July 8, 2025 • 27 mins
Most founders dream of scaling fast, but resellers can quietly kill your margins, brand control, and growth velocity. In this episode, David and Chris break down real-world pitfalls from founders who handed off sales too early—and paid for it. If you're considering a reseller strategy to accelerate revenue, this is your warning shot (and what to do instead).
PODCAST LINKS
Website:
https://www.startupdifferent.com
YouTube Channel:
https://www.youtube.com/@StartupDifferent
Apple Podcasts:
https://podcasts.apple.com/us/podcast/the-startup-different-podcast/id1707691707
Amazon Music:
https://music.amazon.com/podcasts/8db9bd4d-b64a-42f6-a3b5-3ad8c8578e96/the-startup-different-podcast
Castbox:
https://castbox.fm/ch/5595828
iHeartRadio:
https://www.iheart.com/podcast/269-the-startup-different-podc-123590551/
Overcast:
https://overcast.fm/itunes1707691707
Pocket Casts:
https://pca.st/249a4hrn
SOCIAL
LinkedIn:
https://www.linkedin.com/company/startup-different
Instagram:
https://www.instagram.com/startupdifferent/
YouTube Channel:
https://www.youtube.com/@StartupDifferent
Chapters
00:00 Introduction and Context of Reseller Partnerships
06:33 Challenges Faced with Reseller Partnerships
12:39 The Importance of Direct Customer Interaction
21:48 When Reseller Partnerships Can Work
26:37 Final Thoughts on Reseller Strategies
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
So what was the worst part? Because there's a lot of bad
parts here. Was the worst part the price tag
or knowing how much they were selling it for, which those are
two related things. Or was it the demos that you had
to do? Or was it the training of these
guys or what? Like there's a lot of problems.
With real. Money.
(00:20):
Turn that grind into a joy ride.This is an episode where we
might actually use some. Expletives.
Some some colourful. Language.
I will send a sternly worded e-mail to them.
So we're talking about resellersand specifically like love them,
your startup. Should you like partner with
(00:40):
resellers? Is this a good idea?
Bad idea. The big question, but I am cool
to take this on with you, yeah. Do you wanna?
Hit me with a story or somethingto get into this or do you have
anything? Sure.
Tell me about Chris's sweet life.
So. Past life I.
Guess yeah. So I got I got a few stories on
this, but OK, so I wanna I wannago back to the early days take
(01:02):
it back, you know, Chris's firstlike startup, you know, foray.
So do you remember the document management software that I
built? Century files?
Yeah, yeah, back. In like.
Long time ago, like I was still in school, I was, I think it was
in second year computer science.Wasn't the tagline, was that the
tagline software for business? Or was that Oh no, that was for
(01:24):
cut comment. General software for business or
software superiority? Yeah, sick.
It's cool. Like air superiority.
That was cool. I mean, we were just a couple of
nerves, but it was pretty cool. Anyway, whatever.
OK, what about? So anyways, document management
software. So remember I built this our dad
owns a photocopier dealership. So this the idea here was our
(01:45):
father. That our father, Yes.
But gone. So they sold photo copiers,
photocopiers, had scanners to scan.
Yeah, the work on the top of allof them.
So the idea was simple. It's like, OK, we're gonna,
like, take all the paperwork, scan it into, like, a database,
make it searchable. And so you don't have to store
the paper in like filing cabinets you can remember.
(02:07):
I did this for a magical summer I remember.
Doing yeah, yeah. So that product when we built it
because you know there seemed tobe this tie end of these
photocopy dealerships and photocopier dealerships are a
thing. There you go to the city and
there's you wanna buy a photocopier, You're gonna
probably buy it from a photon. Zerox.
Whatever, because the bloody machines always Janko.
(02:29):
You need people to. Turn around Malta.
Yeah, yeah. And fix them and stuff like
that. So they're there were
photocopier dealerships was a thing.
So, Kyocera, yeah, sorry, I'm trying to think of all my
photocopier. You just name dropping for like.
Please tag this so. Yeah.
OK, hey, turns out starting a business can really suck.
(02:51):
Figure out how to make it suck less with startup different.
Find it on Amazon, Audible, and Kindle.
But so bottom line is we're like, OK, we got this document
management software works well with photocopiers.
Let's sell it through photocopiers, photocopier
dealers. And you know, what I learned
through that incredibly difficult process is that the
(03:11):
skill set to, you know, sell andservice a photocopier is very
different from the skill set required to install software and
train people on software and demo software, that kind of
stuff. And.
Like hardware versus software, It's a complicated demo because
hardware component and a software.
Component, yeah, you know, and like training and, you know,
support and those types of things become really hairy.
(03:34):
So anyways, went through that process where I ended up on that
whole thing. Is it it, it very much felt like
by the end it just wasn't working well.
It was not a good fit from a partnership perspective, even
though on the face of it, it looked like it was.
But the, you know, we, we had togive massive amounts of margin
away to the photocopier. Deal are we talking about?
(03:57):
Like I would sell it to them. I think it was $3000 for this
software one time purchase. It wasn't SAS type and I think
they were selling. There's your first.
Problem. Yeah, I think they were
typically selling it for more than 10, probably in the 1520
range. Holy shit.
Yeah, yeah, so and weirdly. They like 6X being the price.
Yeah, yeah, but weirdly they weren't that motivated to sell
it even with Massive. Wasn't a big enough number in
(04:19):
general. 3 grand? I don't know, maybe back then it
was a. Bigger, I think it was.
It was more like. Just like 18, yeah.
The skill set wasn't there, so they were.
Always. Intimidating.
Oh shucks, we sold one. Now we might have to actually.
Do the. Words, yeah, whereas like the
photocopiers, they knew how to kind of deal with them like they
could they could solve that. They didn't have the people that
(04:39):
could really do the software piece.
So anyways, it went OK, like we sold the software, made hundreds
of thousands of dollars per year.
Yeah, doing this. And it's all actually that's
interesting because it's all onetime.
So you right your revenue every year you had to have?
The hustle, that was brutal though.
Yeah, terrible idea. Yeah, I know.
And that's what ultimately droveme probably out of it was that
(05:02):
we had no recurring revenue and we would provide updates and
would provide free support and stuff like that.
Oh, man, we were just getting crushed.
You're giving it away. But software as a service wasn't
a thing back then. This was back in the days when
you would go to Staples and buy a copy of Microsoft Word one
time. You would keep it for like ever.
That disk. You would probably use that disk
and install it. And have everybody's.
(05:22):
Computer that you knew with the little software key and
everything, yeah. So like, video games are like
that too. Yeah, it was a totally
different. Game like wouldn't you charge
like a lot more upfront knowing that you would have to service
it for multiple years? Yeah, maybe.
But we were using the revenue from subsequent years to support
the people from previous years. Like because we never really had
(05:45):
like any type of maintenance feeor anything like that.
