E27: How Matt Braley Built a Multi-Million Dollar Alliance Ecosystem at InvoiceCloud

and today's guest is Matt Braley. And Matt started at Invoice Cloud as AE number 3 when they were half a million ARR, eventually became their first CRO at the $28 million mark and then scaled the business to $170 million, a $4 billion acquisition by Vista Partners, and just an awesome outcome all the way around. And we're going to talk about alliances today and go super deep on it. And Matt grew their alliance ecosystem from 15 to 50 partners, and it accounted for over half of their bookings by the end of Matt's tenure. So it was just an incredible part of their go-to-market. And today Matt is advising, consulting, and investing in growth stage companies. So I'm pumped for this topic. And Matt, really appreciate you joining me.

Thanks for having me, Kyle. Pumped to be here.

Hello and welcome to the Revenue Leadership Podcast by Topline. I'm your host, Kyle Norton, CRO at Owner.com, and every Wednesday we dive deep into the strategies and tactics being used to drive success by the best revenue leaders in the world. So join me as I sit down with revenue operators to discuss actionable frameworks that you can implement in your business today with no fluff, no sales pitches, and no platitudes. This episode is brought to you by SalesApe.ai. SalesApe is the AI-powered sales assistant that engages your inbound leads instantly, answers questions, and books sales meetings without you needing to hire extra staff. Built for any company with more than 100 leads a month, SalesApe ensures no leads slip through the cracks. More sales meetings, more deals, less hassle. Grow without the overhead. Try SalesApe for free at SalesApe.ai/Kyle. Yeah. So as I mentioned, we are going to talk exclusively about alliances, not something that I have spent a ton of time on the podcast discussing. So we're going to get really deep and talk about who should think about doing alliances, how they should think about who the right partners are, execution, building funnel, and really share some great frameworks with folks. So what did I miss in the intro? Anything else that you want to add to your background before we jump in?

I think that's pretty much it. You covered it.

All right, good. So as an entryway into this topic, so just talk about what alliances meant to Invoice Cloud during your tenure. I gave like a quick snippet, but talk about a little bit of the history and what it ended up delivering for the company.

So we started doing them, uh, when we were sub-$1 million in revenue and they came in many different forms, but we were looking to find companies that we could partner with, create a technical integration, and then our joint offering would, uh, deliver a 1 1 3 outcome for the market. Uh, there's other types of partnerships that can be successful, but these are the ones that we found created the, the most velocity. So they were a large source of pipe gen for us, source of bookings, and we oriented a good amount of our go-to-market motion around alliances because it was such a material amount of bookings and pipe for us.

And I would imagine that must have been a pretty significant competitive moat as well.

It was particularly when we could create competitive advantages either through go-to-market messaging or through the way that we did the technical integration and mutual delivery. Uh, the, the competition caught on and became less of a moat over time. But yes, it was, it was a material moat.

Yeah.

Particularly, particularly on the, uh, the, the NRR side is when if we had a client maybe that wasn't quite as happy with us, the partner would usually give us advanced warning that might have been hard to detect ourselves, and we could go in and do something about it.

Hmm, that's interesting. Yeah, I had Stevie Case, who's the CRO of Vanta, on a couple of months ago, and one of the things we talked about is execution is the only mode. So, you know, that Alliance ecosystem would have been a moat originally, and then people catch on. Same thing's happening in my business. But execution is the only thing that you can really sustainably rely on in the long term, which I thought was great, great framework by her.

Absolutely agree.

So let's get into just like the failure modes, because I know a lot of startups that have tried partnerships of all sorts of different variants, and we're going to talk alliances specifically. Like, where do things typically go wrong for people in your opinions?

I think anyone who's worked in partnerships has most likely ended up with a paper partnership or two along the way, meaning you put a year of work in, there's excitement on both sides, maybe a press release, and then nothing materializes. And the, the overwhelming majority of the time, that's because of a lack of upfront alignment at qualification. It really requires the same level of rigor and inspection and evaluation as an enterprise sale. But the majority of companies that I've observed don't treat it that way.

And so how do you see them treating it as opposed to like an enterprise sale?

They're not doing enough to define what they're trying to achieve with the partnership and then the things that will need to be true for that, those outcomes to actually materialize.

And so we'll get it, we'll unpack some of how to actually run a great alliance process. I'm curious, maybe just zooming out. So alliances are part of the partnership motion. Maybe just frame out, okay, what are the different partner motions that you've seen be successful? What's the definition of an alliance? And in which cases is an alliance the right approach?

Sure. Yeah, so we're not talking about, in this conversation at least, resellers like CDW or marketplaces or affiliate referral programs, brand collaborations, or, you know, having an app in Salesforce's marketplace or store. Those are all different forms of alliances that, that can be successful in different contexts. But the, for those who are not familiar with Invoice Cloud, these are enterprise sales that require a technical integration for the delivery to be really good. There are long sales cycles, ACV over $100K, and for, there to be a lot of velocity in the deal, there needs to be buy-in from the core system provider that you're able to deliver in conjunction with them or the system of record, depending on the vertical market. So Invoice Cloud's product was a horizontal platform that had vertically oriented go-to-market teams selling to, to different groups.

So do you use the word alliance and partnership interchangeably? And we're talking about a technical alliance, or what's the taxonomy that people should think through this?

I use them interchangeably.

Okay. All right, cool. And so, so then under the banner of partnerships and alliances, really what we're talking about is a is a product partnership, like a technical partnership, a product partnership where there's some embedded components of your—

of the two systems or an integration where there's a data exchange. The former creates more stickiness and can provide more value to the market, but it could be either in this context.

Okay. And then some sort of joint go-to-market on top of that.

Yeah, that's right.

Okay, cool. And so then what were— for Invoice Cloud, so you had these technical alliances, technical partnerships. Were there other types of partnerships that you guys had as well?

We had some referral partnerships. We tried to do reseller partnerships, and most they ever created was a trickle.

And so what makes this, what makes this partnership or what made this version of things so successful?

