Interview with Ted Finch of Chanimal. WiseSaaS Leadership Series Interview.
This week SaaSMAX sat down with Ted Finch, Chanimal CEO and Strategic Advisor to SaaSMAX for an in-depth interview with one of the top channel and marketing experts in the high-tech industry.
Channel Marketing WiseSaaS
Ted Finch is one of the top channel and marketing experts in the high-tech industry, having launched over 450 products into the channel for over 200 vendors (including Microsoft, HP, Adobe, Corel, Intel, Aldus, Epson, AOL, WordPerfect, Novel, Autodesk, Citrix, IBM, Western Digital, Sony, Disney, Lotus, DCA, Trusted Data, Netscape, iOmega, plus has consulted with over 170 Fortune 500, Mid-sized and start-ups including several storage software and hardware vendors). Ted is a former VP of Sales and Marketing with TAC (now called MarketStar), a VP at Goldmine Software, VP at Harcourt, Sr. VP at Motorola, VP at GE. In addition, he helped form Red Storm Entertainment with Tom Clancy, and led the marketing team that published Netscape Navigator, the #1 best-selling software in the world at the time that inaugurated the .com era.
How many years have you been in the SaaS world and how would you describe your niche of expertise in SaaS?
I have worked in the SaaS space for about 9 years and specialize in building reseller channels (for over 400 products (including Microsoft, Adobe, HP, Autodesk, GE, Motorola, plus a lot of start-ups, including about 100 SaaS products so far) for retail, online, VARs and system integrators- on premise and SaaS companies.
My first real experience with SaaS started 9 years ago in 2006 when I was helping Edit.com with their SaaS-based site editing service, then soon after with a SaaS-based medical records company. Then I started helping InterSpire move from Australia to the US market with their SaaS based FAQ, website building and SaaS shopping cart platform- now known as BigCommerce (with over $50 million in fairly recent VC funding).
After that, the market started to open for SaaS, where I was working with marketing automation software (several times), integrated suites (Work, etc.), project management and even remote-access dev tools. In 2008, about a third of my channel business was with SaaS companies, and in 2009 with email-like apps (VaporStream), project management, niche products (like tire tracking and remote feedyard management), and more CRM and document management SaaS apps.
Since then, I started presenting throughout the country at SaaS University (where I met Dina with SaaSMax) and now about half the companies I help (I work with about 6-16 companies at a time) are SaaS.
What’s your take on how mature the SaaS ecosystem is today? Where is the sector still growing and evolving?
The SaaS market is the fastest growing sector, further evident by the volume of companies approaching me to help them build a reseller, affiliate or alliance channel. I’m not an industry analyst that evaluates market segments for a living, but the greatest growth I see for channels is from applications that lend themselves to collaboration with teams and customers (CRM, PRM, Project Management, Time and Billing, Accounting, HR, online databases and even online storage). I have seen some really interesting SaaS applications for some highly vertical niche products (like the feedyards and tire tracking that I mentioned earlier).
I wrote the marketing plan and headed the team that launched Netscape Navigator- the beachhead that launched the Internet (similar to Salesforce cracking open the SaaS market). The SaaS market appears to be growing similarly, although much more organically. Perhaps too many VCs got burned with the Internet craze, so now they are investing in companies that first have a business model.
Are there any commonalities and correlations that you’ve been able to identify among successful SaaS companies – please describe?
The most successful SaaS companies I have worked with have these things in common:
- They POSITION their product. They have done their competitive research in advance- so they understand their market space and have developed products that solve legitimate holes and problems (often addressing holes in existing applications as add-ons). Their products are well positioned and they can articulate the 3-5 reasons someone would be a fool not to consider them.
- They EXECUTE and get things done-“Execution Intelligence.” This term was first described to me by Rob Adams (a partner at Austin Ventures, original product manager for Lotus Notes and a popular start-up book) when I interviewed him while filming a video on how to finance a high-tech start-up. He explained that Execution Intelligence was a management teams’ ability to create a detailed plan and execute-with a vengeance.
- They are HUMBLE. I don’t mean mousy, but teachable and hungry to learn anything they can and then apply it and turn quickly.
- They DON’T RUN OUT OF MONEY. They know how to grow organically, but also how to get funding when their product starts to sell.
- They have UN-FAILING PERSISTENCE. The most successful ones I work with do not give up. They tackle the hard task with enough passion to cut through and get results- especially when creating a channel. They get it defined, recruit and work tirelessly to help their partners succeed (and they won’t quit on them). This invigorates their partners to not quit on them either, so they crack through, sell, support and sell again.
Most of these are common traits of top startups, but also divisions of larger companies.
What are the top 3 biggest mistakes you see SaaS companies make?
I see these mistakes the most frequently- many are the opposite of the top five reasons companies succeed:
- The company developed a “me-too” product without first doing their homework. For example, there are over 212 project management apps in the market, yet I keep getting approached by companies with another project management tool that has no real difference.
- They can’t get anything done. They circle around the projects, are not organized, and can’t seem to make headway. I blame the leader for this- which is why most VC’s say the top three things they look for are 1) management, 2) management and 3) management.
- Run out of money or patience. Enough said.
What do you think the average cost of reseller acquisition is for business cloud apps (or typical rule of thumb you’re seeing used)
I typically calculate the average number of units sold per partner, expect them to remain for at least 3 years (some stay forever), and then multiply it by the revenue per unit to calculate the return for each reseller partner. Building channels provides the greatest ROI for any marketing activity in the company. If it cost me $5,000 for a recruiting campaign (headcount, list, etc.) and I recruit 100 partners (and I’ve recruited thousands for some vendors) who average $10k per year x3 years, that is a $300,000 return- I would spend that out of my own pocket any day.
Stay-tuned for further SaaSMAX WiseSaaS Leadership Series Interviews …