Right, Sorry, keep going. That was both, both like a, a, a
pro and a con. But the other piece too was that
I usually, you know, cause it was just small company.
I had a few employees at one point, but generally me had to
do most of the demos. So not only how many.
Dealers, did you have? I think 50 or so that would
(06:05):
actually be actively selling. It like what, 10 salespeople per
actively selling it. OK, Yeah.
Actually, there's probably about250 signed up as dealers, but
like maybe 50 of them. Actually sold any They all like
territories. And no, we did.
We tried to do like a named gameaccount.
Yeah, bang. Which didn't work.
It was always. Always crossing.
Yeah, yeah, I mean, we'll talk about I'll definitely.
(06:25):
I'm looking. For that, yeah.
OK anyways, so really tough situation.
So tried the reseller network there and just took a lot of
wounds, licked a lot of wounds getting through it.
Ultimately we ended up selling that that product to another
company and they they I think. It's that's around for that.
Yeah, Stora. Yeah.
(06:46):
So, you know, and I hope they pivoted it to a Better Business
model to be able to make some money on.
It So what was the worst part? Because there's a lot of bad
parts here. Was the worst part the price tag
or knowing how much they were selling it for which those are
two related things? Or was it the demos that you had
to do or was it the training of these guys or what?
(07:06):
Like there's a lot of problems. With this.
You have like 5 huge issues withthis.
Business. So the big one on the pricing,
like I didn't mind that they were making money when it where,
where I had a hard time with thepricing was that the customer
expectations were of a $20,000 purchase whereas I had seen
$3000 of revenue whereas and. You know, let me let me tell you
(07:29):
a little story on that. I think if if you give, if you
sell anything for any amount of money, customer expectations are
always batshit crazy and I'll tell you why I had, as you know,
a fabulous umbrella rental business for weddings.
This is real Graham, So heads upand I had.
It you gotta explain this business first, You can't.
Just say, yeah. So basically during my wedding,
it was like a rainy day and we were out in beautiful Niagara on
(07:52):
the lake here in Ontario. And we were, it was like off and
on clouds. And we were really worried.
We like need umbrellas for both the people and the wedding
party. And then we were like, OK, well,
we'll get some umbrellas. And we got absolutely raked over
the coals because it was like short term, you know, neither of
them as quickly as possible. I think we paid an ungodly.
(08:13):
White it needed. To be white and we paid so much
of those umbrellas, like 10 umbrella umbrellas for like 1000
bucks, like 100 bucks umbrella some crazy weddings, man
weddings. So I was so mad about this that
I created a business with my wife where we would we had a
distributor of these umbrellas. We bought some of them
wholesale. We were then going to rent them
(08:33):
to, to wedding groups and you know, get the a lot of money out
of the same umbrella. We also did sell them as well,
just for what it's worth. So I like, we had basically 1
customer. It was going, it was actually of
interest and it was actually theplace where we got married.
They were more interested in buying the umbrellas surprised
because they didn't want to pay any recurring rental costs for
these umbrellas at every wedding.
So it's not good to actually target the venue for what it was
(08:54):
worth. You wanted to target the wedding
party, which is a lot harder to find.
But anyway, so we did it and youknow, we ordered them and then
we had they rather they send an order and we were late because
FedEx kind of basically like blew it or I probably picked the
wrong shipping option or something.
And and it was, it was a $200 order and it was late and I got
(09:16):
somebody super pissed at me overthe phone and dad and I was
like, I'll give you $200 back. Like they are.
It's hell. So any I would just start by
saying, no matter what customer expectations are always about
you crazy. Doesn't matter how much money
you can even be working for themfor free.
I don't know. I I find sometimes it's just
like the expectations are weird as hell.
Yeah, so, but so anyway, I will say that, but that on a personal
(09:37):
level for you must have been madfrustrating that these guys were
able to to command 6X7X your price, right, their wholesale
price and I bet you couldn't raise the price on them.
No, no, they would actually get the deal and then they would not
want to pay the 3000. They would then say I gotta deal
but I want a better. Deal for Oh my God.
(09:58):
I just honestly, honestly I was,I was getting beat up on all
sides and like every time somebody wanted to buy for me,
it was like there was a price list, but it was a negotiation
on starting. Going to contract.
Yeah, yeah. No, no.
You didn't sign a. Contract.
No, it was, well, no, we did have a contract, but they just
(10:18):
still say, well, I don't know, maybe I won't buy the.
Maybe I'll go get a different one and show the customer a
different piece of software. And then they would start
negotiating on that $1000. So it was tough.
It was like that. I think that's the way that
industry kind of worked. They negotiated on everything.
Yeah. And they, it was the margin.
Exhausting, right? It's exhausting to like every
interaction. Well, I just did the demo for
(10:39):
you. I'm gonna do all this support
and you're gonna make a ton of money.
And now also you want more money.
It was exhausting working through them.
So like, that's a bad example ofworking with a reseller where
it, it didn't really work out. Just misalignment channel
conflict. A bunch of things just weren't,
(11:01):
weren't working out. And you know, the other thing
too is I they would never tell us who the customer was.
OK, this is OK, so we can. We can, we can.
We would have people come to hold on a SEC, have people come
to us for support and we would kind of figure out, OK, they
must be a customer because they obviously haven't.
Had the product right. They also found out that we
didn't do a great job of securing the software licenses,
(11:22):
so we would sell a software license key using the same key.
We had some dealers where they actually sold the same key model
times as well. So like this is a terrible
example of resellers gone gone wild.
Not fair, not girls. Weird reference.
Yeah, but but definitely like from my perspective, I'm like so
(11:43):
beat up on it that I, I'm not a big fan of the reseller.
So do you OK? Do you have an example of where
our reseller works well? I was gonna say to you so my old
boss hope Macintosh trade after we were required by Ray Mobile
safety. She came from VMware and I just
found VMware pretty interesting company.
They're like, you know, they cando like an instance of Microsoft
Windows running on like a. Mac Really cool, Really cool
(12:04):
time. Called a virtual machine space
big business and I think something like 9095% of their
deals are through partnerships. Really.
Yeah. So, so I have a couple of
different thoughts on this. OK, I would suggest, and
actually we read about this in sort of different the book the
Mythbusting Blueprint for your multi $1,000,000 business that
is an award-winning book that that that I thought was the
(12:25):
basically here's the deal with you.
This is my opinion. I have some data behind this,
but it also varies based on industry.
I'm just gonna have a few caveats here.
Different industries, different problems being solved, different
circumstances. Most of the time, almost always
you need to talk to the customer, you need to manage the
customer interaction, you need to own the customer relationship
and you need to own the process of billing the customer.
(12:48):
Are there successful software companies out there that use
channels? Yes.
