The Sourced Revenue Framework
What Investment Banking & Partnerships have in common
My whole family are academics. My father has a PHD in Economics, my sister is getting a PHD in Organizational Behavior, and my mother is smartest and most well read of all of us. I am the black sheep who had no interest in a master or PHD.
Instead, I have always had an understanding that personally the most interesting path was in building systems, not just researching them.
It's why I started my career in Investment banking. While I found the moral failings of finance repulsive, the complex problems they solved and tools & models they built were mesmerizing.
Partnerships hooked me for a similar reason. It's a complex adaptive system that requires a combination of simple frameworks, statistical models, and asymmetric relationships to solve very real human problems.
Plus, the people are resoundingly lovely across the board.
That said, partnerships today often feels as full of fluff as a teddy bear.
Not all teddy bears are nice
I believe in order to find partnership success, individuals mut be a unicorn of talent: sales, marketing, account management, product, and leadership skills are all required to be successful.
However, in our drive to be jacks-of-all-trades we've lost the sharp edge that defines who we are as a function. To our peers outside of partnerships what they hear is fluff such as "we need more executive alignment", "we need to give to get", and "ecosystem led growth is the future".
These are closer to political slogans than business mantras.
We can't just be a cuddly teddy bear function. We need to take a stance on how we view the world and demand respect from the results we generate. While maybe we don't have to be Lotso, perhaps we can be more like Woody.
Some leaders in the partnerships space are doing a wonderful job - Partnership Leaders & HubSpot just released a fantastic data-driven view into the partnership landscape.
However, the world does not need more academics, it needs more plumbers. That is, we need more people who can solve our problems, not just more people that can tell us all the clever ways we have a problem.
We have a sales problem. Who is our Mario that's going to fix it?
The Direct Funnel is Dying
We don't think that ecosystem-led sales is a funnel.
There four clear canaries in the sales funnel coal mine showing us that all is not right in how we're creating revenue:
#1: A funnel has a natural start and end point - something that doesn't reflect most modern buyer experiences
While from a product and feature perspective, yes, there is a clear start and end point. However, from the customer experience, a stuttered service or software flow jeopardizes their career and possibly their business.
#2: A funnel is designed to manufacture results and struggles to iterate
Organizations are too complex and move too quickly to think one solution at a time. We now think in systems, and we're looking for how new solutions can amplify and streamline our existing system, not how it can replace the system as a whole.
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#3: A funnel rewards efficiency above sustainability
We start with the whole market in our funnel and nerd out on our ability to eliminate and efficiency qualify our leads. Most of us have already started using tools like Gong , Outreach , Salesloft , 6sense , and many more to stop the spray and pray appraoch. However, we stop using them once somebody becomes a "customer". It's no surprise SaaS is struggling with churn.
#4: A funnel prioritizes growth above profits
Cheap VC money and the Peter Thiel influence of monopolies being the optimal strategic goal have led organizations to prioritize growth above profits. It may not sound like a big deal, but why do our sales targets focus on revenue and never profit? Why is the CFO the one that has to cover the bad-news story of how we grew 80% and still are not profitable? Thank goodness that story is quickly changing.
The Connect Donut Lens
If the direct funnel is dying, what reflects the future?
I did a semester at Cambridge in the UK my Junior year and during that time I went to a talk by Kate Raworth, an economist who had written a book called "donut economics".
In the book she focuses on how we as a society need to focus on sustainable growth, not just growth for growths sake. She used a simple donut visual to show how too little growth (the donut hole) and too much growth (outside the donut) were not sustainable and our focus should instead be on finding growth that exists between those realms (the donut).
As we talk with our users, the more it becomes clear that ecosystems are a fragile and continual process - they are a donut.
We should grow with our customers and fit within their systems. The profit is not in the initial sale but in the resulting relationship. In an ecosystem-led world, our "pipelines" should focus not on growth & acquisition, but on adoption & expansion.
Successful customers breed more successful customers. While huge pipeline funnels may make us emotionally feel safe, lets not forget what we care about is conversion.
The Connect Donut Stages
The connect donut is about driving long-term sustainable customer value, using partners to integrate into the soul of the customer value chain, and demanding market attention.
The connect donut is not linear because your customer or opportunity has iterative and complex needs across their organization. Instead, the donut is a scale where all 9 ecosystem motions can be weighed to determine your customer, partner, and market health.
In a nutshell, the stages are:
Together they make up the sourced revenue framework - that is, the process & platform that is required to source revenue from your partnerships.
Our software is designed to reflect this new world and help you source revenue from parters.
We know that an iterative, complex project management, interdependent relationship-focused process does not fit into Salesforce. Plus, the dirty secrete we all know is that outside of Sales Leadership and Ops none of us want to be in salesforce in the first place.
We are not the only tool you need. In fact, we don't even think software is the answer to partnerships - we think that's people. However, we do firmly believe that we give your people the framework and platform to be their best self and help your revenue team create profit not just growth.
If you'd like to talk about the Relevance software or our service, please DM me directly and we'd be happy to send you more detail on how you can implement the above.