Sure. What we were trying to accomplish is building cross-functional relationships so that the AEs or CSMs of our partners who have the relationship and have the trust of the client already would make introductions to our team. So that if you have a 7-step sales cycle, instead of starting at step 1 of the sales process where you're cold calling in, you're starting at step 3. And they're also helping validate that in an environment where there's a technical delivery, that that's going to work and go smoothly as well as supporting while we're doing it.

Okay. And then Let's just talk about like, so why do this? Like, what, like, why pursue a technical partnership in contrast to a reseller relationship or a referral relationship? Like, what's, what's the, what's the objective in the end?

I think in different contexts, the others could work as well. In an enterprise context, it's very difficult to teach a third party how to effectively sell a complex product with a long sales cycle. So that's why I think that in, in this context, a reseller alliance would be tough to pull off. We tried it, didn't, didn't work so well because all we're trying to do with the partnership from a co-sell go-to-market motion is have them open the door for us. So doing things like educating their sales reps with a couple slides in a deck. So when they go and talk to their customers, they can ask intelligent questions, just enough to get the prospect interested and then turn over to our sales rep to actually run the full motion.

Okay. And so then you're going to have a rep from each company in the same meeting, in different meetings? Like, what does that actually look like to the customer when, when they're buying like two products that are, that are in a technical alliance like this?

So what we were trying to do is have the CSM or the AE that were on our partner side be in the first meeting with us so that we're jointly presenting the same message. And then these are long sales cycles, so we're not asking them to go and join us for every interaction with the prospect from there on out. But if you're partnering with a core system provider or an ERP company in a vertical SaaS context, they usually understand all of the players within the account. So we would leverage them for account mapping and understanding the power base and figuring out what to do if we got stuck because they've already sold to these same people. But yes, they're usually in the original, the first meeting at the beginning of the deal and helping us get in the door, and then we're just calling on them if things slow down.

Okay, so, so these are customers in your partner's install base. They're saying, we've got this, uh, we've got a partner, Invoice Cloud, who has, uh, a deeply tech deeply integrated or part of the product that is intertwined, you should talk to them. Here's why. And then they're introducing you guys and you're now starting at, you're starting farther into that cycle than you otherwise would've. Is that right?

Exactly. So back to your question before, like, why would you do it? It's the long game to get set up, but if you set up and execute it well, then it'll shorten those longer sales cycles materially. In the future.

Okay. Do you want to give an example of one of those alliances that worked really well just to, to make it concrete for people?

Sure. So we were selling into insurance, utilities, local government, and then consumer finance, consumer lending companies. All of those vertical markets have core systems, systems of record or ERPs that are, that are serving those that are specific to those markets. We partnered with an ERP company that might have 200 customers. We're then at the beginning upfront in the alliance getting agreement of what we're going to do to build pipe together, what KPIs and metrics that we're going to mutually align on that we want to, that we want to achieve. And then we're figuring out tactically, like on the front lines, how are we going to execute those things? They're making introductions, there are sales reps and selling the deal, and then we're sharing revenue with them so that they're getting a boost on a new or a new revenue stream depending over time.

That said, and what was the driving reason for the partner to want to work with you guys? Is it the revenue share or was it retention and product stickiness on their side? Like, what, what was the, what was the driver?

Yeah, it could be either. That's where understanding the partner's motivation is, is critical. On the— in each market, there's the leaders in the space and the laggards in the space. The leaders are more after new logos. They might be higher growth, so they're wanting to If you're creating a technical integration and a joint product that's giving you a 1 1 3 outcome, they're going to be more focused on how you could help them win new logos. A laggard in the space, maybe that second, third, fourth player in the space who might be losing a little bit of market share, or might be— their growth might be slowed down by the, the leaders there. They might be more focused on retention of their existing clients, getting a new revenue stream up and going, trying to create some competitive moating. So before you go into any of these partnerships, it's critical to understand what the motivations are of the other side because that informs the, that informs the tactics and how you'll go to market together.

Okay, cool. And, and so I want to go back to what you said around this notion of like an enterprise sales motion. And so, you know, great enterprise reps run a, run a sales cycle with extreme, uh, precision, and that doesn't seem to be how you see it in partnerships. So maybe just like say, say more about what you were nudging at there.

Sure. Yeah, I think that the way that I think of what you have to do to create a successful partnership is upfront you have to run a full enterprise sales cycle, right? So you're multi-threading, mutual action plans, champion building, getting commitments of what you're going to do after the fact to actually make the partnership successful. But then once you signed it, unlike an enterprise deal, you have no money at that point. It's just a piece of paper.

Yeah.

After you sign the partnership, you have to go do a product launch. You have to align go-to-market teams, you have to figure out how you're going to execute cross-functionally. You have to have a feedback loop to track what's working and not working, iterate on it quickly. But instead of just doing that internally at your own company, which is hard enough, you have to do that between two companies successfully because you're launching a joint product or an integrated product together. So there's an enormous amount of complexity required in order to execute this well. And I just have seen over and over again that the expectation setting and identifying the blocking and tackling and how things are going to work after the fact, once the partnership is signed, tend to be too loose. And that ultimately is what— how you wind up with paper partnerships. You're talking about something this complex. Why do MEDDIC and other frameworks exist, particularly something like MEDDIC? It was built for enterprise sales at a fundamental level. The purpose of, of MEDDIC is to tell you that if you can't get these certain things done in a deal, stop spending time and resources on it. If you can't build a champion early, find another champion or get out. If you're not aligned on the— they don't see the value in what you're doing, then there may be a better fit for a competitor and get out of the deal. So on each deal, it forces you to keep asking, should we keep trying to climb this mountain or abandon the mission? And that's how— that's the rigor which partnerships need to be thought of as well as you're pursuing them. And I see a lot, just have seen a lot of times that, that, that approach isn't taken.

Yeah. And I want to go back to, they tend to be too loose. What tends to be too loose about some of these partnerships?