OK. Is it hard to get that going?
Yes. Is it hard to also get your
direct sales force going? Yes.
OK is the answer to all of thesethings.
It is always hard. OK, so for me, when I looked at
this, I was like when we were starting, when we were doing App
Armor, there were times when we had opportunity, we actually had
(13:10):
a few dealers who did nothing, but I was.
Going to say we had no sales. Through literally 0 sales and
the process was very heavy in terms of educating, yeah, trying
to convince them we were worthwhile.
That's a product. Trying to get them to sell the
product effectively, which they really didn't try to understand
(13:33):
the circumstances in which they need to sell product.
Here's the other thing. Have so many.
I'm getting totally overwhelmed.There's so many different
reasons why I don't think it's agood idea for a small company.
The biggest one being is that like you need that feedback from
the customer to iteratively improve your product.
That feedback from your salespeople is extremely
valuable. What if it's kind of like a game
of like broken telephone sometimes where it's like, oh,
they need it to do this or that,and then you build it and like,
(13:54):
we didn't want to do that, we want to do this.
Yeah, that kind of thing. But the spirit of it is usually
good. You usually can identify market
trends coming from multiple customers because I'm doing a
couple of demos a day or your sales teams doing a couple
demos. A day hearing what?
You're hearing what's out there,right?
And then you can make better decisions.
You will not hear that. You are tone deaf to the market.
Yeah, when you have a channel partnership, that's the first
(14:15):
thing. Second thing is that Channel
partners are not just selling your stuff, right?
Almost, never almost up because then they're basically your
Salesforce, right? So, so if we understand that
they're going to market with a vast product offering, what
makes them think about you? I know you know this answer.
What makes them think about you?Yeah, yeah.
(14:36):
How much of the good, how rich are they going to be by selling
your. Yeah, what?
They're only gonna get so much time to talk to protections.
So little. Time.
So they're gonna talk about the thing that's gonna make them the
most, theoretically. They have an ongoing
relationship that's like decent with their prospects, customers,
that sort of thing, right? So they've got, let's say they
do every two weeks they do a call.
It's pretty normal. A sorry account executive
(14:58):
activity is you're going to, youknow, keep in touch with your
people, keep working those deals, finding opportunities
with existing accounts and and making new ones.
So they are gonna have a 30 minute meeting every two weeks.
So in that 30 minutes, how are you gonna get 5 to 10 minutes of
that time for them to talk aboutyour thing?
It's all about how much they canmake on your product.
And here's the thing, you're everybody knows this.
So everybody else that that Channel is selling everybody,
(15:20):
all these other companies that are also working through that
Channel partner, they're also juicing the margins.
So there is this race to the bottom of who is willing to
bleed the most to get these guysto talk about your thing.
Right. Gotcha.
OK. OK, I really don't like that
either. And yeah, you've already
mentioned some of the other conflicts.
They come back to you. Yeah.
And also, in some cases, and this is a big one, I think for
(15:42):
some startups, this it also creates exclusivity over the way
in which you can sell your product.
So I remember with Sentry file, Yeah, you thought about this.
You're like, I hate these dealers.
Yeah, let's let's go around them.
Direct to consumer, direct to small business, sell online
platform. And you didn't want to do it
because you knew that would cause the inevitable shitstorm
as soon as you beat one of the dealers.
(16:05):
Because obviously you would. Because you would be close to
your cost rather than 7X your cost.
I would double my revenue and bestill doing the same amount of
work and probably fewer headaches, but I couldn't.
But I wasn't getting the people out there actually talking about
it. Yeah.
You're buying a photocopy. I've ever thought about
paperless office document. Management, it's tough because I
think the way that that product.Would work.
(16:27):
Would. Be through comping the
photocopier dealership yeah likethat's a challenging way to go
to market but it made sense for that particular business but I
think in your case put you at such a tremendous.
Disadvantage. So I'm trying to find a, a
situation where I'm like a reseller model is actually
beneficial for everybody. Like everybody like we, we've
(16:48):
just given examples about terrible situations on reseller
model stuff. I thought there was something
when we were acquired where there was some way that there
were these organizations on. Like, yeah, yeah, I know
exactly. We're going, OK, you tell the
story because you know this. Story if you are actually this
exists in Canada, but I'm going to use the US example if you are
a company it sells to public organizations so that is
(17:10):
universities, some medical groups government basically any
level you usually have to go through additional hoops to be
able to sell to them and one of those hoops is you might one way
that you would do this let's just say you were doing it the
old fashioned way as a company is you would go to something
like the GSA for so for federal contracts so the.
(17:31):
General Services Administration.They have this system called the
GSA Advantage. These are all these vendors who
have basically agreed to sweeping terms that benefit the
government, but that make you asa vendor, like a federally
recognized vendor, right? Hugely advantageous, right?
Because then when you go to pitch a university, you say,
(17:51):
good news, we're on this federalcontract system.
You can benefit from that even as at a state level.
That's why I picked federal whenwhen we did this, I picked the
federal level. You can go on a state by state
basis. There's the, what's the one in
Texas, the Texas DIR department of something, information
resources or something and you could be listed on.
There's the same idea, but we just went federal and so then we
(18:13):
could win deals a lot more easily.
And this is the weird thing people think OHS universities or
whatever, these organizations got a credit card, just the
credit card. You're wrong.
The way this works is they go tothe purchasing groups.
Purchasing groups goes, who the hell is this?
What's your tax information? Where are you located and where
are your staff? What's you know?
So once you do one of these big contracts, they get on one of
these big contract systems, you avoid all that.
(18:34):
For small companies, this isn't always tenable.
Like I did this pretty late in our journey, you know, because I
was like, I wanted more federal contracts.
And, and so the way that that you can get around this is there
are companies that basically go and they are registered with all
these various systems and you work with them downstream and
say, hey, I'm trying to sell Sinkinson University in whatever
(18:58):
state and you are on that state system or on the federal system.
We are not. Can you generate a quote for us?
We will give you 10% of the deal.
You are just literally making a God damn quote and sending it
off to them because we are not on that system, but you are and
they can do that and they can secure the contract and you can
be like another named party on that contract.
(19:20):
So the whole thing just flows through this facade of verify.
But I love that because it's like all you do is just.
That's the business. To put your logo on this quote.
AT&T makes an unbelievable amount of money doing this.
Really unbelievable. They have a huge vendor network,
even just public safety. First net you heard of?
(19:41):
Yeah, it's like this telecom network for.
For first responder, right? Yeah.
But part of that is also a vendor network, Yeah, that is
like you sign up with AT&T is like a dealer for whatever the
hell it is you sell. No.
And you need quotes and that wasit.
That was our extent of our exposure with AT&T to anything
when. We were at rave.
