Partner programs can be a big source of revenue — for example, channel sales account for 80 percent of Cisco’s revenue. Now a startup called GrowSumo is working to make those programs easier to manage, particularly for businesses that don’t have Cisco’s resources.
GrowSumo is part of the current batch of startups at incubator Y Combinator. Co-founder Bryn Jones told me that the team was originally trying to build online collaboration tools, but “it turns out that we weren’t Slack.”
Even though that first product didn’t work out, it made Jones and his team aware of another opportunity. Apparently they had friends in the web development community who wanted to recommend the collaboration product to their clients, but their efforts were stymied by the lack of tools that would help them build a real partner program.
“In order to scale our business, we needed to manage this complicated partner program… and there was nothing on the market that supported that,” Jones said. “There were tons of referral marketing tools, like influencer tools, but there wasn’t anything that somebody could build their business around.”
He added that businesses with a significant partner program will eventually build their own in-house tools, but that can cost hundreds of thousands of dollars or more to maintain — a big expense for an early-stage startup.
So with GrowSumo, a company can create a page where new partners apply to work with them, then train and reward those partners while tracking their progress from a single dashboard. On the flip side, potential resellers can browse different companies on the GrowSumo platform and find products that their clients might be interested in.
GrowSumo is focused on businesses that are selling products to other businesses (rather than consumers). It’s already working with about 40 companies, including Swiftype, Layer, FreshBooks and Expensify. Jones said that on average, each company works with about 3,000 resale partners — those partners include independent consultants, web developers, human resources representatives and the most popular category, accountants.
He also said GrowSumo is learning more about the kinds of programs that do and don’t work. For one thing, the key to keeping partners involved is making sure they land their first sale quickly. (Well, relatively quickly for B2B — like, within the first few quarters.)
For another, he said that many of these resellers “are not actually hugely incentivized by commissions.” Instead, they care about finding products that make their clients happier.
“It’s really about creating a big marketplace, an easy-to-use place where they can discover new business opportunities,” Jones said.