Transcript

Eran Rosenblum (Introduction):         Moving from one territory to another the challenge starts all over again. So if I build my territory starting from the UK; serving the UK, Ireland, islands etcetera, and I would like to move into the German-speaking country, I will have to develop everything from the ground up.

Announcer:      Welcome to the Software Channel Partner Podcast where you’ll hear leaders of partner programs talk about their greatest challenges and most successful solutions. And now your host Louis Gudema, the President of revenue & associates.

Louis Gudema:            Welcome to the Software Channel Partners Podcast, where we talk with leaders in software partner programs to learn about what’s working today. I’m Louis Gudema, the president of revenue & associates, where we help companies grow faster by helping their channel partners grow faster.

Today I’m talking with Eran Rosenblum, who is the Chief Execution Officer of Gainsight in Tel Aviv, Israel. Prior to Gainsight, Eran held various business development, sales and channel positions at Symantec, Cisco, NetApp, Illusive Networks, CTERA and was the co-founder of eXatier.

Eran, welcome to the podcast.

Eran:    Hi Louis. Thanks so much for having me.

Louis:   Glad that you could join us. And because we’re recording international, there may be a little bit more kind of audio things going on, but I think we’ll have a pretty good conversation today.

Israel has a really advanced tech sector but a very, very small domestic market. So creating channel programs with companies in North America, Europe, and elsewhere in the world is critical. So we’re going to be focusing today on how to build a global partner program. But before we get to that Eran, please tell me about your career path that brought you to where you are today and your interest in channels.

Eran:    Absolutely. So I was born and raised in Israel, not far from Tel Aviv, and like most Israelis I’ve walked through the same milestones: graduating high school, serving in the Israeli Air Force, getting my first degree in engineering and landing my first job as a system engineer helping growing and serving channels worldwide. From that point forward, it was obvious that the channel would be a big, big part of my career success. It can’t be ignored and it will require a new and evolving set of skills I should hold to whether I’m in the system engineering position, a direct sales role or building and nurturing the channel ecosystem as a channel manager.

I was lucky enough and fortunate enough to work for some of the best companies and managers in the tech industry, starting with Cisco in both direct and indirect roles, serving service providers, enterprises and managing both first tier and second tier channels. Taking channels strategically into new technology domains where one of the most challenging tasks I ever came across. With NetApp back in 2006, I had the to opportunity to move across to the US building a pure channel engine out of Chicago from the ground up. Profiling, recruiting, enabling and growing new territories via diverse channel ecosystems that included SIs, value-added distributors, VARs, consulting firms and distribution. Bringing mostly innovation into the SME and SMB space.

The past couple of years I’ve been focusing on startups, taking them into new territories like North America, Europe, and the Far East. Penetrating into sectors which required a much smarter and I may say more focused 12-part approach, asking the tough questions and working on a detailed playbook prior to launching their partner program was my main challenge and goal.

Louis:   All right. And so what does Gainsight do?

Eran:    So Gainsight, so we are a channel focused growth advisory with a single mission in hand. We took on ourselves to assist growth stage companies to put their channel playbooks together while unlocking their channel partner potential. So we all know that the channel landscape changed dramatically over the past couple of years and is still changing. While new sets of channels are emerging and some are becoming obsolete. New business models require new sets of tools to be used in order to gain market share, understanding the customer buying habits. And get insight into their customer journey with and without the channel in place. So we believe we can bring value right there.

Louis:   I am kind of aware of the terrific tech sector in Israel, and that’s who you’re going to be working with, who you are working with. But for people who maybe aren’t as aware of it, maybe you could just tell them a little bit about what that’s like.

Eran:    I think this is a fascinating world we’re living in. We have more than 6,000 startups running in parallel in all segments of the markets. Every year there’s probably anywhere from 600 to 700 new additions, new startup additions in various fields. We’re leading the game here in many of the different technology front lines, like in cyber, automotive, AIs etcetera. And it’s really amazing to see how much talent and innovation this market can produce at any given time.