The KPIs, what each side is expecting to get out of it, the alignment at every level of the organization. So maybe the executives on both sides think it's a great idea to do this thing, but then the AEs and the VPs of sales aren't aligned and they can't tell you why it would help them hit quota. If the AEs can't tell you why they should care about it and why it would help them hit quota, or the CSMs, depending on the context, the thing's going to die in the field because they're going to spend time selling their own product.

That makes a ton of sense. And so that is, you end up with that because you haven't been as diligent and there's not enough attention to the details all the way down to how this hits the front lines.

Yeah, that's exactly right.

Okay, cool. So I want to get, well, before we get into the exact framework, because you have a framework to share around how people should think about this. I want to just ask about like, who should be doing this? Because you guys were like a very particular business. I think everybody gets— what so many companies get wrong is they hear a cool best practice on a podcast like this. You're like, well, Matt crushed it and you guys like sold for $4 billion. So like, I should go form a bunch of technical alliances. But people don't think enough about Well, is that right for my business? Is that a best practice for companies selling into government and utilities, but not restaurants, for example? So how do you explain to people who technical alliances are great for, who is it not for, and how should we, how should we think through that?

Yeah, so I think it's, there's a number of factors to consider. You and I were chatting about this the other day. It doesn't work as well in the SMB vertical SaaS space because there's less product complexity. So there, there's more of a tendency and an ability to create a product, product or platform that can serve all of the needs of that end of the market.

Mm-hmm.

I see it work best in larger ACV companies, let's call it like $40,000-$50,000 and above. I'm sure there's many successful partnerships that go lower than that. That's where I've seen it personally, seen it work the best. And then the reason that it works a little bit better in vertical SaaS or in horizontal SaaS with a vertically oriented go-to-market is because it's easier to find companies with an overlapping ICP. So when you're building your IPP, your ideal partner profile, if you're selling into a vertical, there's going to be a bunch of vertical SaaS companies that are potential partners that have a very natural customer overlap of customer bases. When you're going with your horizontal platform and you're going after partnering with other horizontal platforms, there's going to be some overlap, but it's not as, it's not as obvious. Is to, when you're building your IPP, you need to understand if you're selling to the same buyer, what they care about and like what you're going to mutually get out of a partnership.

Makes a lot of sense. So overlapping ICP, so vertical makes sense, enterprise-oriented. And is there anything, is product complexity important? Like it's very technical products or could it be simpler products, but just like big ACVs.

Are you talking about your product or who you're choosing as an alliance?

Your product. Like, should I be thinking about building an alliance program?

There's got to be enough differentiation in moating in your own product that it's not easily replicable by the companies you're trying to partner with. So if you're selling a, if you're selling a widget, it might not be a great fit, but if you're doing something unique and differentiated that's around the edges of what, you know, companies are doing that you're trying to partner with, or you're doing it much better, you have a potential for a partnership. Our— to give you the Invoice Cloud context, most of our partners had a very light version of what we were doing. So there was 10 to 25% product overlap, but we were able to prove to them that the results we would get with our version of that platform would be so incremental and valuable to them to have us doing it instead of them spending their resources doing it. Instead, they can resort to spending their resources on what makes their beer taste better. And the Jeff Bezos framework instead of something that's off, off to the side that they would oftentimes like stop selling their own version of our product and just move to partnering with us instead. Of course, the economics have to work there and that's a longer conversation.

Okay. Makes sense. And you've said IPP a couple times, so your ideal partner profile. How do you think about who's the right, who is the right type of company to partner with?

So again, it depends on what you're trying to accomplish. I've seen the most successful partnerships with core systems and ERPs and systems of record, right? Because it comes— the, the lens is who's going to have the leverage to introduce you into their client base and actually create more funnel velocity for you. Again, assuming that that's what you're trying to accomplish. There's other ways to have successful partnerships, but in the, in this ideal partner that, that we're trying to create, that's creating a 1 1 3 in our joint product that's helping us accelerate deal cycles, is helping us increase margins. The companies that have the most pull with their customers are the ones that have a lot of their customers have a lot of spend with them. They have long-term relationships and they're the system of record.

Hmm. Makes sense.

Right. There's other partnerships that can be successful in other integrated. We had success partnering with some print and mail companies that were trying to do digital e-bills and text messages, and that was just a piece of our product and we could make it better for them. But those are, again, they don't have as much pull and sway with their customers. You're really looking at what's the level of influence the partner has with their customer base.

And, and decides, you know, like, um, you're obviously gonna have a bunch of product people because you're talking about a product partnership, but does this originate in go-to-market and, uh, you're pulling in product resources, or is it at an exec level or from product? Like, on your side, if you're starting to— if the, if the GTM leaders are listening to this, yeah, how should they think about developing that, that list of ideal partners and who needs to be involved in that, in that group?

They're a large investment across the whole org. They can't be a side project or it doesn't work. So you're integrating them into your go-to-market motion. Marketing's involved, product and delivery is involved. So it's, this has to be done at an executive level. It's another pitfall I think a lot of companies fall into is thinking that, oh, we could just build a partnership program off to the side and it's going to get us some leads. You can in maybe certain types of partnerships, but not with the type of partnerships we're talking about here.

Okay. And so most people don't have an alliances person to go do this work. It would originate with the CRO probably. Is that usually it?

Or yeah, so the head of sales or the CEO. Okay. Okay.

Makes sense. All right. I think this is like a really good framework to think about, okay, I'm the right type of company to go hunt technical alliances. I have an idea of where to go maybe now. And so let's talk about your framework now, the medic for alliances, and maybe just like lay it out and then we'll pull it apart piece by piece.

Sure. So yeah, this is, this is hot off the press, Kyle.

Okay.