And it was just, hey, we need a quote for this thing and we're
(20:01):
not on that contract system. Can you hook us up and be like,
yeah, cool. For like 15%, We're happy to do
it. And in some cases, this is like,
you know, could be $1,000,000, a150 grand.
They're making doing. Absolutely.
Nothing. Gosh, yeah.
So we. Should start up a business that
all we do is we have nothing andwe just get on all these state.
Control. I love regulatory businesses.
Really. Yeah.
Well, like, not in like not on apersonal level, but on the level
(20:23):
of like making a ton of money effectively like a captive
audience. Yeah.
So in that case, it's captive companies.
Yeah. But you know, I'm not sure what
it's called. Somebody was telling me about
this. This is another podcast, I'm not
that you would list to a different podcast, but there's
another podcast where it's like for Cpas, they can listen to it
and get their hours for their hourly for their annual CPI and
(20:45):
stuff like that is a genius freaking idea.
Like dude, so. So at the end of the day, there
is actually some ways that this reseller idea does work out, but
I think you have to go into it with very clear eyes on what the
reseller is going to do, which is almost nothing.
Almost. Yeah, you might.
(21:06):
Have to have an entire infrastructure to support the
reseller yeah, I think you can call lots of different things
effectively just call it like revenue operations.
You have people who are behind the process of educating.
So the sales enablement is the skill or the process of getting
other people to sell your that you need to have that as a fully
functional apparatus. Here's the thing I wanted to say
(21:27):
the the other situation where you do see these relationships
working often is in companies that have exhausted a lot of the
market, like they've saturated their market through direct
sales and there's just pockets of the market that they can't
get access to easily. And that's when they start
looking for channel partners. So when you are VMware or by the
way, conversely, there might also be a cost cutting benefit
(21:49):
if you have like an army of sales people, but you can find a
way to get to those markets because you have and
recognition, right, people wannabuy VMware.
Yeah, you barely have to, Mark. You don't need a salesperson to
even demo that anymore because everybody knows what it is.
Yeah, there's a good cost benefit.
They're probably too. Yeah.
But generally speaking, you haveto have just like a lot of brand
leverage that a small company does not have.
(22:09):
And Frank, and you miss out again on so much valuable market
insight that like you must, I can't stress this enough, you
must do founder lead sales to start your business.
Yeah. And, and honestly, that carries
through the whole thing, like all the way.
I mean, I I was selling app Armor to rave in the end, if you
want to think of it that way too.
So. Yeah, well, resellers, I tried
(22:30):
my best to some pros. No, there aren't a ton.
He can work in very specific circumstances for large
companies. Yeah, I think like Oracle knows
ones too do a lot of that. Like that's not unusual, but
it's just, you know, I think about what was that a single
wire? Remember those guys Informacast?
OK, so this was a nice one. These guys are in emergency
notification. They were all through that and
(22:52):
they they actually did get success doing that.
But their apparatus, their entire sales effort was through
these dealers and it was just getting these guys to sell and
they had a ton of them signed up.
You remember there was single wire and there was also signal
wire. There was another company, like
almost the same. Yeah.
(23:13):
I don't know how. That remember there.
So here's a fun fact folks, on there were two app armors.
There was the App Armor, the Linux based yeah, security thing
in Europe, and then there was usin North America.
And yeah, we had fun times with them.
I see you. So was it Zeus?
We see you, Doctor Seuss. That was their.
That was their company. Anyway, yeah, we're on the
(23:34):
bridge, so at the end of the dayI feel like there's a thousand
other things I wanna do before. Signing OK, can I can I back out
one more thing? So I don't wanna be done yet.
I have a few. I love this Top I love sales
topics. Sure.
I think markets where you also need an integrator, it can make
a lot of sense. So what do I mean?
By somebody to turn a wrench. Or turn a wrench if you have a
(23:55):
hardware focused solution. Now, The funny thing is because
your, So what you mentioned the photocopiers is kind of has the
signals of that. So I'm not sure where the nuance
lies here, but there are some like, let's say you, you sell
camera software like like I'm going to say in public safety
because what I know, so setting up security cameras in a
location, somebody ultimately needs to put that up, right.
(24:17):
You will have relationships withintegrators, these people who
are these other companies that their job is to go and install
the cameras. They can be very valuable sales
channels because they have existing relationships with the
customers, with these customers in an area where they've already
done some of this install perhaps for even for
competitors. Yeah.
So it is kind of a weird zone, but it is kind of like, hey,
(24:40):
that makes a lot of sense to me.If you can get the people who
are installing it and have thoserelationships to also talk about
your product a little bit more, that can be.
Helpful. Like, I bought that cable
machine for my home gym, and I bought it through like a
reseller, and that manufacturer of that fitness equipment used
that reseller because it's like too heavy.
Like the customer can't do the installation on their own.
(25:01):
And that makes sense that there's a reseller network
there. But yeah.
You know, historically car dealerships, right?
I mean, car dealerships are probably an example of an
unbelievably successful channel partnership where it's all
franchised like dealership locations.
People hate going to car dealership.
They do hate going. That I do too, and you can see
the disruption of that because the experience got so terrible
(25:23):
for end users. Yeah, but you know, car
dealerships, I don't know if youknow the like financials buying
car dealerships, they're fuckingcrazy.
They make like hundreds of millions a year like some some
really big car dealerships in like major cities I thought.
They didn't do. That all they do Crazy.
I think that's really like most.Smart sales or profit like
revenue or? Profit, revenue, top line.
Yeah. But profit number I think is
(25:43):
like that emergence are razor thin.
Probably cause you have to buy alot of inventory and yeah I.
Feel like the manufacturer is. Like and I don't think the card,
I think if the car manufacturerscould go straight to the market,
they would. But they're so invested in this
approach because they started itin the year like 1910, you know
what I mean? Like whereas the Tesla shows up
and they're going straight to consumer.
I think, I think in a way that'swhere aside from the other
(26:06):
technology we're diverting here from the technological gap
between like the old car manufacturers and the sort of
the new ones, the Tesla. Is like.
This direct to consumer model I think will be extremely
disruptive to the GM. So I think that's coming, I
think. Yeah, I think so too.
I don't think that's. Actually, like eddies just don't
need the service that they used to.
Like, yeah, I think there's a yeah, there's a changing
(26:29):
mechanical landscape, too, you know, which is probably gonna be
problematic for a lot of other small businesses that work sort
of on the sides of these things.Anyway, I digress.
I think there are circumstances where it can work.
But for the purposes of us and our audience today, like, folks,
if you can avoid it, you should avoid it.
Like go straight to market. Being software guys, it didn't
work. Absolutely don't do it with
(26:50):
software. Yeah, if you can avoid it, for
the love of God, even if you do,even if you do direct sales for
a while and you find it's not working for you and you wanted
to channel, that's cool. But you need to make the effort
first of going direct to market so you can understand customer
objections. Why you know why you can't do
direct. Yeah, 1000%.