There’s a lot of smart people around me, a lot of VCs, and a lot of big companies like the Cisco’s of the world. And many others that are coming here to really tap into this excellent talent and develop and gain this access to the amazing, this amazing technology. Being part of it is really challenging because as you mentioned Israel is a very small country and the local market is very, very limited in terms of those company’s capability to sell locally. Every single founder and every single sales team are trying to think, as of the first steps of the startups on how to sell their offering and building their value proposition to the rest of the world.

Louis:   When then is the right time for a company to create and expand its channel program? A lot of the people who are listening to this are going to be in North America and Europe, but they’re going to have the same questions. When should they create a channel program? When should they really put the pedal down to expand that? So where do you think a company has to get to before it can start to use channels?

Eran:    This is a great question and it really gets into the other question that needs to be asked here is, What is my product? Who is my audience? What’s my customer habits, buying habits are? Where should I start bringing my solution and offering into the channel play if I’m looking from an Israeli perspective. You know, we’re looking into tapping into the rest of the world from the very first start. Looking at US-based companies or European companies, their markets are much larger. They have the luxury to get their product market fit and tap into the first couple of logos, gaining the first traction in house with their channel audience, with the MSPs of the world, with the VARs, with the SIs. And having a better understanding in what the value proposition will look like when taking it out of the country.

Louis:   So really, so it sounds like they really have to create a repeatable sales process internally and know what’s going to work before they can start to turn to channel partners to help them with the sales?

Eran:    Of course. That’s exactly what requires in my mind and you know, based on my experience with different startups that I have taken out of Israel. Those companies really need to filter their value proposition, who are their audience, who are their influencers. They have to understand the players outside of their comfort zone. Meaning, you know, if I will go now into the European Union and starting to build my channel offering, I would ask myself which countries should I start with? Looking into those kinds of questions really determines how that will roll out.

So for example, looking at the European nations there are 20 different countries. There are different markets with different strengths. And if you start to look in where to start, I will start probably in those countries that the language barriers will be the lowest. Their maturity in terms of the structure, the business structure will be the highest, like the UK, like the Scandinavian countries, like Norway and Sweden, going down into the German-speaking countries like Austria, Germany and Switzerland. And following then by the countries such as Spain, France, and Italy.

Louis:   You know in the US we kind of are a little more US-centric than many, certainly than Israel or many European countries are. And so I think we think of English as kind of a universal global business language. Do you find then that in many countries that’s not the case? You need to localize the language, you need to localize all of your marketing and be using the native languages in those countries?

Eran:    So this is a great, great insight and I think the most important things for any company that is looking to tap into Europe or any other geography other than the US really has to look into localization. By what I mean, localization is to look into the different country and how communication is being driven. In my mind it’s very important to get people on the ground that really speak the language, that have the connections in place with the channels that have the ability to bridge the communication gap, the language barrier. To better understand what motivates those channels and of course the customers, and whether the buying decision is being done in the right order, like in the US or the Far East, which is very much different as well.

Louis:   You know, you mentioned earlier that there are over 90 functions in the channel program, and we’re talking really about companies scaling up a channel program here not companies that already have a really robust global program. But you know, it’s something that I often hear in companies where they don’t have any experience with partner programs that they’re like, oh we’ll just get some partners and that’ll make it easy and you know, then they can sell for us. And they don’t realize how complex both setting up and scaling, but also supporting partners is, and how much you need to do and how much you need to provide to partners to really make them successful.

So you have to really help your companies that you’re working with understand the whole landscape of what’s involved in a partner program.

