of people that are asking you for things and giving you feedback all the time. So like, we get caught up in things that are fun because also it's a fun— it's like a, it's a real business, but it's also like kind of a hobby project for us, you know. Like, we all have day jobs Um, and so like you get caught up on the stuff that's fun and not necessarily the things that would have the highest impact sometimes. And so like we implemented a process for more scrutiny around like how we prioritize and like invest in projects, uh, but like even still we definitely end up investing in things where it's like, hey, this is kind of a fun thing to do, but like maybe it doesn't add value to the business or the members.

Yeah, totally get Cool, man. Well, this has been amazing. Hopefully it comes across. I'm super inspired by what you've done with this. And, you know, thanks so much for talking to me and about how to be less stupid about partnerships and also about how you're killing it with the community. So super fun. How, you know, you're working at Deal now. Happy to be a customer and a partner of Deal. How, how else can people support you and kind of follow along with what you're doing?

Yeah, so I mean, please do reach out. The Deal team's doing a great job helping companies hire anyone anywhere, and I'm really excited to be a part of that. I think outside of that, like partnershipleaders.com for folks that are working in the industry and looking to learn more, we'd be happy to chat to folks. And then I'm on Twitter, @xoptimizr with an S rather than a Z. You know, staying true to my roots. That's where I spend a lot of time. And all of this stuff is like passion project stuff for me. I love it. And so I'm always happy to chat with people and riff on things and go back and forth. And so if anyone's interested in these kind of things, ping me on whatever channel is convenient, and I'm always happy to help out.

Yeah, super good. Well, thanks for being here, man. Really fun.

Yeah, thanks for having me. So I could talk about this stuff all day.

Oh, clearly.

Cool.

All right.