I came up with this while I was just putting together some thoughts for your pod. Agmetic exists because smart people came up with a way to measure progress and feasibility of something long and complicated, right? Anything that's complex takes a long time and has potential to be resource and cost intensive. So it needs continual qualification. So that's the idea of Vector, but it's a little bit different because you, when you're applying it to an alliance, how rigorously you score each pillar depends on the situation, what you're trying to achieve. You might have one alliance where all you're trying to do is get an integration so that you can deliver within that customer base or within that market segment. Others, you might be trying to do what we're talking about, which is get a, a joint go-to-market motion that's going to accelerate funnel. So every partnership that your alliance that you're considering needs to be run through this framework, but the actual way that you evaluate them and how you score them in each piece of the framework is going to be different based on what you're trying to accomplish. So that's what it all comes back to, is getting really clear on that. Are you trying to— are you trying to get faster time to market? Are you trying to enhance differentiation with your products? Is it NRR? Is it access to a market that you couldn't get otherwise? So upfront, when you're thinking about each alliance, you want to be continually asking yourself, what would be the cost of getting this by myself? So I think to circle back to one of your questions earlier, like, what do people, what do people get wrong? I think it's not doing that comparison thoroughly enough as well. Should be saying, all right, if there's these 500 customers who want to go get, what would it cost? What would be the resource investment for us to just go it alone? And then what would be the cost and resource investment to do it with the partnership? And what do we expect the partnership to deliver in that equation? And then throughout the entire process of evaluating it, just as you're doing with a, with a deal, figuring out what would be, what's going to be true about that partnership and what needs to be true in order for the outcomes that you're trying to get to come to fruition.

I really like that as a framework, the cost, and I guess risk too. There's a lot of risk with partnerships. We'll talk about de-risking. So I'm sure everybody is under a lot of suspense right now. So Let's hear the framework.

Sure. So, it's actually a backronym called VECTOR.

Vector. Okay.

Backronym means you made up the acronym first and then fit letters into it, which I suspect lots of people do with acronyms all the time.

For sure.

So—

And give me the acronym then, sort of, and then we'll pick into each part.

Yeah. So the V is value, the E is economics and incentives, the C is co-selling motion, the T is technical integration and joint product, the O is organizational commitment, and the R is results and metrics.

Okay, nice. So value, economics, co-selling, technical integration, organizational commitment. We'll spend a bunch of time there. Results. All right, vector. You've heard it here first, trademark Matt Braley. If I see it on LinkedIn, if I see this on LinkedIn with no attribution, I'm going to be really mad about it. Okay, so let's get into value. So what does value mean in this framework?

Sure. So the 3 questions are what needs to be true to unlock the value for you?

Right.

Does it need to be, do you need to get warm introductions to 25% of their base in the first year? Does it need to be 50% of their base? Do greater than 50% of their customers have to be over $10 million in revenue? So that would be what their customer base composition is. From the outside, a company might look like a great potential partner, but then when you get into the data with them and what their customer base looks like, maybe it's not a fit based on who you're trying to sell to. Right. Do you have to be able to generate a certain amount of pipeline in the first 12 months? So figuring out what the floor is for you to be worth it, and then what things have to be true in order for you to want to move forward with the partnership. Right.

And then— okay. Yeah, keep going.

Again, it's just coming back to what is it going to unlock for you and getting really clear on like why you're going to do that particular partnership.

And then, and then, so you said there's 3 questions. Question 1 is value. What's the value for me?

Yep. What has to be true to unlock the value for you?

What has to be true? And then what's the floor is the third one.

That was part of the first one. The second one is what's the value for them? And then the third is why does the market care?

Okay. What's in it for me? What's in it for you? What's in it for the customer? That's okay. That's good. And so how do you think— I think this is maybe the most difficult part of the entire thing, the what's in it for them. I think this is where things often go apart in my experience. And so how do you think about figuring out what they want, maybe bringing them ideas they didn't know they had? Like, what's the approach there?

It comes back to aligning on what their— with what their business objectives are. And this This is a little bit about the laggards and leaders conversation that we had earlier. It can also be based on what size and profile of company that you're trying to partner with. If you're a $10 million ARR business, you might have some interesting product for Oracle to want to partner with you, but they certainly don't care about the revenue that you can generate for them. Then you have to have a great product and they have to see it as strategic. But then there could be a handful of $20 million to $100 million ARR vertical SaaS companies in the space you're going after that do care about the revenue in addition to the strategic positioning, or they care about the ability to be able to cross-sell into your base.

Okay. And, and Sometimes it can be tough to figure this stuff out, or it can be tough because, you know, it might be a competitive market. There might be potential overlap. You might be thinking about if it's not them, it's somebody else. Do you have any ways to think about extracting from that potential partner, like what the business are or business objectives are that they actually care about? I feel like sometimes that could be a bit of a tricky dance.

I think it just, it's coming back to discovery, just like you would do in an enterprise opportunity. Figure out who at their organization ultimately is responsible for driving alliances, assuming they do alliances. If they don't do alliances today, then you're kind of taking a different path because you're asking them to build something they don't have a motion for.

Right.

But assuming they do alliances, it's getting to the decision makers and the champions that are going to influence the decision and what they're trying to achieve with, with alliance, like why they partnered with other companies, what they were expecting, what works, what didn't work.

I have a feeling a lot of people listening will want to partner with people that don't have like really well-established alliance programs. Is that a very different playbook?

It's relatively the same playbook, but it's, it's, it's what makes it more involved is you essentially have to teach them how to do it and you have to get them to allocate resources that they may not currently have allocated for those things. Right. So we have to— you have to get them to carve out a piece of their roadmap if you're talking about a creating a joint product. You have to have AEs or SDRs spend time on helping you generate pipeline. You might have to carve out part of a marketing, a marketing head in order for you to run joint webinars. So there's just more friction there, but it's very doable. And a lot of the companies that we partnered with, hadn't done partnerships before.

And would you recommend people do a technical alliance if I haven't done a lot of it and the partner hasn't done a lot of it? Is that sort of a path to nowhere, or is that where there's a bunch of opportunities?

