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Channels, when “done right”, can help enormously in super-charging sales and expanding your delivery capacity, but planning your channel shouldn’t necessarily wait until you have your first 100 customers live and a fully documented offering complete with APIs and SDKs.
It’s never too early to Channel
Channel is often considered the preserve of the scale-up enterprise, but channels come in all shapes and sizes, and earlier in your journey it can be highly beneficial to partner with influencers, consultancies, data aggregators and other businesses that enable you to:
- Find customers, and
- Validate your product’s capabilities
Where the short and long term value is clearly defined for both parties, and where there is clear communication of the stages of engagement, early stage partnerships can be hugely successful, and in many cases, transformational for software start-ups. One such example is a German web analytics provider with which ChannelCreator worked from 2007 to 2010, that signed a proof-of-concept partnership with a North American hosted service provider that continues to be one of their biggest customers 8 years later.
The “Three Ps” of Channel
If you are sold on the concept of an early stage channel play, the question becomes “how do I select the right partners”? The key for a start-up is to recognise the limitations of your bandwidth. Don’t kick off 100 channel conversations – you will never sustain them all. Instead, go focused, strategic and deep. Here are three watch words for choosing the right partners:
- Profile - define your Ideal Customer Profile (ICP). Without this, you will never know who you are or what you are doing. Once you have nailed this down, find partners that advise and deliver solutions and services for these customers
- Pricing - ensure that you offer your service at a price point that is in keeping with the services provided by your selected partner. If customers are paying £20 per month for broadband, they will not pay £10,000 for your service as an add-on! Calibrate your product to match the billing frequency and price point, and if you can’t, you’ve got the wrong channel
- Pilot - define a manageable scope of work for your first project per partner, and over deliver. You can’t un-burn bridges, so making your first project with each partner a runaway success is paramount. Once the partner has seen your product well implemented and it has delivered a profit for them, they will be highly motivated to implement second and subsequent projects
ChannelCreator’s Channel
One pertinent example of the above model is ChannelCreator’s partnership with AngelsCube:
- Profile - ChannelCreator works with highly innovative B2B software start-ups that require support on sales and channel strategy – of which AngelsCube works with many
- Pricing - ChannelCreator offers initial qualification discussions free of charge, and actionable strategy from £6,000 per year, delivered on quarterly-review basis – this fits within an Angel funded business’ budgets
- Pilot - ChannelCreator is working with AngelsCube on both its blogging program and also its expert briefing sessions to offer initial insights to start ups free of charge
In Conclusion
Channel is an effective and powerful method by which to develop a business. However, it requires long-term planning and vision, and good governance. The final, essential component is therefore to continually review and re-calibrate to take account of experiences, changes in market conditions and emergence of new prospective partners. Hold yourself accountable to your original plan, beat yourself up every quarter, be honest about what you did and didn’t achieve, make adjustments where necessary and you may well be surprised by the results.
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