Joe Barnes, Head of Channels at Cohesity, joins guest host Matt Hensler, Vice President of Customer Success at Allbound who is filling in for Jen Spencer, on The Allbound Podcast to discuss how to build and maintain a successful partner program from scratch. Welcome Joe.
Thanks Matt, I appreciate it and I hope Jen feels better soon.
So, Joe, I’ve mentioned your role and what Cohesity does at a really high level, but tell us a little bit more about the company and give our listeners some additional background on you.
Sure. So, a little about the company, Cohesity was founded about three and a half years ago. We launched our first product in general availability in late 2015, so we’ve had our product on the market for about a year. As you’ve mentioned, it’s a secondary storage platform that really is designed to consolidate a lot of the traditional data center architecture for companies. We have a platform with a single user interface, a single platform that can consolidate and archive Cloud workloads, test and development workloads, analytic workloads, and all of these different pieces of infrastructure that companies have to manage now can be greatly simplified and reduced into a single product platform with is Cohesity. We were founded by a gentleman named Mohit Aron, Mohit was one of the technical founders of Nutanix, a successful startup here in Silicon Valley, and prior to that he was one of the lead engineers at Google that helped create Google’s file system. So, a long successful track record in building products like this, now we’re out to revolutionize the secondary storage market. A little bit about my background, I have been in the industry my whole career pretty much. About half of my career has been at partners, and the other half has been at different storage vendors, most recently with EMC and prior to that I was at NetApp. My responsibility at Cohesity is to set a channel strategy and develop a channel program that will allow us to scale into the next billion-dollar storage company.
You mentioned EMC and you mentioned NetApp, I think I also saw MicroAge on your resume.
Yeah, that goes back a while.
So, you’ve seen the channel and partner programs from a lot of different perspectives. Give us a sense of what you’ve took from all of those experiences that you’ve threaded into the channel program at a startup like Cohesity.
It has been valuable to have experience on the partner side of the equation to really understand what a partner goes through; trying to manage multiple vendors, trying to figure out what the best technology is for their customers, and constantly having to keep up with all the different technologies and innovations as well as the different relationships they have with different vendors. So, having that insight into what would make it easier for a partner has been extremely valuable in this role. The partners want simplicity, they want predictability, they want an easy path to adopt a new technology, help understanding how to be successful selling it, and that was where I saw Allbound’s partner portal was very complimentary to what we were trying to produce for our partners in terms of giving them an easy path to adopt our technology and understand how it supports and benefits customers and how they can get up to speed and be effective selling it.
You mentioned that Cohesity first came out with its product late in 2015. Was there a partner program in place at all when you joined Cohesity earlier this year, or were you building it from scratch?
Pretty much building it from scratch. They had a partner agreement and a handful of partners signed up before I started, but they really didn’t have a formal strategy or channel program defined. So, that was step one, creating a basic channel program that we could launch, we called it the “revolutionary channel network” and we launched that in February of 2016, and really the goal at this point - these were the early days of Cohesity and I’m going to fondly remember these days as time goes by - there was no sense in over complicating the channel program at this stage. We were starting with entirely new relationships with partners, every partner is effectively equal and they are starting from no relationship with Cohesity, and have to learn the product, learn how to sell it, start to win business… and over time our program will mature and we will start to add different partner tiers and different ways to reward the top performing partners with additional rebates and co-ops and other such benefits.
Got it. So based on the experiences that you brought into developing the program, you touched on simplicity, what were some of the key themes of simplicity that you wove into the program? What were the things you tasked your team with doing to make sure partnering with Cohesity would be a simple endeavor?
I think the first step in any new relationship is establishing trust. Trust in our people that are going to be calling on the partners, establishing trust in the company and that even though we are a new company we are financially strong, we have a viable product and we are here building for the long term, and then ultimately trust in our product and our vision, the three of those have to be accomplished first. Then we move into how to help the partners be successful finding and qualifying new opportunities for us. Trying to do advanced training or teaching partners how to implement our technology at this early stage doesn’t make a lot of sense, unless you have a lot of business there to focus on. So, the first step was the strategy in terms of keeping it simple, let’s give partners an understanding of the differentiation we provide and the value we provide to their end user customers, and then give them a real easy path to learn how to sell our product and how to look for new opportunities. At this point we are focused on simplicity, but our platform is really revolutionizing the way people architect their data center. It’s not an easy simple concept, it needs some degree of explanation and training to even have a discussion with the customer about what this would mean for their business and why it’s so completely different from the way they have approached it in the past. So, helping getting the partners up to speed quickly on what can be a very complex message and discussion, and trying to make that very simple for them to at least start the conversation. We aren’t going to turn our partners into experts overnight, it’s going to be a process and it’s going to take some time. We want to give them just enough to be very good at sniffing out those first opportunities and then coming to us quickly when they think they have one, and let us get involved at that point with our sales team to do a more detailed qualification and have a more complex discussion with the customer to figure out if there is a real opportunity there. So, in terms of your question about how do we try to keep this simple, we want to be sure we aren’t overwhelming our partners especially in these new relationships. If we try to give them too much information too quickly it starts to make things overly difficult and the adoption rate is going to be lower than we would want to see.
