Which partnership are you actually setting up? The whole series in one place

I have asked that question in a lot of rooms over 25 years and the answer is usually "a partnership." That is not an answer. It is a category. Inside it there are at least eleven different animals, and they eat different food.

Over fifteen posts I took them one at a time, with a test for each that tells you whether what you have is real. This is all of it in one place, with the thirty questions at the end.

Before you pick a type

A partnership produces more than the revenue line, and if revenue is the only number you track, you will kill good partnerships and keep bad ones. Stage time you could not have bought. Analyst briefings you were not senior enough to get. Reference customers who took the call because the partner asked. None of that is revenue. All of it becomes revenue, later, through a door a sales VP cannot see from the forecast.

Which gives you a cheap test. Look at your marketing budget before and after the partner program. A working partner is a marketing channel someone else is paying for. A logo on your website that you also have to pay to promote is not a partner. It is a sponsor, and you are the one sponsoring.

Then the question underneath all of it: what are we short of that this partner fills, and what are they short of that we fill? Write both answers down. One page. The partnerships that worked were the ones where both lists were honest. The failures were always the same shape: we knew exactly what we wanted from them and had never asked what they were short of. That is not a partnership. That is a wish.

Four questions, in order:

• Where are we losing, against the market or against one named competitor? Not where are we weak. Where are we losing deals.

• Which of those losses can we not fix alone, at least not this year?

• If we bring someone in to fix it, what are they short of that we have? A partner who gains nothing from you is a vendor, and vendors leave.

• Does the problem stay solved for both of us after the announcement?

We made encoders and kept losing the second half of the conversation, because we had no streaming server. The first company we asked said no. They saw no gap on their side. The second had a very good streaming server and no hardware. Their gap, our fill. We put their server inside our box, and a product line existed that had not existed before, because two lists were written down and set side by side.

1. Referral: the door, not the program

The referral partnership is the one every company sets up first. A partner page, a finder's fee, a form. It almost never moves the revenue line. The useful thing to say about it is that it is a door. The one referral relationship that mattered to me was a production company that sent us the occasional name. The referral was not the value. The referral was how I found out where the value was.

The test: if you shut it off tomorrow, which customer would notice?

2. Reseller: give them your engineers, not a catalog

A catalog and marketing funds gets a partner reselling your stuff for margin. Give them your technical sales and your engineering too, and the partner is solution-selling the customer's actual problem instead of moving a widget. That is how one minor league ballpark deployment, brought to us by an integrator, turned into hockey arenas, college stadiums and other sports entirely.

The test: is your product in their rep's quota, or just in their price list? Price list means they will quote you when asked. Quota means they will bring you a deal you did not know about, which is the only reason you gave up the margin.

3. Technology integration: in the product, or in the press release

For three years I was the buyer, and every time a vendor told me their product worked with another one, I asked to see it in the product. Most of the time it was not there yet. On the vendor side, certification meant we had tested the partner's product against ours and somebody owned keeping it working. Not a badge. A maintenance commitment. We certified competing encoders on our own platform. The sellers hated it, for about a quarter. Within a year the integrators had stopped asking which encoder, and the platform was the thing they specified.

The test: did the integration change the size of a single deal? Name the deal. If you cannot, you have a compatibility statement, which is fine, but it is not a partnership.

4. Distribution: the partner who knows your number better than you do

One distributor was half the company's revenue. I built that from a standing start. It was one of the best decisions that company made, and it was also the most dangerous thing on the balance sheet. A distributor who is half your number knows your number better than you do. The next move feels disloyal when you make it: a second one, smaller, in a different region. A distributor who knows there is a second door negotiates differently, and nobody has to threaten anybody.

The test: if your largest distributor walked away tomorrow, which quarter would you miss?

5. Systems integrators: in the deck is not in the backlog

A systems integrator does not sell your product. It decides whether your product is in the architecture, long before anyone from your company is in the room. The loud failure is a partner that sells a deal without asking a single qualifying question and throws it over the wall the day it signs. The quiet one is the champion who leaves, while the deck outlives the relationship.

The test: which practice owns you, by name? Not the firm. The practice, and the person running it. Then: how many of their billable people are certified on your product? That number is the number of people who lose money if you get cut from a design.

6. Services partners: a template, or a person

Once we started attaching that same production company to event deals on purpose, the average event deal went from tens of thousands of dollars to about half a million. What made it repeatable was not the relationship. It was the paperwork: a proposal template, a pricing sheet with the partner's line already on it, a one-page description a seller could paste into an email.

The test: is there a template, or is there a person? If a new seller could attach your services partner to a deal in their second week without asking anyone, you have a partnership. If they would have to find the one person who knows how, you have a favor, and favors do not scale.