I think it's going to depend on your— it's probably an unsatisfying answer, but I think it's going to depend on your, your, your product and your market positioning and like what you're trying to get out of the alliance. I think it's, it's, it's going to be— if you have no one on your team who's done alliances before, I'd suggest that you hire someone full-time with experience to do it. Make a full organizational commitment to it. You doing it as a side project when you've never done it before, like, that's going to be pretty tough.

Okay. So it's a pretty bold bet. Like, you have to really go full send at this and be confident that it's going to pay off because you're probably hiring somebody pretty senior, pretty expensive. And then putting a bunch of other resources behind it. So the, like, is this right for me question is a pretty important one, I think.

That's right. Okay. It comes back to the original qualification of what would you be able to achieve without the partner going direct and like, what is the partnership going to enabled you to achieve in terms of faster deal cycles, margin, moating, NRR, quicker delivery, whatever you're after. You know, like, if there's not a material difference of what you think you can do with through an alliance channel, and you're probably going to want to seriously consider just going direct.

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Yeah. Why does one of the priorities— yeah. Why does each side care? At every level of the organization. Like a lot of partnerships get stuck at the executive level, but then die in the field. You're asking, uh, AEs or CSMs to do something that is outside of their normal daily motion, which is focus on a product that's not theirs or making introductions for products that's not theirs, that they have to be incentivized to do it. And they, the question to ask them is, it's why is this going to help you hit quota? And if you can't get a good answer from the CSMs and AEs on the other side, they're not going to spend time on it. Same thing with the, with the VPs and the director level and all the way up.

And is that because, is them hitting quota because they're their product becomes more competitive and they win more deals? Or is it like, do you really need your partner to retire quota for, like retire their quota for selling your product? Or how do you think about that?

It's a great question. The panacea is to have the partner retire quota on your product. We were only able to get that in place like 10% of the time. So the rest of the time it was that it would either make their product stickier or they were selling more back to the base, or because they were generating pipeline with us, have then generated revenue for them. We were able to spiff them on it or their company spiffed them on it, and those spiffs were material enough to get focus. Okay.

So What's the, what are the best ways then to really like motivate the partner sales reps? Is it, is it spiffs? Is it the like product competitiveness? Like what are the most common things that are—

Are you talking about AEs or CSMs?

I mean, both really.

If you're talking, if you're talking about AEs, that they have to believe that bringing you into one of their deals is going to help increase their chances of winning versus not having you in the deal. If they don't, if they don't believe that, then, or they're not going to make more money on it, whatever it is, there's got to be some alignment of incentives there or else they're not going to want to do it because it's adding another layer of complexity into their opportunity for a new, for a new logo.

And how do you vet that? Do you have to go talk to AEs as you're like building the and framing out the alliance? Or because I would imagine a lot of CEOs like, yeah, the AEs should want to sell it every time. But how do you, how do you get the reality check?

It's vetting during the selling process of the alliance or the formation process of the alliance. It's, it's talking to the front lines. Usually the natural cadence is if you, even if you started with the CEO at a potential partner company, they're going to go ask the directors and the VPs and the sales reps, are you seeing this other company in the market? Do you see their product as a value add to what we're doing already? So there's usually going to be some momentum or positive response from the frontline that the executives have got, but then it's just figuring out what that really is and how material it is.

One of the meta points that I'm hearing from you is like brutal honesty with yourself seems to be super important because I think everybody gets excited about the possibility of a partnership. But then, you know, you're really talking about like stress testing it at every single level, like making sure that you have a path to make it uniquely valuable all the way through. And it's hard, like, you know, you could be 4, 6 months into a partnership and a bunch of work and then start to find out that the reps aren't going to care. I think most people like close their eyes and just say, just like do it anyways.

It's why, it's why I keep bringing it back to enterprise selling. It's the same thing. You've sunk cost fallacy is strong. You spent 4 to 6 months on the deal. You want to you want to convince yourself that it's got a chance to close. Still, you've got to be brutal. But the best reps are brutally honest with themselves and, and qualify and inspecting their own pipeline constantly and then only spending the time on the deals that have a higher chance of closing.

And so what about on the CSM side? How do you think about incentives there?

It's a little bit different. It's a little easier is comes back to our laggards versus leaders, laggard versus leader partner conversation before. The laggards are going to want— are usually going to have a larger customer base and want to help you sell more back into their existing base. You could do it similarly the way that you do with AEs. You're trying to get them to retire quota, but you could spiff them for intros, you could split the bookings, you could do quarterly sales contests. All this needs to be decided upfront with the leadership on the partner side, because if you're expecting a certain amount of pipe gen, the pipe gen is only going to be a trickle unless there's some incentive for the CSM to do this versus do what their normal job is. So getting alignment on how you're going to actually incentivize them to drive that pipe gen and then ultimately bookings for you is critical.

Okay, cool. So let's move into the C of vector.

Yeah. Yeah. This is the co-selling motion. So how are you actually going to get into the accounts? So are they willing to commit? Is the partner willing to commit to doing regular account mapping and figuring out which are the best to go after together. And that starts with— it's usually an 80/20 rule, right? Like the majority of their revenue, 80% of their revenue is their top 20% of customers. That's where you're trying to start. But figuring out who at the organization has the best relationships with those organizations who can make an introduction to you. And so getting a little bit in the tactical piece, if we zoom back out, It's like, what are they willing to do in terms of co-selling activities? What are they willing to do in terms of marketing activities? They want to invite you to user groups, to conferences. Do they do those? Are they willing to do quarterly joint webinars? What KPIs are you going to mutually expect out of those activities? And then it's getting into the tactics of how you'll actually do those things together. Ideally, you're getting the CSMs and the AEs at both companies talking to each other on a regular basis. So I want my, I want my AEs knowing where the CSMs and AEs are going in the next month or who they're talking to in the next month on their side so that we can have a conversation about what the current state of that customer is. And we can work together on a messaging plan or what questions we're going to ask them to try to drive a wedge to get our, to get our foot in the door, to get an opportunity going.

And so you've got the, the Reveals of the world that do this like en masse now or through like a technical integration between the two CRMs. But I would imagine that wasn't what you guys were doing.

