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0/ GTM Partnering for pre-chasm startups is hard. Really hard. I don’t recommend it. Like writing, if you really know what you’re doing, break the rules. But my view is partnering is one of leading causes of wasted time, effort and misspent hope. This thread details why ...
1/ The biggest problem with GTM partnering is not that it almost never works (it doesn't). It’s that when it fails, you don’t know why. And that occludes the most critical line of inquiry a pre-chasm startup makes, “do we have product market fit?"
2/ Finding PMF is as much art as axioms. But it's really important to figure out why you're not selling. Is it the market? the product? qualification? top of funnel? enablement? positioning? Answering these questions is really only possible if you’re driving.
3/ To wit, I maintain that in most cases, if the founder can’t sell their product (perhaps with some sales guidance), no-one can. And I’ll extend that to say if they can’t build a small team of senior direct sales reps that can sell their product, no-one can.
4/ A founder has all the necessary context for a visionary sale. And importantly, is plugged into the nervous system of the market, the tech and the product. And so can talk to relevant tech and market trends, the historical context, the competitive environment etc.
5/ Pre-chasm markets treat products like foreign objects, and founders, can bridge that gap. However, it’s unlikely that a partner (whether an incumbent, a distributor or a reseller) has a sales team who can. It’s also unlikely they’ll have the right incentives to do so.
6/ In the few cases I know of where GTM partnering worked well, the startup already had proven that they could sell the product, and had a sales team that could sell it, *and* they were able to get either product specific quotas or quota retirement for the partner salesforce.
7.1/ For partnering to work in early markets, the following generally needs to be in place. Some level of product market fit, sales enablement from your team, periodic accounts reviews, ...
7.2/ .. comp on partner deal reg, sufficient comp support for the partners sales force (quota retirement is better than spiffs). If you don’t have that, I wouldn’t do it.
8/ OEM/bundling is also problematic. Even if it produces revenue, you’ve not actually sold the value to the customer. And you’re disintermediated from the customer so can’t leverage the relationship (deadly in its own right). Meanwhile you’re cannibalizing part of your market.
9/ Large companies know that bundling is a temporary fix to inflate numbers by trashing a market with shelfware. It's often a desperate finance tactic. Startups need to understand that lesson too.
10/ So if you’re in b2b with direct sales, hyper focus on PMF, sell your product as a founder, build a direct team first (senior sales reps over high level VPs), and then once you get to repeatability, entertain GTM partnerships. Until then, meet partners in the market.
11/ It’s really their privilege to work with you, not the other way round. Thanks for reading.