7. OEM: the highest ceiling and the longest runway

OEM is the partnership where you disappear. Your part goes inside their product and every unit they ship is your revenue. An OEM partner is not agreeing to sell your product. They are agreeing to build their product around yours, and co-build comes before co-sell. We have also been the one building on someone else's platform: a much larger company's media platform was the thing we designed into, and they named us their partner of the year four years running. Ten multi-million-dollar deals came through that one platform in that stretch. The failure mode is the flip side of the ceiling: you become a line item in their bill of materials, and the day they find a cheaper part you find out from a purchase order that did not arrive.

The test: does the customer know you are in there? Not the OEM. The customer.

8. Strategic alliances: the logo slide

An alliance is the most senior-sounding partnership on the list and the easiest one to fake, because the joint press release, the co-branded webinar and the joint business plan can all be produced without a single customer being involved. Some of the alliances I formed produced real revenue. Some produced a logo slide. The difference was never the size of the partner. It was whether there was a shared customer at the center of it on day one.

The test, in three parts: is there a shared customer, by name? Who is the executive sponsor on their side, and when did they last show up? What is the joint number this year, and whose quota is it in?

9. Standards: the partnership with your competitors

In a standards body the people across the table are the companies you are trying to beat, and the outcome makes it easier for a customer to switch away from you. It is also the one that grows the whole market. I was a voting member in the standards body while the codec standards that run most of today's video were being written. Your sales team will hate a standard for exactly as long as it takes a customer RFP to start requiring it. A standard is a bet on where the market goes, and somebody has to stay in the seat long enough to find out whether it got there.

The test: has the standard changed the wording of a single customer RFP?

10. When your biggest competitor becomes your partner

Early in my career our one competitor that mattered was building the same accelerator board we were, so they could put it inside their own encoding appliances. Their software was better than anything we would have written. Our board was better than theirs. I called the two founders and asked why they were spending engineering money on a board when their customers were buying them for the software and the box. Our board went inside their appliance, they put every engineer back on the software, and every box they shipped was our revenue too. It was a gap analysis run on both sides of the table at once.

The test: who is building the same thing you are, and have you asked them why?

11. Marketplaces: the budget you already lost the fight over

The only one of these I have never run as a vendor. I bought through one for three years, for a company with a few hundred thousand seats. A marketplace is not about discovery. It is about money that has already been spent: committed cloud budget that a buyer can use for software they need. The listing is not the partnership. The partnership is whether the cloud provider's own rep gets paid when a customer buys you through it.

The test: how many deals closed through the marketplace this year rather than beside it?

Pick the type last

If you ran the tests on your own program, you probably found what I always find: one or two types that actually move revenue, wrapped in five or six that exist so the slide looks full. That is what happens when partnerships get built to answer "do we have partners" instead of "what is the market missing and who fills it."

What I actually do is look at both lists at once. One company has a great product and is missing one thing. Another has great technology and is missing something else. Once you can see both gaps, the shape of the deal is obvious, and it is almost never the one everybody in the room walked in wanting.

I have sat in both chairs. I built the programs as the vendor. Then I spent three years as the buyer, deciding which partner programs got deployed across a few hundred thousand seats and which died in a folder. I am a solution seller and a partnerships person at heart, and the thing I am best at is using the network I have built over twenty-five years to solve a problem one company cannot solve alone.

The thirty questions

Before you pick a type

1. What are we short of that this partner fills, and what are they short of that we fill?

2. Who runs the gap analysis at your company, and would they say the same list you would?

3. Are partnerships raising your marketing cost?

4. Where are we losing, against the market or against one named competitor?

5. Which of those losses can we not fix alone, at least not this year?

6. If we bring someone in to fix it, what are they short of that we have?

7. Does the problem stay solved for both of us after the announcement?

Referral

8. If you shut it off tomorrow, which customer would notice?

9. Has a referral ever moved your revenue line?

Reseller

10. Is your product in their rep's quota, or just in their price list?

11. Which of your resellers brought you a deal last quarter that you did not already know about?

Technology integration

12. Is it in the product, or in the press release?

13. Did the integration change the size of a single deal?

Distribution

14. If your largest distributor walked away tomorrow, which quarter would you miss?

15. Who is your second distributor, and does your first one know?

Systems integrators

16. Which practice owns you, by name?

17. How many of their billable people are certified on your product?

Services

18. Is there a template, or is there a person?

19. What share of your sellers attached the partner's work in the last two quarters?

OEM

20. Does the customer know you are in there?

21. Who at your biggest OEM's customers knows your name?

Strategic alliances

22. Is there a shared customer, by name?

23. Who is the executive sponsor on their side, and when did they last show up?

24. What is the joint number this year, and whose quota is it in?

Standards

25. Has the standard changed the wording of a single customer RFP?

26. Which standard are you helping write, and which are you waiting to have written for you?

Competitor turned partner

27. Who is building the same thing you are, and have you asked them why?

28. What are they short of that you do better, and what are you short of that they do better?

Marketplace

29. Does the cloud provider's own rep get paid when a customer buys you through it?

30. How many deals closed through the marketplace this year rather than beside it?

Pick the type last. Most people pick it first.

Which one are you actually setting up?