It was not.

So how did you make that work?

A lot of spreadsheets and a lot of channels and Microsoft Teams.

Wow. Okay. So say more there. Like what did you have to do to get these two teams together? Like, is that a meeting every month where you've got a whole crapload of reps and a spreadsheet? Like what is What does it even mean?

The first, the first step is, is figuring out who has the best relationships with the customers on the partner side. Is that the CSMs? Is that AEs? Is that an executive? So you go into a partner that has 400 customers. It doesn't take that much time to figure out of those 400, the top 20% is 80. Who's got the best relationships with those 80 accounts? 'cause those are the people that are going to be most effective on the partner side opening the door for us. And then territory by territory, like where is their overlap? So, or segment by segment. So who's for my rep that's covering the Southeast for a particular vertical or segment, who covers that on their side? It's obviously not going to be a perfect fit, but then it's getting those two people talking and training the the reps on our side, like you're having a biweekly meeting with the CSM or the rep on their side. This is what you're trying to accomplish in those biweekly meetings. And then of course, already setting the expectation with the partners, like this is what we're going to do on a regular cadence.

Yeah. So the partner has to be ready to just like open the books completely. And is that contracted? Are you just saying like, hey, like as a part of this agreement, you're going to like send us a spreadsheet of your biggest customers and a whole bunch of information.

You try to— Yeah, you try to contract it. You can't always— Yeah, you were—

you—

these are, these are all levers and part of the puzzle. If they're not going to do that, then it changes the calculus for what you're going to be able to get out of the partnership. So then that goes back, it goes back to your evaluation process. Like they're not willing to give us a partner list or they're only willing to give us a partial partner list or they're not willing to make a certain amount of warm introductions. So we start at step 3 and can accelerate these deals. Well, that changes the business case for us doing this partnership. So understanding what they're willing to do upfront is the critical component and not finding out after the fact that they're not willing to share their customer list.

And so if you don't have a customer list access, then how do you do the mapping?

You, you probably don't have the type of partnership that we're talking about. You probably then have a partnership that's just a supported integration, which also can be useful. You might want to, you, you might want to be in a certain ERP ecosystem where they've certified that you have an org, that you have an integration that works. And therefore you can deliver on that platform that unlocks a market that you couldn't go after if you didn't have that integration to do the data exchange with the, with the ERP. Right.

Right.

So there could still— it doesn't exclude you from doing it, but you just have to take that into account when you're evaluating what it's going to return for you.

Hmm. Okay. Interesting. Go ahead.

Yeah, so one of the markets we sold into was utilities and it wasn't public record and there was no real easy way to find what ERP a utility company was using. And there's over 200 ERP companies serving the 15,000 utilities in the US. So we had a team of, there was no data source for this. So we had a team of SDRs for like a year and a half just cold calling every utility to figure out what ERP they were on. And we got 75 to 80% of them in the US. So I was doing that and that informed who— that, that helped inform who we wanted to go potentially partner with because we had a good sense of what the opportunity was within those ERP customer bases.

Okay. And so this transitions nicely into the T for technical integration. So again, the The level of commitment defines a lot, it sounds like. So, so talk to me, talk to me about how you scope a technical integration. How much is, is needed to make this worthwhile? Like, how do you think about vetting the team?

It's— if you're trying to just get access to their database, I mean, to their customer base, it can be a basic API data exchange. That's going to allow you to deliver in conjunction with their platform. Right. If you're trying to create a joint product where you're embedding your user experience within their existing user experience, that's an entirely different ballgame because it takes product resources from both sides. So the latter, you're actually going to be able to create something that's more valuable for the market by embedding the two products together. Usually those products are kind of bumping up against each other and there's some inefficiencies in workflows or customer experience that you can solve by doing that embedding process because you're keeping the best of what they're doing and the best, and then you're implementing like the best of what you're doing. Um, yeah, so that's, that's how our— that's how I would think about those two routes, and they're, they're very different.

Okay. And how early can you find that out? Because like, can you— you might be exploring a partnership and the ultimately the economics are going to drive how much technical work people do? Are those like intertwined conversations? You going into an exploration with that, like already with a clear idea of what you want to do with that partner? And how does that all come to fruition?

Usually it's usually those decisions are made at the business side. Let me think about that for a second. Kind of come together in different ways because it depends on what the current state is for the partner product that has overlap to what you're doing. So some of the partnerships that we went after didn't have a competing product. And so then we're just— it was very easy for them to want to create our two products together because they wouldn't have to scrap anything that they were already doing. Then others already had some of the functionality that we were doing. So those conversations were stickier because they were either having to sunset something or they were having to, for some customers, they would have their product that was doing a lightweight version of what we were doing. And then others, we were, they were turning that piece of their product off and offering our product in place of it to customers that wanted something more robust. So there's some friction to navigate and it's kind of on an individual case-by-case basis.

Okay. And the size of the prize would probably determine the robustness of that product work.

Exactly.

Okay, cool. And this dovetails perfectly into organizational commitment. So how should we evaluate organizational commitment? I think this is probably like one of the biggest drivers.

Right. So the questions to ask is like, just like with an enterprise deal, who's your champion and economic buyer? Who's actually going to own the outcomes and be responsible for execution on the partner side. If they don't have someone dedicated to driving it and owning it on the business side and the technical side, it won't happen.

And you're treating it exactly like testing champions out of the Challenger playbook and looking for the hard feedback.

That's right.

Trying to see where you're wrong.

Exactly. See if you could disqualify yourself. Hmm. Are the executives willing to commit to doing QBRs to track results together? Do they align to a business outcome that the, that the executives are trying to drive? Are they willing to train and certify their go-to-market teams on how to effectively open doors for you. These are all like litmus tests on the level of organizational commitment that they have to what you're trying to do. And again, just to continually bring it back to the beginning, what you're expecting out of the partnership determines how much organizational commitment, that commitment you need. You don't need this full, you don't need QBRs and their AEs to get certified if all you're trying to do is build a data exchange between your platforms so that it unlocks a market. It isn't a blocker for you selling to a certain segment.