Agree. Right.
Like if you if you just go straight to the dealers, man,
(27:10):
you're not gonna learn anything.And by the way, the dealers are
gonna tell you whatever you wantto hear because they want more
products that they can sell, like just to have more arrows in
their quiver. But they're not necessarily
gonna do it or they're gonna do it really poorly.
It's just my hot tea, so. Yeah.
Cool. This episode is brought to you
by the Dealerships Association of Canada.
Yeah. It's so cool.
(27:32):
Pause complete. Pod.
Complete. Good job man.
Alright, see you later. Got it up let's get it rolling.
Big ideas, money holder, hustle,smart dream.
So why turn that grind into a? Joy Ride.
So what was the worst part? Because there's a lot of bad
parts here. Was the worst part the price tag
or knowing how much they were selling it for, which those are
two related things. Or was it the demos that you had
to do? Or was it the training of these
guys or what? Like there's a lot of problems.
With real. Money.
(00:20):
Turn that grind into a joy ride.This is an episode where we
might actually use some. Expletives.
Some some colourful. Language.
I will send a sternly worded e-mail to them.
So we're talking about resellersand specifically like love them,
your startup. Should you like partner with
(00:40):
resellers? Is this a good idea?
Bad idea. The big question, but I am cool
to take this on with you, yeah. Do you wanna?
Hit me with a story or somethingto get into this or do you have
anything? Sure.
Tell me about Chris's sweet life.
So. Past life I.
Guess yeah. So I got I got a few stories on
this, but OK, so I wanna I wannago back to the early days take
(01:02):
it back, you know, Chris's firstlike startup, you know, foray.
So do you remember the document management software that I
built? Century files?
Yeah, yeah, back. In like.
Long time ago, like I was still in school, I was, I think it was
in second year computer science.Wasn't the tagline, was that the
tagline software for business? Or was that Oh no, that was for
(01:24):
cut comment. General software for business or
software superiority? Yeah, sick.
It's cool. Like air superiority.
That was cool. I mean, we were just a couple of
nerves, but it was pretty cool. Anyway, whatever.
OK, what about? So anyways, document management
software. So remember I built this our dad
owns a photocopier dealership. So this the idea here was our
(01:45):
father. That our father, Yes.
But gone. So they sold photo copiers,
photocopiers, had scanners to scan.
Yeah, the work on the top of allof them.
So the idea was simple. It's like, OK, we're gonna,
like, take all the paperwork, scan it into, like, a database,
make it searchable. And so you don't have to store
the paper in like filing cabinets you can remember.
(02:07):
I did this for a magical summer I remember.
Doing yeah, yeah. So that product when we built it
because you know there seemed tobe this tie end of these
photocopy dealerships and photocopier dealerships are a
thing. There you go to the city and
there's you wanna buy a photocopier, You're gonna
probably buy it from a photon. Zerox.
Whatever, because the bloody machines always Janko.
(02:29):
You need people to. Turn around Malta.
Yeah, yeah. And fix them and stuff like
that. So they're there were
photocopier dealerships was a thing.
So, Kyocera, yeah, sorry, I'm trying to think of all my
photocopier. You just name dropping for like.
Please tag this so. Yeah.
OK, hey, turns out starting a business can really suck.
(02:51):
Figure out how to make it suck less with startup different.
Find it on Amazon, Audible, and Kindle.
But so bottom line is we're like, OK, we got this document
management software works well with photocopiers.
Let's sell it through photocopiers, photocopier
dealers. And you know, what I learned
through that incredibly difficult process is that the
(03:11):
skill set to, you know, sell andservice a photocopier is very
different from the skill set required to install software and
train people on software and demo software, that kind of
stuff. And.
Like hardware versus software, It's a complicated demo because
hardware component and a software.
Component, yeah, you know, and like training and, you know,
support and those types of things become really hairy.
(03:34):
So anyways, went through that process where I ended up on that
whole thing. Is it it, it very much felt like
by the end it just wasn't working well.
It was not a good fit from a partnership perspective, even
though on the face of it, it looked like it was.
But the, you know, we, we had togive massive amounts of margin
away to the photocopier. Deal are we talking about?
(03:57):
Like I would sell it to them. I think it was $3000 for this
software one time purchase. It wasn't SAS type and I think
they were selling. There's your first.
Problem. Yeah, I think they were
typically selling it for more than 10, probably in the 1520
range. Holy shit.
Yeah, yeah, so and weirdly. They like 6X being the price.
Yeah, yeah, but weirdly they weren't that motivated to sell
it even with Massive. Wasn't a big enough number in
(04:19):
general. 3 grand? I don't know, maybe back then it
was a. Bigger, I think it was.
It was more like. Just like 18, yeah.
The skill set wasn't there, so they were.
Always. Intimidating.
Oh shucks, we sold one. Now we might have to actually.
Do the. Words, yeah, whereas like the
photocopiers, they knew how to kind of deal with them like they
could they could solve that. They didn't have the people that
(04:39):
could really do the software piece.
So anyways, it went OK, like we sold the software, made hundreds
of thousands of dollars per year.
Yeah, doing this. And it's all actually that's
interesting because it's all onetime.
So you right your revenue every year you had to have?
The hustle, that was brutal though.
Yeah, terrible idea. Yeah, I know.
And that's what ultimately droveme probably out of it was that
(05:02):
we had no recurring revenue and we would provide updates and
would provide free support and stuff like that.
Oh, man, we were just getting crushed.
You're giving it away. But software as a service wasn't
a thing back then. This was back in the days when
you would go to Staples and buy a copy of Microsoft Word one
time. You would keep it for like ever.
That disk. You would probably use that disk
and install it. And have everybody's.
(05:22):
Computer that you knew with the little software key and
everything, yeah. So like, video games are like
that too. Yeah, it was a totally
different. Game like wouldn't you charge
like a lot more upfront knowing that you would have to service
it for multiple years? Yeah, maybe.
But we were using the revenue from subsequent years to support
the people from previous years. Like because we never really had
(05:45):
like any type of maintenance feeor anything like that.
Right, Sorry, keep going. That was both, both like a, a, a
pro and a con. But the other piece too was that
I usually, you know, cause it was just small company.
I had a few employees at one point, but generally me had to
do most of the demos. So not only how many.
Dealers, did you have? I think 50 or so that would
(06:05):
actually be actively selling. It like what, 10 salespeople per
actively selling it. OK, Yeah.
Actually, there's probably about250 signed up as dealers, but
like maybe 50 of them. Actually sold any They all like
territories. And no, we did.
We tried to do like a named gameaccount.
Yeah, bang. Which didn't work.
It was always. Always crossing.
Yeah, yeah, I mean, we'll talk about I'll definitely.
(06:25):
I'm looking. For that, yeah.
