#1 of 7 key partner insights of 2022.
Last year many realized that despite the drums of #plg, there's never been a 🗽 top tech company that's reached the IPO scale without #partnerships.
🎯 In 2022 I profiled several companies that many may consider product led growth icons, but who in fact pair PLG with building channels, partnerships and ecosystem:
Zoom - not only 15-20% of their revenue is powered by 8K+ partners, the company also would’ve focused on #channel earlier given a chance.
Shopify paid 💰 $411M to their App Store partners in 2021 (8% of Shopify's $5B revenue) while in total their partners generated $32B Rev in their #ecosystem ~7X Shopify’s Rev.
Slack had a vision to become a #platform from the outset. It had 2.4K apps and ~1M devs in their ecosystem when Salesforce acquired it. ~ 50% of paid users used Slack Connect with 8 partners, etc.
💡 Jay McBain from Canalys explained eloquently in our session that partnerships have been crucial to the success of EVERY major company - from IBM and SAP in the early days to Salesforce, HubSpot, and Workday more recently.
“Every single successful company which has 10s or 100s of billions of dollars valuation has done it with partnerships. Every company CEO knows this - it's not a question of if, it's a question of when.”
🗽 2023 partner ecosystems continue to grow, creating 3 flywheels that companies cannot achieve on their own (Boston Consulting Group (BCG)
Higher #growth
Richer data insights
Cost efficiencies
90% of CXOs expect that ecosystems will be even more important (HFS Research).
⚡️ But 2023 will also be a year of a stress-test for partnerships
The recession cooled down the excitement with the realization that acquiring users is hard and building partnerships is ev
en harder, at least at the beginning. Even to consider partnerships it’s better to have signs of PMF (~ $1M ARR).
Success in partnerships doesn't happen immediately.
That’s why it’s a good idea to explain that to your CXOs, constantly show them your progress and align on the destination.
Jay McBain, same session:
“When you have a new partner, they don't offload any costs, they add cost, because you have to hold their hand through the marketing cycle, the sales cycle, and the integration implementation cycles.
The second deal gets a bit better, the third deal gets a bit better.
In the first 6-12 months, it's a double cost. You’re funding the channel, and your own internal teams. This is expensive.
📈 But on the hockey stick curve, when that partner can start doing it on their own - get a deal, sell a deal, and service a deal, and you're starting to win deals in your sleep, your cost to acquire customers almost goes to zero,
the lifetime value goes up because the churn rate goes down on those types of deals.”
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