Eran:    Absolutely, it’s really about connecting the dots. You know, I mentioned 90 different operational silos that need to be put together before, in the middle, and after while you’re managing your partner program. You know, anywhere from the strategy to the design of the program, then to go through finding the right partners and recruit those partners. And then to jump into the training part of the program, which allows you to enable them and develop the program. And attached to it of course then the incentive and what motivates them. After that it’s really about how you sell with your partners. Do you sell through the partner, do you sell with a partner or do you sell to the partner itself? So figuring out the cost selling and the co-marketing of those companies. And of course at the end is just to wrap up everything and really manage and having the right insights in order to make your program much more fine and refine those different components that really make a difference from other companies and your competition.

Louis:   There’s a huge gap that you have to cross between recruiting a partner and making that partner successful and actually having them sell through any significant amount of your product. You were talking before about expanding from territory to territory, and you talked about the UK and Scandinavia and the German-speaking countries. What are some of the issues that companies can expect to encounter and pay attention to as they move into different territories?

Eran:    So this is a great question, and I think the challenges fall into a couple of silos. I think the first challenge that all the companies will face moving from one territory to another is really to find those partners that will cater to their customers and audience. It’s really about to figure out which will be those partners that will fall into the 20% bucket out of the 80/20 percent rule. It’s something that takes time. It’s time that takes a lot of efforts to look into the different set of partners — and maybe the distribution as well — that really will help you to jump quickly into those territories.

Moving from one territory to another, the challenge starts all over again. So if I build my territory starting from the UK, serving the UK, Ireland, islands etcetera, and I would like to move into the German-speaking countries, I will have to develop everything from the ground up. And remember that the UK is not yet into, is not part of the European community yet. And they’re subject to different kinds of laws and different kinds of limitations. Mainly in regards to the GDPR.

Louis:   Well, you know, that all could change dramatically in the next few months with Brexit. But basically what you’re saying is: choose your first few partners very carefully. You know, eventually you may have hundreds or thousands of partners and that 80/20 rule will come into play. But when you’re starting out you want to make sure that your first few partners really are going to be committed to your program and that they’re going to be successful.

Eran:    I agree, I totally agree with that. Most of the partners that I have come across starting to build the partner program for ground up will like you to sell alongside with you, and build this type of commitment from both sides. Understanding what motivates the partner and what works for the vendor. It’s really key to unlocking the potential of this partnership. There’s a lot of efforts that are being put in gaining or taking in the first set of customers together to better understand what the partner’s capabilities are, what the limitations are. What needs to be fixed, and what needs to be fixed quickly in order to avoid repeating mistakes over and over again. There is no second chance here, and you really have to be very focused on the deliverables, day in day out. And making sure that you are completely transparent with your partner in order to allow them to really take in your DNA as a vendor, specifically in small companies like startups or fast-growing companies in later stages.

Louis:   Well one of the things that I do is I mentor startups at MIT and we always are saying to them, your first few customers — your first 10 or 20 customers or so — you need to provide a level of service that is not scalable. Because you need to learn so much from them and you need them to be successful to become reference accounts. And it sounds like the same thing on the partner side. You need to have a level of interaction, and as you said, joint sales with those first few partners so that they’re successful. And you’re learning from them and you’re defining and building your program based on that feedback and what really works to make those first few partners successful.

Eran:    Absolutely. That’s the case.

Louis:   When you go from country to country, in the EU I assume the regulations are fairly uniform, but when you go from country to country or territory to territory where they aren’t, what kind of legal issues or regulations have you run into that companies have to deal with?

Eran:    I think the number one issue that most companies are facing is whether to build an entity within that country or not. And that really takes a toll on how your infrastructure in those countries will look like moving forward. Some countries will demand some sort of an entity within the EU which is sufficient enough for them to do business. Some countries don’t really care and they can pretty much work with any entity beyond the EU.

So looking into the GDPR for example, you know, you have to make sure that in certain countries your data resides within those countries, right? Your infrastructure has to be implemented within those countries, and you have to follow those rules and you’re subject to different laws and liabilities.

Louis:   So it sounds like you either are going to have to do a huge amount of research or you’re going to have to use someone with a lot of international channel experience who understands what those regulations and issues are in the different territories that would make your work much faster to do have that.

