This is Part One of “Reporting Lines” — our series on where (and who) your partnerships team should report to. You can catch the others below:

• Part One
  –
  Sales-first partnerships with Matt Bray, VP of Partnerships EMEA at Signavio and author of The Partnership Principle
• Part Two
  –
  Reporting to the CEO with Jake Wallace, Head of Strategic Partnerships at SignEasy
• Part Three
  – Marketing-first partnerships with Garrett Helmer, CMO at PrinterLogic

–

Starting to think about where your new partnership team should live in your org chart (or, in 2020’s standards, who do you see them Slacking most heavily with)? It’s a simple enough question, but how you “lean” your partnerships team can determine the trajectory of your company’s growth for years to come.

So, should your partnerships team report to sales, marketing, or product?—Should they be in the same Slack channel as your CRO, CMO, or CTO?

Matt Bray, VP of Partnerships EMEA at Signavio and author of The Partnership Principle, thinks you should start out leaning your partnerships team towards sales and marketing because you get a quicker ROI, and then shift to product at the enterprise level because a) the ROI takes longer and b) the GTM is more involved (think tech partnerships that launch within months to years instead of weeks, product development and marketing campaigns vs. just marketing campaigns, and a greater financial investment in your team, product, and campaigns).

Bray’s suggestion of starting with sales and marketing before transitioning to product is particularly relevant to mid-market companies (between 100-1,000 employees) that make less than one billion dollars in annual revenue.

According to our 2020 State of the Partner Ecosystem Report, which surveyed 126 industry professionals mostly working in the B2B world, we found that the first partnerships hire typically falls around the 100-employee mark. Additionally, 56.3% of our participants worked in sales before transitioning to partnerships. (Get the 2022 State of the Partner Ecosystem Report here.)

Source: The State of the Partner Ecosystem 2020

We think Matt Bray’s onto something. Let’s get into it.

Focus on Revenue and Pipeline First

Bray says you should launch your partnerships team with a focus on sales or marketing: “Your traditional mid-market SaaS organization will focus heavily towards revenue or pipeline generation, and therefore a sales mindset is critical in the role of partnerships.”

Prioritize your cash flow, your reseller relationships, your co-selling motions, and your co-marketing campaigns to increase your customer count and grow your presence in the market.

While focusing your partner strategy on your current business goals, you’re setting the stage to meet your future business goals as well. As you scale, you can use the cash flow, product expertise, and brand image you’ve invested in to build the foundation for your more resource-intensive product partnerships.

So, think “sales” early on, but keep “product” in your back pocket.

(Not convinced you’re ready for a channel program? Check your answers to these six questions to know for sure.)

Build Your Cash Flow Now to Invest in the Future

“Enterprise companies have the luxury of a big cash flow, so they can fund a lot of partnership development before revenue starts coming in. Smaller companies don’t have that luxury,” says Bray.

Invest in cash flow (read: channel and reselling partnerships) now so you can afford longer-term investments later on (without stressing too much over numbers). With longer product development processes, sales enablement, go-to-market planning, and so on, it could be some time before you see a return.

Once you’re at a solid place revenue-wise, consider broadening out into other markets and ecosystems.

Use Your Partnerships Strategy to Invest in Your Team (And Develop Your Team With Your Partnerships Strategy In Mind)

In the Early Days, Prioritize Partner Managers With a Sales Background

With sales in mind, you should consider not only seating your partnerships team near your sales and marketing teams but also consider this context during the hiring process. Is the potential hire a channel sales expert? Have they worked alongside sales teams before? Better yet, do they know how to get the sales team onto and excited about partnerships-fueled sales?

When considering your long-term goals, you should consider your potential hire’s background working with product teams, their ability to become more product-savvy when the time comes, or their ability to work alongside a more technically-inclined partner manager in the future.

Don’t Chase Technology Partnerships Until You Have Buy-In From Your Engineering Team

Bray believes that in the mid-market growth stage, you can use partnerships to grow your sales team. Your partnerships team can help grow your SDRs’ pipelines, enable them with more resources, and accelerate their expertise in the product.

As you invest in your sales team to develop their career and product expertise, you should also invest in your product and engineering team. When you make the switch to prioritize tech partnerships later, you’ll need product people and engineers that have a certain level of expertise, time, and resources to dedicate to product development and go-to-market processes.

Shift Your Partnerships Team to Product as You Scale

As your company grows and you focus more on product development and integrations, your partnerships may turn into more robust roadmaps that engage multiple internal teams. You’ll need not only the cash flow but the expertise and time of your employees.

“Once you start venturing into the world of product, you’ll start building campaigns and strategies that have six-month to year-long programs.”

He adds, “You have to work backwards. What is the revenue potential of me doing this—whether it makes sense with the resources you have, the time it’s going to take in order to achieve that goal, is everyone bought in from an executive leadership perspective to make it happen?”

Ultimately, you’ve invested in making your company, your team, and your product more mature and have improved your value proposition to your partners.

Consider Your Priorities for Growth

The framework that Matt Bray proposes is solid, and we’ve seen it work. At the same time, not every company upwards of the 100-employee mark invests in channel relationships before product (In fact, Part Two in this series will cover just that!).

Bray bases his framework on the following factors (and we think you should consider them):

• What’s the end goal for your company right now? Maximizing revenue? Attracting investors? Becoming “stickier” to boost retention?
  
• What’s the potential ROI of the partnerships you’re considering? Will your partnership strategy deliver short-term or long-term results (and, if the latter, are you able to wait)?
  
• What resources do you need? Think about the time, cash flow, and expertise you need to invest in before seeing the desired results.
• Do you have buy-in? If your go-to-market strategy requires a heavy marketing investment, is your CMO on board? If we’re talking about a year-long product endeavor, is your product team ready and able to put in the time? Is your CEO on board for a long-term investment strategy?

So, what do you think? Will you hire your first partnerships team with a focus on sales and marketing and transition to tech partnerships later—or, are you not feeling that strategy?

This post is the first in Reporting Lines:

• Part One – Sales-first partnerships with Matt Bray, VP of Partnerships EMEA at Signavio and author of The Partnership Principle
• Part Two – Reporting to the CEO for product-first partnerships with Jake Wallace, Head of Strategic Partnerships at SignEasy
• Part Three – Marketing-first partnerships with Garrett Helmer, CMO at PrinterLogic