OK anyways, so really tough situation.
So tried the reseller network there and just took a lot of
wounds, licked a lot of wounds getting through it.
Ultimately we ended up selling that that product to another
company and they they I think. It's that's around for that.
Yeah, Stora. Yeah.
(06:46):
So, you know, and I hope they pivoted it to a Better Business
model to be able to make some money on.
It So what was the worst part? Because there's a lot of bad
parts here. Was the worst part the price tag
or knowing how much they were selling it for which those are
two related things? Or was it the demos that you had
to do or was it the training of these guys or what?
(07:06):
Like there's a lot of problems. With this.
You have like 5 huge issues withthis.
Business. So the big one on the pricing,
like I didn't mind that they were making money when it where,
where I had a hard time with thepricing was that the customer
expectations were of a $20,000 purchase whereas I had seen
$3000 of revenue whereas and. You know, let me let me tell you
(07:29):
a little story on that. I think if if you give, if you
sell anything for any amount of money, customer expectations are
always batshit crazy and I'll tell you why I had, as you know,
a fabulous umbrella rental business for weddings.
This is real Graham, So heads upand I had.
It you gotta explain this business first, You can't.
Just say, yeah. So basically during my wedding,
it was like a rainy day and we were out in beautiful Niagara on
(07:52):
the lake here in Ontario. And we were, it was like off and
on clouds. And we were really worried.
We like need umbrellas for both the people and the wedding
party. And then we were like, OK, well,
we'll get some umbrellas. And we got absolutely raked over
the coals because it was like short term, you know, neither of
them as quickly as possible. I think we paid an ungodly.
(08:13):
White it needed. To be white and we paid so much
of those umbrellas, like 10 umbrella umbrellas for like 1000
bucks, like 100 bucks umbrella some crazy weddings, man
weddings. So I was so mad about this that
I created a business with my wife where we would we had a
distributor of these umbrellas. We bought some of them
wholesale. We were then going to rent them
(08:33):
to, to wedding groups and you know, get the a lot of money out
of the same umbrella. We also did sell them as well,
just for what it's worth. So I like, we had basically 1
customer. It was going, it was actually of
interest and it was actually theplace where we got married.
They were more interested in buying the umbrellas surprised
because they didn't want to pay any recurring rental costs for
these umbrellas at every wedding.
So it's not good to actually target the venue for what it was
(08:54):
worth. You wanted to target the wedding
party, which is a lot harder to find.
But anyway, so we did it and youknow, we ordered them and then
we had they rather they send an order and we were late because
FedEx kind of basically like blew it or I probably picked the
wrong shipping option or something.
And and it was, it was a $200 order and it was late and I got
(09:16):
somebody super pissed at me overthe phone and dad and I was
like, I'll give you $200 back. Like they are.
It's hell. So any I would just start by
saying, no matter what customer expectations are always about
you crazy. Doesn't matter how much money
you can even be working for themfor free.
I don't know. I I find sometimes it's just
like the expectations are weird as hell.
Yeah, so, but so anyway, I will say that, but that on a personal
(09:37):
level for you must have been madfrustrating that these guys were
able to to command 6X7X your price, right, their wholesale
price and I bet you couldn't raise the price on them.
No, no, they would actually get the deal and then they would not
want to pay the 3000. They would then say I gotta deal
but I want a better. Deal for Oh my God.
(09:58):
I just honestly, honestly I was,I was getting beat up on all
sides and like every time somebody wanted to buy for me,
it was like there was a price list, but it was a negotiation
on starting. Going to contract.
Yeah, yeah. No, no.
You didn't sign a. Contract.
No, it was, well, no, we did have a contract, but they just
(10:18):
still say, well, I don't know, maybe I won't buy the.
Maybe I'll go get a different one and show the customer a
different piece of software. And then they would start
negotiating on that $1000. So it was tough.
It was like that. I think that's the way that
industry kind of worked. They negotiated on everything.
Yeah. And they, it was the margin.
Exhausting, right? It's exhausting to like every
interaction. Well, I just did the demo for
(10:39):
you. I'm gonna do all this support
and you're gonna make a ton of money.
And now also you want more money.
It was exhausting working through them.
So like, that's a bad example ofworking with a reseller where
it, it didn't really work out. Just misalignment channel
conflict. A bunch of things just weren't,
(11:01):
weren't working out. And you know, the other thing
too is I they would never tell us who the customer was.
OK, this is OK, so we can. We can, we can.
We would have people come to hold on a SEC, have people come
to us for support and we would kind of figure out, OK, they
must be a customer because they obviously haven't.
Had the product right. They also found out that we
didn't do a great job of securing the software licenses,
(11:22):
so we would sell a software license key using the same key.
We had some dealers where they actually sold the same key model
times as well. So like this is a terrible
example of resellers gone gone wild.
Not fair, not girls. Weird reference.
Yeah, but but definitely like from my perspective, I'm like so
(11:43):
beat up on it that I, I'm not a big fan of the reseller.
So do you OK? Do you have an example of where
our reseller works well? I was gonna say to you so my old
boss hope Macintosh trade after we were required by Ray Mobile
safety. She came from VMware and I just
found VMware pretty interesting company.
They're like, you know, they cando like an instance of Microsoft
Windows running on like a. Mac Really cool, Really cool
(12:04):
time. Called a virtual machine space
big business and I think something like 9095% of their
deals are through partnerships. Really.
Yeah. So, so I have a couple of
different thoughts on this. OK, I would suggest, and
actually we read about this in sort of different the book the
Mythbusting Blueprint for your multi $1,000,000 business that
is an award-winning book that that that I thought was the
(12:25):
basically here's the deal with you.
This is my opinion. I have some data behind this,
but it also varies based on industry.
I'm just gonna have a few caveats here.
Different industries, different problems being solved, different
circumstances. Most of the time, almost always
you need to talk to the customer, you need to manage the
customer interaction, you need to own the customer relationship
and you need to own the process of billing the customer.
(12:48):
Are there successful software companies out there that use
channels? Yes.
OK. Is it hard to get that going?
Yes. Is it hard to also get your
direct sales force going? Yes.
OK is the answer to all of thesethings.
It is always hard. OK, so for me, when I looked at
this, I was like when we were starting, when we were doing App
Armor, there were times when we had opportunity, we actually had
(13:10):
a few dealers who did nothing, but I was.
Going to say we had no sales. Through literally 0 sales and
the process was very heavy in terms of educating, yeah, trying
to convince them we were worthwhile.
That's a product. Trying to get them to sell the
product effectively, which they really didn't try to understand
(13:33):
the circumstances in which they need to sell product.
Here's the other thing. Have so many.
I'm getting totally overwhelmed.There's so many different
reasons why I don't think it's agood idea for a small company.