Eran:    Right. It makes sense to do that. Although there is a lot of master agents that can assist those companies to start their operation within those countries. They become a buffer, right, for those companies while they’re starting to look into business, different business models, and business relationship with local channels. And of course if they decide to do direct sales.

So there are different, and I guess the world is really very dynamic and extremely sufficient on that end, and can provide you with different sort of solutions that can help you kind of actually closing that gap.

Louis:   So what’s the biggest lesson, what should a company, what’s the number one thing that a company should keep top of mind when it starts to build an international channel? Or what’s the biggest mistake that it needs to avoid that you’ve seen?

Eran:    You know, there is a lot of potholes that you can fall into. I think the most important thing is of course to do less mistakes than your competitors. I think the number one thing that you need to take out of it is to play right your operational costs and operational management within those territories. You can go into one territory or another and experience a completely different type of engagement and success levels. It doesn’t mean that if you go into another territory you will face the same consequences or the same outcomes. And I think you have to remember that you know, going into those new territories takes time. It takes time and it takes a lot of effort both on the operational side and on the sales side as well.

So those companies need to understand that starting something from scratch really requires a lot of thinking and perseverance. And you have to make sure that everything is falling into the right places while you’re moving forward from acquiring the first set of channels going through the enablement phase. And, of course, at the end looking into capturing the first customers.

Louis:   Yeah, we’re getting near the end. What haven’t I asked you about that I should have asked you? What keeps you up at night? Or what keeps your clients up at night?

Eran:    I think what really wakes me up at night is, and of course my customers, is how fast the channel landscape has changed over the past couple of years. I think most of those founders and CEOs are looking into their market and seeking ways to find a new set of channels that will work for them and get them into their right audience. It’s amazing to see that there is a real gap between how the vendor perceives their market and how the channel perceives their market as well. And sometimes those two views of market do not correlate with one another. That means that there’s a need for someone and professionals to come in and close that gap, and making sure that those vendors are tapping into a new set of channels that are embracing, for example, the gig economy, the cloud economy. They have to understand that they have to use different tools to assist them in order to get to the market quicker, faster, bringing a lot of automation into those processes and making sure, again that their voice is being heard within the channels. And that the channels understand the DNA of the vendor.

Louis:   So how do you keep up, the business world is changing so rapidly, including channels as you just said. What blogs, podcasts, events, books, and so on do you use to keep up?

Eran:    You know, in order to really build up my knowledge and gain access to great insights within my community I read a lot of books. One of those books is, Making Channel Sales Works, which is a fantastic book. A book that really, really tapped into how to build your channel, what to anticipate, what the challenges are, how to really build a good foundation for your channel program.

Louis:   Yeah, that’s Marcus Cauchi.

Eran:    Absolutely.

Louis:   Yeah, and he’s been a guest on the podcast. That is a terrific book.

Eran:    It’s a terrific book, which I like it very much and I really embrace it. There’s other books that I’ve read recently. One of them is, Blueprints for a SaaS Sales Organization, which it’s an amazing book that looks into how to build your SaaS organization from the ground up.

Louis:   Who is that by?

Eran:    It’s by Fernando Pizarro and Jacco Van Der Kooij. It’s a fantastic book that really, really brings great insight on how to build your next SaaS sales and channel models.

Louis:   You might enjoy also, I don’t know if you spend much time on Twitter, I waste far too much time there. But I have a list of a few dozen channel thought leaders you might enjoy on my Twitter account too. Eran, how can people get in touch with you?

Eran:    Well, that’s easy. You can simply go into LinkedIn and find my profile or email me into my private email, which is eran at gainsight.io.

Louis:   Alright well thank you for joining us today Eran, and thank you all for listening. If you’re listening to this on Apple Podcasts, Google, Spotify, or another App, and you found the podcast interesting and useful, please leave a review. That will help other people learn about it too. Thanks for listening to the Software Channel Partner Podcast, and please subscribe and listen to future episodes.