So, this first year, I would imagine in addition to building that early pipeline, it’s been about expanding your number of partners. What’s been the experience for you to try and recruit and sign on partners who already have a lot of technology on their line cards, new technology in a slightly different value proposition then they’re used to, tell us what your experience has been in convincing these overwhelmed partners that they should add another technology to their mix?
Yeah, that’s a great question and very relevant to what we are doing and what we face. Every solution provider that’s a part of our channel today sells multiple products from multiple vendors, and keeping up with that is no easy task for a vendor. Some partners sell literally 400-500 different vendors products, some are more focused or specialized and sell maybe 30-40 different vendors products; either way we’re competing with the status quo and the encumbrance with over half our relationships with those partners, and it’s a heavy lift on our shoulders. We’ve got to show those partners they can make money selling Cohesity and we’ve got to show them there’s a big opportunity and a reason to do it, but it’s on our shoulders to do the heavy lifting and to help prove that concept. It’s really not until we help a partner win two, or three, or sometimes even four or five new opportunities or new customers with Cohesity that it starts to pick up momentum on its own. You start to see the partner being willing to start to make investments back into the relationship to try to accelerate the relationship. You start to see the “me too effect” in the partners, where we start to see success with a rep or maybe two reps and you’ve got a partner with maybe 20 sales reps, and as soon as the rest of the reps see them making money with Cohesity or they see how easy we made it for those partners, or how big the deal was, then they want to do the same thing, so then they take an active interest in trying to learn our product and get involved and start to find opportunities. Winning a partner to me is very much similar to the technology adoption lifecycle, where you have early adopter customers and then mainstream, and then as the product matures it becomes a laggard in the industry and so on. There’s only a certain portion of the industry that’s going to buy into a new technology or an emerging technology, so Cohesity faces that with our products. Then what we face from a channel standpoint in developing a partner is very similar. We’ve got to start working with a partner and start looking for those really early adopter type agents at the partner, sometimes its salespeople, sometimes engineers - mostly engineers - that are a little bit more progressive and eager to pick on an emerging type technology and start to learn it and put themselves out there with customers and look for opportunities to sell that product. Once we have more opportunities to work on with these partners the enablement almost becomes a self-fulfilling prophecy, because they have interested customers they need to learn more about it so they can talk effectively with those customers about it. This is where having a great portal really comes in handy, because we’ve now got 125 partners, this will probably grow over the next couple years to 200 or 250 partners, and we’ve got to have a way to effectively allow those partner reps and engineers to get up to speed at their own pace, at their own desire, any time they are ready to put the time in to learn. We’ve got to make it easily available and accessible and they’ve got to be able to get to what they need at their fingertips, so way more than my team would be able to cover. We just did a recent analysis of our top ten partners in the West, and our top ten partners the East U.S, and looked at the number of contacts we were focused on enabling, just on the top ten customers in the East and West and it was almost 1,000 individuals, reps, engineers, executives and the partners that we need to try to bring up to speed and increase the knowledge about Cohesity. If we applied similar numbers out to the 125 partners we are in the 4,000 or 5,000 people that we would have to try and enable, it’s much more than I’m going to be able to staff for and effectively do with my team on a manual basis.
You don’t have 1,000 channel managers that can spend one-on-one time with every single one of those contacts?
Not yet, and probably not ever, haha.
We do encounter questions from prospects or customers or just people out in the channel about how to staff and build out a channel team. You built one from scratch so what are some of the key components you would suggest people get in place when it comes to staffing a channel organization?
