How to build a partner ecosystem in the US? Or the Chicken and Egg problem.

As a European startup with a deep engineering culture, it might seem obvious for you to tackle the US market with an indirect strategy.

Indeed, you have a great product, but you lack:

  •  the team,
  •  the market knowledge 
  • localized marketing and sales materials
  • and/or the investment capacity 

to sell directly. Plus, you must find local partners to provide integrations, logistics or customer support services. 

For all these reasons, you might think that the safe option for you is to find the right partner (agent, distributor, integrator, OEM partner) to develop your US business while you focus on what you do best: developing a great product!

This makes total sense, but unfortunately, it seldom works. We are facing here a typical “chicken and egg problem”:

  • To sign your first customers, you need to show your ability to deliver the service by having trusted and trained local partners. And if you work with enterprises, you might need to offer several options so your customers won’t feel locked in.
  • To sign your first partners, you need to show traction and ideally you can  bring leads to the table.

How to make it happen?

Here a few tips to get the ball rolling:

1- Do your homework and pick a small market

2- Start with a small and well defined ecosystem on this market

3- Articulate your value proposition for customers and partners

4- Start with quick wins from customers

5- Approach smaller / niche partners to begin with

1- Do your homework and pick a small market

By tackling a smaller market, you might just need to have a few references and/or a couple of partners to solve the chicken and egg market.

For instance if you are an authentication software company, you might want to focus on the tier 2 pharmaceutical companies in a specific geographic zone in the US. This way, you can start having the required credibility to close more deals with a limited number of customers and partners.

2-Or start with a small and well defined ecosystem on this market

Another way to handle the problem is by leveraging an ecosystem. For instance if you have ecommerce software, you might want to tackle one of the large ecommerce platforms such as BigCommerce or Shopify. Or if you are a martech company, you might want to tackle the salesforce or hubspot community. In that case, you need to build or leverage an existing integration, get approved on a market place and start recruiting partners and customers of this ecosystem. 

3- Articulate your value proposition for customers and partners

Your first customers and your first partners might take a chance on you if they think that your value proposition is clearly above any of your local competitors (with stronger marketing / sales / customer success presence). If they already have partnerships with your competitors, they need to have good reasons to jeopardize the relationship. Don’t be shy and help them understand your value proposition in a very explicit way!

  • Explain what sets you apart from your competitors
  • Describe which customers love you and why
  • Make them feel they will participate in your US journey with privileges to influence your local product roadmap.

4- Start with quick wins from customers

Your first customers are the most complicated to win. Try to think of quick wins. Could you sign with the US subsidiaries of your European customers?

Do you have large references in Europe that will ring a bell to US customers?

Is there a way you can provide a high discount to your first customers to get the ball rolling?

Ideally, you can bring the lead to your favorite identified partner, and leave it to him all the professional services fees that your team will spend, to allow him to cover onboarding & training time.

5- Approach smaller / niche partners to begin with

Large distributors or integrators might not be a good fit for you to begin with, even if they show interest. You will probably be added to their list of providers and they will not spend much time training their employees or generating leads for you as long as they don’t see the value.

Smaller companies focused on the segment / ecosystem you picked might be more motivated to play as they might see an opportunity to differentiate themselves or launch a new practice with you. 

Unhappy partners of your competitors might be an excellent bet as they might have ready leads for you as long as you are able to convince them about your competitive advantage.

In any case, you absolutely need to spend the right time with these first partners to train them, support them and give them all the tools to succeed with first customers.

Once you score your first wins with customers and partners, it will get easier for you. We recommend that you keep doing brand awareness and lead generation by yourself to feed your partners with leads. Make sure to develop the right tools to help your partners succeed.