Right. Right. And so let's say it's a larger-scale partnership that requires a bunch. So obviously executive alignment, we've talked about rep alignment, we've talked about Product is probably another one that's pretty obvious. Where else do you have to really go like test for organizational commitment?

Everyone who's touching a partnership, and that's going to be different groups depending on the context. There is a case where there, we partnered with a company that didn't have CSMs. They had a customer support team because it was a more lower, lower ACV company. And their customer support team was continually talking to their client base. And so they were the ones that we armed with a talk track to find out if there was intro opportunities for Invoice Cloud. So we had to get aligned with the head of customer support, which wasn't a typical role that we interface with in our, in our partnership motion. So just depends on who's touching the customers that you're going after together.

Okay. Are there any sneaky ones that people don't think about enough, but we'll get you?

That's a good question. I wouldn't say maybe it would get you, but I guess takes a— to build pipeline effectively with your IPPs, with companies that you're partnering with within your IPP, doing things like joint product marketing and joint webinars and having the— getting into the customers' user groups, which is usually all owned by marketing, is a huge driver of funnel. So I think there was times we underindexed on partnering with the marketing leaders early on and overindexed on executives and sales. So that's a good one to give you. To give you an example, we had a ton of success going to the user groups around the country of our, of our partners. So what it would typically look like is a partner hosts a user group in Charlotte and they have 10 or 15 local customers. Again, these are enterprise accounts, 10 to 15 local customers that come we would buy lunch for the user group. We would get a 30-minute speaking spot during lunch, and then we could go and sign people up for discovery calls while we were at that meeting. A lot of times we'd also, if we had someone that was a customer that was at that user group, we'd have them co-present with us. That ended up being a huge driver of top of funnel. And that was all the, you know, the user groups were usually all run by marketing on the on the partner side.

Yeah, that's a good play. Okay. Now we're into the last R of vector results. How should we people be evaluating and using this framework?

It's just making sure that you have a shared definition of success and they're willing to commit to— they're committing to your mutually agreed upon KPIs. And these are usually contractual. And then having a regular cadence for reviewing and tracking progress and figuring out what's working and what's not working, and then iterating.

If it's contractual and people are not meeting those commitments, is there much you can do about it?

So the way we would— the way we typically structured the agreements is we would pay one level of rev share for committing to certain KPI levels and then a lower level for committing to lower levels of the KPIs than even a lower level if there was no commitment for KPIs. So we had the optionality to decrease the revenue share that we were paying if those KPIs weren't met. So those were, those were the levers and those KPIs could be from warm introductions, influence pipeline, to booking, to implementation speed. There's a wide range of things that were valuable to us, and then we would be willing to pay a material rev share if they helped us deliver.

Okay, makes sense. Okay, so vector, value, economics, commit, uh, emotion. Co-selling motion. Okay, good. Technical integration, organizational alignment. What's the O?

Organizational commitment.

Commitment. And then results.

It could be alignment too. Yeah.

Well, we'll give me a half a point there. Okay. Sector. I like it. This is handy. So this is a great way to think through and really like stress testing the, your alignment pipeline. How the heck do you build an alignment pipeline, alliance pipeline though?

Great question. But first you have to start by defining your IPP and coming up with a list of partners. Tactically, once you have the list of companies that you're going to go after, start with a small group, maybe your top 3 to 5. And have a team of SDRs and AEs going after the end users, the customers of those partners at the same time that your partner leader or your CRO, whoever is in charge of partnerships, is going after the executives on the partner side. So you're taking a two-pronged approach. We found that is most effective because then they're hearing from the field that their customers are interested in the product. At the same time that executives are hearing that there's a new company that, that is interested in partnering with us. Now, in a, in an ideal world, you have customers of that potential partner that are so excited about your product and what you can do that they're willing to help you go to the executives at the partner and say, you guys should work with this company. You should create a technical alliance because we see that you guys were actually had a fully integrated product, it would deliver this extra value for us.

And then the actual executive outreach is always from the like CRO, head of alliances, and he or she are trying to go into their alliance people primarily if it exists. And if not, just the CEO or who is, if If they don't have a dedicated alliance leader, partner leader, where would you go?

Depends on the size of the company. Typically CEO, CRO, VP of sales, occasionally CPO or CTO. If there was like a strong— if there was a strong ability to fill a gap in their product.

How hard is it to build alliance pipeline?

Of actual alliances? Yeah.

Like, how hard is it to get people to, like, want to have a conversation and start, start that process?

I think it's not terribly difficult to get a conversation going. I think to move it beyond that is, is difficult.

And what would be the number 1 or 2 things that will help you move it beyond those initial conversations?

They have to see the strategic value and how it's going to create better outcomes for them. Is it going to help them sell more of their own product? Is it going to help create a new revenue stream? Is it going to help moat against new incumbent who's taking market share from them.

And I'm guessing that much like an enterprise cycle, you got to go in with an opinion of that and a hypothesis and try to—

Exactly right. And usually you build that hypothesis through talking to their end users.

I really like that.

If you— I mean, because they're the people that are going to know. If you go to a company and say, hey, I think we can fill a gap in your product, that's, that's not going to mean much without the end users also saying, yes, this is something that would be very valuable to have in conjunction with what you guys are doing for us already.