That’s a great question, and probably other heads of channel are not going to love my answer because we as a company have been fiscally conservative with our staffing at this point. We’ve only had two rounds of venture capital funding, so we are not in the full scale out mode yet with the business where I can just hire out all the resources I’d like to on my channel team. I have a very lean and mean team, it’s myself, I have a channel director for the West U.S., I have a channel director for the East U.S. and Canada, and I have one over in Europe, and it’s literally just the four of us. I’m pulling in help from my marketing team as needed, from my sales operations team as needed, you compare that to other startups in our industry and typically they start with almost double the number of channel people, usually there’s a channel marketing person and more channel managers involved to help get this thing started. I am proud of what we have accomplished with such a lean team. We wouldn’t have been able to do this and grow in the last ten months to 125 new partners - break a record for the most revenue of any storage startup ever – we wouldn’t be able to have the success we’ve had if we didn’t have some good partners and tools in place, I give Allbound’s portal a huge compliment in being a key piece to this.
We do definitely position the system as providing some bandwidth to those lean teams like you were describing, so we are glad that we’ve been effective in that capacity. You mentioned some other departments that you reach out to for resources. Tell us a little about the culture of the channel for Cohesity. Would you say that the entire organization is aligned to that effort you’ve got in play to grow through channel? How do those teams help resource you to be effective at delivering the content and the training and some of those other materials you mentioned you needed to enable those thousands of contacts as it grows?
Yeah, there’s a common saying in a lot of companies that every employee is a salesperson for the company, it’s your job to help sell and make the company successful. If you’re not the salesperson you probably support the salesperson, so you’re effectively a part of the sales team in some form or fashion. I like to think of it as not only is everybody a salesperson, but everybody is a channel person. Cohesity is committed to becoming 100% channel, and we are only going to be successful if our partners are successful, and if our partners are successful they are going to help us drive and scale the business, keep the hypergrowth rate that we are predicting going. We are looking to be the next billion-dollar storage company on the market and we want to get there faster than anybody has before.
One of the interesting data points that I came across about your program - given the number of partners you’ve added this year and the limited number of resources you have at your disposal - I’ve read that 83% of your partners have active pipeline or closed one business with Cohesity. That level of engagement and activity is not common, but I think everyone that has a channel would aspire to reach that level of activity and engagement that early on. What do you attribute that level of success to?
When I realized that I’d be getting started with a relatively small team I realized there’s only so much ground we can cover. There are only so many partners that we can actively focus on enabling and getting up to speed, so it was critical we didn’t dilute our focus too much and try to work with everybody equally. From day one, even though we were starting with no partners I didn’t view partners as all equal. Some partners are going to gravitate towards our technology and have an early adopter mindset and be able to take on our message and do something with it and bring it out to evangelize it to their customers quickly. We really need to give priority focus to those type of partners. Right? If I step back and I look at the big partners we worked with at EMC or NetApp, or just other large and successful ones, I do have a number that are on my wishlist in the future, that I’m sure at some point if they're not calling on us we’ll be calling on them at some point, but probably with many of them that’s going to be when we become a more mainstream type of technology. What I need is the fastest path to revenue that I can find right now through the channel. I need partners that give me more scale and reach and that are going to help us build pipeline, and are going to introduce our technology to new customers, so I got to find those partners that are ready to take action quickly. That was the first cut at how we looked at creating a focus. The second thing we did was we didn’t want to over saturate any one sales territory. We found we could be more successful having just two or three strategic partnerships in each market. So once we got to two or three of those early adopter type partners we really stopped the recruiting in those markets. We want to put our effort in those cities into those strategic relationships. I would rather spend all day with one of those partners than spend a day having meetings at five or six different partners, because we’ll be able to accelerate the adoption and the learning much faster that way. So, having a limited focus on the number of partners in each market, and making sure those we are focused on are the early adopter type partners has really been the key to success and allowed us to accelerate our benefits. Now, from the partner side, partners love hearing that their going to have somewhat of an exclusive and that they’re not going to have to compete with 10 or 15 or 20 that they typically run into in their marketplace. It’s a way for them to differentiate their story knowing that they’ve got a better opportunity to be unique to their customers, to offer them something no one can offer also helps create a more margin rich opportunity for them.
So, there’s a quality over quantity philosophy?
Absolutely.
Sounds like you sort of have this new technology and grant some level of exclusivity and that was part of the value proposition that you took. When you look out into next year 2017, when you start to expand and scale the program what are some of the priorities that you’re going to take on as you go into the next fiscal?