The biggest one being is that like you need that feedback from
the customer to iteratively improve your product.
That feedback from your salespeople is extremely
valuable. What if it's kind of like a game
of like broken telephone sometimes where it's like, oh,
they need it to do this or that,and then you build it and like,
(13:54):
we didn't want to do that, we want to do this.
Yeah, that kind of thing. But the spirit of it is usually
good. You usually can identify market
trends coming from multiple customers because I'm doing a
couple of demos a day or your sales teams doing a couple
demos. A day hearing what?
You're hearing what's out there,right?
And then you can make better decisions.
You will not hear that. You are tone deaf to the market.
Yeah, when you have a channel partnership, that's the first
(14:15):
thing. Second thing is that Channel
partners are not just selling your stuff, right?
Almost, never almost up because then they're basically your
Salesforce, right? So, so if we understand that
they're going to market with a vast product offering, what
makes them think about you? I know you know this answer.
What makes them think about you?Yeah, yeah.
(14:36):
How much of the good, how rich are they going to be by selling
your. Yeah, what?
They're only gonna get so much time to talk to protections.
So little. Time.
So they're gonna talk about the thing that's gonna make them the
most, theoretically. They have an ongoing
relationship that's like decent with their prospects, customers,
that sort of thing, right? So they've got, let's say they
do every two weeks they do a call.
It's pretty normal. A sorry account executive
(14:58):
activity is you're going to, youknow, keep in touch with your
people, keep working those deals, finding opportunities
with existing accounts and and making new ones.
So they are gonna have a 30 minute meeting every two weeks.
So in that 30 minutes, how are you gonna get 5 to 10 minutes of
that time for them to talk aboutyour thing?
It's all about how much they canmake on your product.
And here's the thing, you're everybody knows this.
So everybody else that that Channel is selling everybody,
(15:20):
all these other companies that are also working through that
Channel partner, they're also juicing the margins.
So there is this race to the bottom of who is willing to
bleed the most to get these guysto talk about your thing.
Right. Gotcha.
OK. OK, I really don't like that
either. And yeah, you've already
mentioned some of the other conflicts.
They come back to you. Yeah.
And also, in some cases, and this is a big one, I think for
(15:42):
some startups, this it also creates exclusivity over the way
in which you can sell your product.
So I remember with Sentry file, Yeah, you thought about this.
You're like, I hate these dealers.
Yeah, let's let's go around them.
Direct to consumer, direct to small business, sell online
platform. And you didn't want to do it
because you knew that would cause the inevitable shitstorm
as soon as you beat one of the dealers.
(16:05):
Because obviously you would. Because you would be close to
your cost rather than 7X your cost.
I would double my revenue and bestill doing the same amount of
work and probably fewer headaches, but I couldn't.
But I wasn't getting the people out there actually talking about
it. Yeah.
You're buying a photocopy. I've ever thought about
paperless office document. Management, it's tough because I
think the way that that product.Would work.
(16:27):
Would. Be through comping the
photocopier dealership yeah likethat's a challenging way to go
to market but it made sense for that particular business but I
think in your case put you at such a tremendous.
Disadvantage. So I'm trying to find a, a
situation where I'm like a reseller model is actually
beneficial for everybody. Like everybody like we, we've
(16:48):
just given examples about terrible situations on reseller
model stuff. I thought there was something
when we were acquired where there was some way that there
were these organizations on. Like, yeah, yeah, I know
exactly. We're going, OK, you tell the
story because you know this. Story if you are actually this
exists in Canada, but I'm going to use the US example if you are
a company it sells to public organizations so that is
(17:10):
universities, some medical groups government basically any
level you usually have to go through additional hoops to be
able to sell to them and one of those hoops is you might one way
that you would do this let's just say you were doing it the
old fashioned way as a company is you would go to something
like the GSA for so for federal contracts so the.
(17:31):
General Services Administration.They have this system called the
GSA Advantage. These are all these vendors who
have basically agreed to sweeping terms that benefit the
government, but that make you asa vendor, like a federally
recognized vendor, right? Hugely advantageous, right?
Because then when you go to pitch a university, you say,
(17:51):
good news, we're on this federalcontract system.
You can benefit from that even as at a state level.
That's why I picked federal whenwhen we did this, I picked the
federal level. You can go on a state by state
basis. There's the, what's the one in
Texas, the Texas DIR department of something, information
resources or something and you could be listed on.
There's the same idea, but we just went federal and so then we
(18:13):
could win deals a lot more easily.
And this is the weird thing people think OHS universities or
whatever, these organizations got a credit card, just the
credit card. You're wrong.
The way this works is they go tothe purchasing groups.
Purchasing groups goes, who the hell is this?
What's your tax information? Where are you located and where
are your staff? What's you know?
So once you do one of these big contracts, they get on one of
these big contract systems, you avoid all that.
(18:34):
For small companies, this isn't always tenable.
Like I did this pretty late in our journey, you know, because I
was like, I wanted more federal contracts.
And, and so the way that that you can get around this is there
are companies that basically go and they are registered with all
these various systems and you work with them downstream and
say, hey, I'm trying to sell Sinkinson University in whatever
(18:58):
state and you are on that state system or on the federal system.
We are not. Can you generate a quote for us?
We will give you 10% of the deal.
You are just literally making a God damn quote and sending it
off to them because we are not on that system, but you are and
they can do that and they can secure the contract and you can
be like another named party on that contract.
(19:20):
So the whole thing just flows through this facade of verify.
But I love that because it's like all you do is just.
That's the business. To put your logo on this quote.
AT&T makes an unbelievable amount of money doing this.
Really unbelievable. They have a huge vendor network,
even just public safety. First net you heard of?
(19:41):
Yeah, it's like this telecom network for.
For first responder, right? Yeah.
But part of that is also a vendor network, Yeah, that is
like you sign up with AT&T is like a dealer for whatever the
hell it is you sell. No.
And you need quotes and that wasit.
That was our extent of our exposure with AT&T to anything
when. We were at rave.
And it was just, hey, we need a quote for this thing and we're
(20:01):
not on that contract system. Can you hook us up and be like,
yeah, cool. For like 15%, We're happy to do
it. And in some cases, this is like,
you know, could be $1,000,000, a150 grand.
They're making doing. Absolutely.
Nothing. Gosh, yeah.
So we. Should start up a business that
all we do is we have nothing andwe just get on all these state.
Control. I love regulatory businesses.
Really. Yeah.
Well, like, not in like not on apersonal level, but on the level
(20:23):
of like making a ton of money effectively like a captive
audience. Yeah.
So in that case, it's captive companies.
Yeah. But you know, I'm not sure what
it's called. Somebody was telling me about
this. This is another podcast, I'm not
that you would list to a different podcast, but there's
another podcast where it's like for Cpas, they can listen to it
and get their hours for their hourly for their annual CPI and
(20:45):
stuff like that is a genius freaking idea.
