The biz of Biz Ops - gearing up for Partnerships
In this article we take a look at what is the responsibility of Biz Ops in exploring, designing, and launching Partner relationships
In the "Evolution of the [Biz Ops] Engineβ, I outlined ways in which the department grows its ability, scope, and sophistication. One of the fundamental areas of Biz Ops work - business expansion projects - starts by validating the business model and solidifying Product-Market-Fit. But PMF is only ground 0 of the story.
It only allows you to play the game. Welcome to the field.
If you want to begin to learn the game, you need to find Go-To-Market Fit. That is, in what kind of ways can you acquire new customers (relatively) fast and cheap? What channels do you use, across marketing, sales, and partners to acquire a customer of a specific profile (an ICP), for a specific market (which geography), and a specific segment (e.g. SMB)? What obstacles are there, and how costly are they to overcome? There is lots to be said about how to achieve GTM Fit. But today I will focus on Partnerships.
In order to overcome some of the barriers of market entry and penetration, start ups turn to Partners of various flavours. According to a recent HubSpot report, start ups engage with 3.16 partners on average.
The first job of Biz Ops is to examine if and what kind of partnerships play to the company strategy.
And second, is to examine what the relationship with the Partners should look like - strategically and operationally. When (1) the initial design of the commercial structure, roles and responsibilities for both sides, and legal contracts are complete, and when (2) you activate one of those partners, should you allow for the Partnership relationship to gradually be absorbed into the business. Until then, Biz Ops takes on the initial stage of working with Partners.
There are three main objectives in engaging with partners:
βοΈ - extending tech/feature capability
π°- sales
π - extending reach (markets, verticals etc)
Here are the top ones, arranged in order of importance, according to HubSpot:
βοΈ Integrations partnerships - any SaaS company knows the virtue of integrating with other adjacent services that make the experience of the platform more advanced. In stead of developing your own capabilities, you simply hook up to another platform to provide those services.
π° Solution partnerships - the kind of partners who would use your product as part of their own service offering. Think consultancies and/or agencies. The reason why they become a βpartnerβ is because they deliver an experience around your product.
π° Referral partnerships - mostly for top of the funnel customer acquisition, you get a bunch of partners to refer customers to you for a fee. This helps reach new audiences through a partner that has a vested interested in bringing new customers to your product.
π (Value Add) Resellers - channel partners who sell your product on your behalf. They will mark it up and/or repackage with other products and services. Often they will act as an added customer success team. In an end state of the relationship they can self serve the provisioning of your product.
π Strategic partnerships - when you want to acquire new capabilities within your existing business. These relationships have a broad scope and incorporate elements of all of the above and then some.
When approaching partners, key areas to explore are the rules of engagement with the company and the end user. In an increasingly digitized world, the challenges get tougher with the increased complexity of data and operational dependence you see with various partners (as per HBR).
The full list of considerations is longer than your wish list to Santa this year (lower inflation, cheap air travel and affordable food anyone?). And the weight of each consideration will differ according to the complexity and type of partnership. But letβs focus on three key ones:
Business Model - what is the business model and corresponding commercial structure for the relationship. Are there any standard industry practices? And how do you make sure as a start up company you get you stand your ground if you are engaging with a large partner? How would it work for the long tail of partners?
Data flows - working with tech, legal, sales, and accounting, assess and define the template for data flows and handling. Make sure you capture the right data and you process it correctly. In addition, the tricky head of data privacy legislation pokes its head in partnerships, especially where one of both partners need to access user data in certain geographies.
Service Levels - Service Level Agreements are important to define and negotiate when you engage with Resellers, Service, and Strategic partners. You need to know who will service the end user - and how. Trivial questions like time zones and language may be of those underwater boulders! Think it through. Your and your partnerβs reputation depends on this.
And the list goes onβ¦
Designing a partnership relationship requires understanding how the partner works, their objectives, and how they will engage with you on an ongoing basis. As you map out the journey they take in engaging and working with you, you begin to tweak existing process, or create such from scratch. Then you need to train your internal teams, and often your partner. The goal is to create a seamless experience - for the partner but also for yourself!
Engaging Partners demands of both parties to commit to a long term relationship. Because you have to synchronise two products and two parallel operations orgs. Donβt treat a partnership as a one-off or it will fail.
The responsibility of Biz Ops, is to unravel and think through the interdependencies, and plan for scale. Because at some point they will let the relationship to be absorbed into the business. Thus making it the responsibility of other teammates to drive the relationship with the partner. And this requires leadership to commit time, space (all the physics) and resource for Partnerships to flourish. Partnerships are not an experiment. They are not a one off. They are a symbiotic long-term relationship.
When you embark on that mission, you are not done until you implement a scalable partner program with repeatable processes. More on this, in a future instalment of the π¦ Spotlight.
Readership notice: this is the last article for 2022. See you back here in January 2023, ready to rumble!
To continue the conversation, connect with me here: https://www.linkedin.com/in/ignatova/