That’s a good question. I think the attitude right now is “if it’s not broken don’t try to fix it”. I'm eager to mature the partner program, I’m excited about when we get to the point where it makes sense to have a higher tier of partners, and we will add a new tier of premium partners, be able to create new rewards for those partners. We’ll get there at some point but there’s no sense trying to force our way into that and create complexity that doesn’t need to be there. So, we’re going to stick with keeping things simple, keeping the focus. The model of trying to stick with two or three strategic partnerships in each market where we have a sales team seems to be working really well, and that goes back to the productivity metric that you mentioned that 83% of our partners have either won a deal already or they're working on an active opportunity with us. We’ve got a very engaged partner channel, and it’s mainly because when we go into a market and hire a new sales rep to cover that territory we go into that market and look for those early adopter partners, and because they’re early adopters they’re more likely to start a discussion conversation right away and find an opportunity. We’re closing and winning our fair share of opportunities, so as long as we get the opportunities identified and into the pipeline we’re going to help our partners be successful and show them they can make money with us.
Joe, you’ve seen channel programs at the larger scale with organizations like EMC, you’ve started to build out your own program with Cohesity and you’re seeing that take off. For any of our listeners who are planning to start or build out a partner program for the first time, what are the top three tips you would tell them that they need to focus on to get started?
That’s a great question. I think having focus is absolutely critical. I think about what would have happened if we didn’t narrow our focus immediately on day one when we started this. Thinking about where we wanted to do business, who we wanted to do business with, the number of partners, the type of partners, but constantly keeping a narrow focus allows you to accelerate your results where you’re focused. And it’s a challenge in a fast growing startup to keep that focus. It’s almost a monthly or at least every other month exercise I've got to go through and step back and say “okay we are getting just naturally busy again, are we taking away from our focus, what should our focus be, what's working, where can we double down, what can we abandon or shift our available resources to better activities?” So, focus is number one for partners. I think if you're committed to building the channel or growing through the channel you want to make every person in your company feel like they can play a role. Take advantage, especially in the early days, of every available resource with whatever amount they can contribute. It’s funny when I go back up to our headquarters for a couple days, everyone sees me coming and they know I'm going to leave there after a day or two and they're going to have two or three things they’re going to be working on for the channel, it may not the main thing they were working on before but it's great. And I go out of my way to recognize people for helping, and I really do appreciate the help they give us and I make them feel like they’re building something. Include the company, don’t just limit your work to just your channel team, that would be number two. Number three I think is to look for ways to have leverage. The sooner you can put leverage in place for your team the better you’ll be. I look at the example with when we quickly realized we needed a really solid portal to be able to offer our partners as a way to give our partners means to get to collateral, information to get up to speed, training information, how to register deals and how to contact us quickly if they think they’ve found an opportunity. It couldn’t just be a phone call or email to the channel team or two or three us, we would quickly be a bottleneck to the business which I didn’t want. So, realizing that that was a priority because it takes time to know what you want in a portal and to put one in place, especially as a new company, but putting tools and resources like that in place helps give you leverage in your channel business, and that leverage is critical to keep driving the pace of the growth that you want.
Jen always closes out the podcast with what she calls the “Speed Round”. I’m going to pepper you with five questions and just give me your first thought response to them.
Let's go for it.
What’s your favorite city?
New York.
Animal lover? Yes or no?
Yes.
Mac or PC?
Oh, newly converted Mac actually.
Uber or Lyft?
Uber.
All expenses paid trip to where?
Italy.
Alright, so Joe I see a lot of your activity on LinkedIn, but for those who might be interested in reaching out to you in follow up to this podcast what's the best way for our listeners to connect with you?
Yeah, I would say look me up on LinkedIn, my contact information is posted there. If anybody is interested in learning more about Allbound and wants to hear about our experience and what we did or how great it has been working with the Allbound team I'm happy to share. I think it’s an important thing to go out of your way to help the people that are helping you, and the amount of help Allbound gives me and my team and Cohesity has been outstanding and I am happy to share that. You’ve already had me talk to a couple prospective customers and it's really been fun, because I enjoy getting to meet other people that are in heads of channel roles or channel marketing roles where they are trying to figure out these different challenges because it's valuable for me to, I always learn something from them during those conversations.
We are trying to build an ecosystem of collaborators and we are glad to have you as one of ours. Thank you for joining us today Joe, and thanks everyone for tuning in!
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