Like dude, so. So at the end of the day, there
is actually some ways that this reseller idea does work out, but
I think you have to go into it with very clear eyes on what the
reseller is going to do, which is almost nothing.
Almost. Yeah, you might.
(21:06):
Have to have an entire infrastructure to support the
reseller yeah, I think you can call lots of different things
effectively just call it like revenue operations.
You have people who are behind the process of educating.
So the sales enablement is the skill or the process of getting
other people to sell your that you need to have that as a fully
functional apparatus. Here's the thing I wanted to say
(21:27):
the the other situation where you do see these relationships
working often is in companies that have exhausted a lot of the
market, like they've saturated their market through direct
sales and there's just pockets of the market that they can't
get access to easily. And that's when they start
looking for channel partners. So when you are VMware or by the
way, conversely, there might also be a cost cutting benefit
(21:49):
if you have like an army of sales people, but you can find a
way to get to those markets because you have and
recognition, right, people wannabuy VMware.
Yeah, you barely have to, Mark. You don't need a salesperson to
even demo that anymore because everybody knows what it is.
Yeah, there's a good cost benefit.
They're probably too. Yeah.
But generally speaking, you haveto have just like a lot of brand
leverage that a small company does not have.
(22:09):
And Frank, and you miss out again on so much valuable market
insight that like you must, I can't stress this enough, you
must do founder lead sales to start your business.
Yeah. And, and honestly, that carries
through the whole thing, like all the way.
I mean, I I was selling app Armor to rave in the end, if you
want to think of it that way too.
So. Yeah, well, resellers, I tried
(22:30):
my best to some pros. No, there aren't a ton.
He can work in very specific circumstances for large
companies. Yeah, I think like Oracle knows
ones too do a lot of that. Like that's not unusual, but
it's just, you know, I think about what was that a single
wire? Remember those guys Informacast?
OK, so this was a nice one. These guys are in emergency
notification. They were all through that and
(22:52):
they they actually did get success doing that.
But their apparatus, their entire sales effort was through
these dealers and it was just getting these guys to sell and
they had a ton of them signed up.
You remember there was single wire and there was also signal
wire. There was another company, like
almost the same. Yeah.
(23:13):
I don't know how. That remember there.
So here's a fun fact folks, on there were two app armors.
There was the App Armor, the Linux based yeah, security thing
in Europe, and then there was usin North America.
And yeah, we had fun times with them.
I see you. So was it Zeus?
We see you, Doctor Seuss. That was their.
That was their company. Anyway, yeah, we're on the
(23:34):
bridge, so at the end of the dayI feel like there's a thousand
other things I wanna do before. Signing OK, can I can I back out
one more thing? So I don't wanna be done yet.
I have a few. I love this Top I love sales
topics. Sure.
I think markets where you also need an integrator, it can make
a lot of sense. So what do I mean?
By somebody to turn a wrench. Or turn a wrench if you have a
(23:55):
hardware focused solution. Now, The funny thing is because
your, So what you mentioned the photocopiers is kind of has the
signals of that. So I'm not sure where the nuance
lies here, but there are some like, let's say you, you sell
camera software like like I'm going to say in public safety
because what I know, so setting up security cameras in a
location, somebody ultimately needs to put that up, right.
(24:17):
You will have relationships withintegrators, these people who
are these other companies that their job is to go and install
the cameras. They can be very valuable sales
channels because they have existing relationships with the
customers, with these customers in an area where they've already
done some of this install perhaps for even for
competitors. Yeah.
So it is kind of a weird zone, but it is kind of like, hey,
(24:40):
that makes a lot of sense to me.If you can get the people who
are installing it and have thoserelationships to also talk about
your product a little bit more, that can be.
Helpful. Like, I bought that cable
machine for my home gym, and I bought it through like a
reseller, and that manufacturer of that fitness equipment used
that reseller because it's like too heavy.
Like the customer can't do the installation on their own.
(25:01):
And that makes sense that there's a reseller network
there. But yeah.
You know, historically car dealerships, right?
I mean, car dealerships are probably an example of an
unbelievably successful channel partnership where it's all
franchised like dealership locations.
People hate going to car dealership.
They do hate going. That I do too, and you can see
the disruption of that because the experience got so terrible
(25:23):
for end users. Yeah, but you know, car
dealerships, I don't know if youknow the like financials buying
car dealerships, they're fuckingcrazy.
They make like hundreds of millions a year like some some
really big car dealerships in like major cities I thought.
They didn't do. That all they do Crazy.
I think that's really like most.Smart sales or profit like
revenue or? Profit, revenue, top line.
Yeah. But profit number I think is
(25:43):
like that emergence are razor thin.
Probably cause you have to buy alot of inventory and yeah I.
Feel like the manufacturer is. Like and I don't think the card,
I think if the car manufacturerscould go straight to the market,
they would. But they're so invested in this
approach because they started itin the year like 1910, you know
what I mean? Like whereas the Tesla shows up
and they're going straight to consumer.
I think, I think in a way that'swhere aside from the other
(26:06):
technology we're diverting here from the technological gap
between like the old car manufacturers and the sort of
the new ones, the Tesla. Is like.
This direct to consumer model I think will be extremely
disruptive to the GM. So I think that's coming, I
think. Yeah, I think so too.
I don't think that's. Actually, like eddies just don't
need the service that they used to.
Like, yeah, I think there's a yeah, there's a changing
(26:29):
mechanical landscape, too, you know, which is probably gonna be
problematic for a lot of other small businesses that work sort
of on the sides of these things.Anyway, I digress.
I think there are circumstances where it can work.
But for the purposes of us and our audience today, like, folks,
if you can avoid it, you should avoid it.
Like go straight to market. Being software guys, it didn't
work. Absolutely don't do it with
(26:50):
software. Yeah, if you can avoid it, for
the love of God, even if you do,even if you do direct sales for
a while and you find it's not working for you and you wanted
to channel, that's cool. But you need to make the effort
first of going direct to market so you can understand customer
objections. Why you know why you can't do
direct. Yeah, 1000%.
Agree. Right.
Like if you if you just go straight to the dealers, man,
(27:10):
you're not gonna learn anything.And by the way, the dealers are
gonna tell you whatever you wantto hear because they want more
products that they can sell, like just to have more arrows in
their quiver. But they're not necessarily
gonna do it or they're gonna do it really poorly.
It's just my hot tea, so. Yeah.
Cool. This episode is brought to you
by the Dealerships Association of Canada.
Yeah. It's so cool.
(27:32):
Pause complete. Pod.
Complete. Good job man.
Alright, see you later. Got it up let's get it rolling.
Big ideas, money holder, hustle,smart dream.
So why turn that grind into a? Joy Ride.
Popular Podcasts
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.