Okay. We're running short on time, but I want to ask one more question before we get into quickfire because this comes up a lot and I've gone through this personally. So I think one of the challenges with partnerships in general and certainly these like technical partnerships is that the payoff timeline is so long, unlike enterprise. When you get an enterprise deal signed, okay, you got the revenue now, you got to activate it, but the risk is sort of low if you're at a half-decent company. And so really, you have that end line, which is that wonderful DocuSign coming through your inbox. But with an alliance like this, that's now only the starting point. Like you sign the agreement, it's great. And like now arguably the real work starts. And so you might not know if this thing is working for like 24 months. Like we have a really big partnership that we've done with a food distributor and we were really confident it was going to work. We were doing something valuable for their customers. but it didn't really start to chug along until 6 months in. And my partner leader is a weapon, and we have a very compelling product, and we had, like, board-level introductions into this company. Everything was stacked up in our favor, and it still took us 6 months from not even just the signature. 6 months, then there was a lag, and then there was the go-live, and then another 6 months to where we, like, reasonably started to see a meaning, like, a material amount of close one deals. Hitting. So how do I know earlier in the process than us just having blind faith? We're like, we're going to sink 18 months into this. We're confident. If there's less certainty, how should people think about, is this working? Are these conversations going to lead somewhere if I've launched it? What are the signals that I should look at across this entire partner journey?

I think you hit the nail on the head. I haven't seen any partnerships take off in less time than you just described. They're always the long game. So having that expectation going in is, is really important. It's just, it's project managing it. It's getting the, the commitments up front that, you know, are the inputs that are going to get the outputs. What is the timeline that they're going to do the integration on? You talked about doing, doing a launch, right? They had to, so they had to do some sort of integration with you guys in order for them to start selling the product.

It was more about like activating their field, their field reps. This isn't a technical integration. This is a referral relationship, but with, but with 3,000 sellers that are on the streets. Working with restaurants.

Yeah, it's getting agreed-upon timelines of when things are going to happen and just being able to continue pointing back to that, whether it's product integration or whether it's, like you said, activating the field and, and enablement and having their people certified. And then just being realistic on, on the timeline and what you can expect in that timeline. As we're not getting That's where it comes back to. That's where it comes back to. If it's close between getting there on your own and get it what you think you can get doing it with a partner, it's probably going to make more sense to do it on your own.

That's a very good piece of feedback. I think that might be the, I think the single most important thing that you've shared in this whole thing is this. This clear understanding of what is the incremental value above and beyond you doing it yourself. And it's got to be pretty material to take on the amount of work and the risk profile because of the long payoff timelines and because of how many moving parts there are.

And because you can invest 9 months and then get nothing out of it if you don't set it up the right way in the beginning, or something else could happen after the fact. Yeah, there's the amount of wasted resources really can stack up.

Yeah, you really have to be willing to walk away. That's one of these other macro things I'm really picking up is that like you got to use vector, brutally evaluate, you know, the reality in front of you. And if it's not working, actually like have the have the discipline to walk away. You know, if you're not getting the upfront commitments and stuff into the contract that you are confident will lead to the outputs, like you were saying, like, do the painful thing and, you know, put that 7 months of effort behind you and just move on, which I bet is like one of the most common things that people make mistakes on here.

That's right. It's hard to do.

Yeah, because it's just like the enterprise sales motion analogy is just so much sense. Like the worst thing in enterprise is rose-colored glasses. I think that's one of the single most important things that separates like pretty good sellers with the elite ones because you can't really have more than 5 or 10 legit ops at a given time going. And if you're selling multi-hundred or multi-million dollar deals, it's like 5 actual deals, maybe 3, and it's all-consuming and you really have to try to look for reasons to say no.

I give that feedback to sales teams regularly that my best enterprise sellers were a little bit better at sales than the call it like 50th percentile enterprise sellers, but they were 200% better at disqualifying opportunities and only working on the ones that had a real chance of closing.

Yeah, yeah, for sure. Okay, let's move into the quickfire. Um, so what do you think separates a good CRO from a truly great one?

I think that the great CROs are effective at all altitudes, meaning they can zoom in— excuse me, zoom out and look at the business like a CEO, and then they can zoom in to break down an enterprise deal or work with the VP of sales on a framework and figure out where the enablement gaps are.

Yeah, it's funny you say that because Alex Bard, who's on our board, he's a investor at Redpoint, was here speaking to our product team and said this exact thing about executives more generally. And this, like, multiple levels of abstraction is super important. So it's funny you say that. Interesting. What is the most common advice you find yourself giving to leaders and mentees? So, like, new second-line leaders or people you're mentoring into the CRO role, like, what advice do you give to them most commonly?

Great leaders make everyone about around them better, up, down, and sideways. Like, you're just— your success is defined by how well you do this.

Yeah. Yeah. And it's not just about your team. What's the hardest lesson you've had to learn?

You have to let people fail. It's part of the learning process. Early in my leadership career, I took on too much, or I was too much of a safety net, and you ultimately are robbing them of the opportunity to learn. And then ultimately, like, that hurts the scaling process down the road and hurts growth down the road. Or requires you to work 80, 90 hours so that you don't— that growth doesn't get hurt. Yeah.

Yeah. Which some— there's a time and a place for, but you try not to do it for too long.

Right.

Last question. What's the best thing that you've read in the last 12 months?

The 15 Commitments of Conscious Leadership.

This has come up a couple of times.

Oh, interesting. That's fantastic.

I still haven't read it. I read or I listened to him do a podcast about it and then like downloaded the Audible and it's been sitting in there for probably 18 months.

Sounds like it's time.

It might be time. I'm like, oh yeah, Jim Detmer. That's who it is. I got to do it. I'm committing to you now publicly on the pod to my millions of listeners. I'll read it.

Cool.

Well, this was great. I feel like now I have such a better understanding of this myself and how to think through these concepts from a very first principles standpoint. So I'm glad we went super duper deep here. This is exactly why I like to do the pod and why I started it, because I just want to find somebody's superpower and really download it and share it because I don't see this type of content anywhere like this, this type of granular breakdown of this part of the GTM portfolio. So this was a blast. No surprise that Asad said you're one of the best out there and he doesn't say that lightly. So Appreciate you coming on, Matt.

Thanks, Kyle. It's been a pleasure.

Thank you for listening to the Revenue Leadership Podcast. If you enjoyed it, don't forget to subscribe, and you can find a link in the show notes. And be sure to leave a 5-star review, share it with your network, and please join me next Wednesday for another great conversation.