JAY MCBAIN (0:00)
You know, 75% of people don't want to talk to a human. I read a report last week that now the majority of software buyers now prefer an AI-run demo. And the secondary question was, was that AI-run demo better?
JAY MCBAIN (0:15)
And the answer is, well, no, it's much worse. Well, why would you prefer something that was worse? And the simple answer was, well, the AI demo doesn't call me three times a day because their sales manager wants me to close the deal.
TYLER CALDER (0:28)
This is Get It, Together - the podcast where partnership and go-to-market leaders share the real stories behind programs they've built and scaled.
TYLER CALDER (0:38)
Hello, everyone. Tyler here, CMO at PartnerStack, and welcome to the very first episode of our new podcast, Get It, Together. For this first episode, I had a great conversation with the one and only Jay McBain.
TYLER CALDER (0:52)
Jay is the chief analyst for all things channel partnerships and ecosystems over at Canalys. And if you've heard the phrase decade of the ecosystem, then I am sure you're well aware of who Jay is and the kind of influence he's had in the partnership space. In this episode, Jay and I get into all of the data, the stories, the trends, everything needed to back up why partnerships are a non-negotiable for any business, whether you're a startup, whether you're an enterprise.
TYLER CALDER (1:24)
We also talk about where we're at in this decade of the ecosystem. How are we doing halfway through? We will get into how the fastest-growing and biggest companies in the world are crushing it with their ecosystems, why your partner strategy might be too narrowly defined, and we'll get into why CROs, CMOs, and RevOps leaders are critical to making sure that you can lean in and truly scale through your partner ecosystems.
TYLER CALDER (1:53)
We will get into how partnerships make every function stronger from sales to CS to marketing to product. And of course, we are going to talk about AI adoption and partnerships. We will talk about the role that communities play in our space.
TYLER CALDER (2:03)
Be sure to stick around to the end because Jay shares his framework for scaling partnerships. It's a great way to close out our first episode. So let's dive in. Thank you for listening.
TYLER CALDER (2:23)
Jay, thank you for joining us. Really appreciate it. I could not imagine a better guest to help us kick off our podcast journey. Currently, you are the chief analyst for all things channel partnerships and ecosystems at Canalys. You grew your career at IBM up here in Canada. You were channel chief for Lenovo and Autotask, and you started ChannelEyes, a platform that I'd love to chat a little bit about, maybe perhaps ahead of its time slightly.
TYLER CALDER (2:55)
You have a love of hockey. You still play hockey. I'm sure you're watching the playoffs eagerly right now. You've got an incredible list of dream cars, which I'd love to chat about a little bit more, maybe off the podcast, many of which you've had the pleasure of owning and enjoying.
TYLER CALDER (3:12)
And lastly, I like to think you're probably the closest thing our industry has to an Oracle. Perhaps the Oracle of Channel or the Ecosystem Whisperer. Maybe we can coin one of those by the end of this podcast. How did I do? Did I miss anything?
JAY MCBAIN (3:28)
That is quite the introduction, and it sounded much better than it probably really is. But glad to be here and help get things together.
TYLER CALDER (3:26)
Awesome. Very cool. So let's dive right in. And I know you've chatted a lot about what I'm going to get into here and what I'm about to ask, but I'd love to explore it a little bit. And that is the decade of the ecosystem. I think you made that statement back in 2019, 2020 or so, and so we're about halfway through. Let's rewind, though. Let's go back five years. What was it that you saw five years ago that had you make that claim? Say, “yeah, you know what? This is the start of the decade of the ecosystem.” What was going on five years ago?
JAY MCBAIN (4:11)
Yeah, I think it was part of my career at the time as well. I remember living through a decade of sales, really starting in 1999. There was a really small company out of San Francisco named Salesforce.com that was changing things. And I was a sales manager at IBM Canada at the time, as you mentioned. And I remember 1999 really well because it was Y2K and every customer was overspending that year. And one of those dream cars, I got a cherry red Mercedes.
JAY MCBAIN (4:39)
I remember spending cash. It was such a good sales year. But that was also the year that I truly believe the salespeople on my team—you are born to be a salesperson. You manage your territory with your gut. There's just this special place in the world for these salespeople. And what we learned over the next couple of years, that really wasn't true.
JAY MCBAIN (5:01)
Sales is a science and there's thousands of pieces and parts to it. But in the end, that science is there. And sure, somebody that is the best salesperson in the world can overachieve that science by 10 or 20%. Maybe the worst salesperson in the world will underachieve that by 10 or 20%. But it's a machine. It's operational. It's something that is predictable and reliable and repeatable as a science. So that was the decade of sales.
JAY MCBAIN (5:11)
I remember in 2009, 10 years later, I'd be at cocktail parties and there'd be a CMO joking that 50% of my marketing dollars are wasted. I just don't know which 50%. And I'll say that that was really funny in 2009 until the decade of marketing, where a few years later, every 58-year-old CMO got replaced by a 38-year-old growth hacker.
JAY MCBAIN (5:55)
They came in with platforms like Eloqua and Marketo and HubSpot and Pardot. They came in with 15,348 MarTech ISVs, ad tech tools to lay on top of that platform. And they proved out through the decade of marketing that it wasn't 50% wasted. You ended that decade with every nickel accounted for and the tools loaded up. The CMO at that point was spending more money on technology than the CIO.
JAY MCBAIN (6:26)
And I looked at these two things and said, you can't be successful in sales. Because 75% of the world trade GDP flows indirectly. It flows through dealerships and agencies and brokers and resellers and retailers and franchisees. It flows through gas stations and pharmacies. All 27 industries sell through third-party independent local owners. And so that can't be true.
JAY MCBAIN (6:52)
And then marketing, when the 28 moments that go before a considered purchase are 90% plus owned by partners—whether they're partners of yours today or not is something for discussion, but there's no way to sell or market. And then obviously as subscription consumption took off, there's no way to renew, upsell, cross-sell, enrich customers every 30 days forever without partnerships. The people they trust the most that are surrounding them. There's no way to do products. It was just this moment of the decade of the ecosystem.
TYLER CALDER (7:24)
That's great. I'm going to age myself a little bit because why not? I graduated university in ‘07 and my first job out of school was with Aliqua. Junior job, but you really started to see, or at least I started to see two things. One is just how amazing it was to work for a startup growing as quickly as they were. But the second is exactly what you were suggesting about the beginning of that marketing decade. And you were bang on.
TYLER CALDER (7:51)
So at Aliqua, we had so many customers coming to us in a bit of a panic, right? I am getting all this pressure to measure the hell out of everything. I am getting so much pressure to make sure that I am showing impact on revenue. And then you started to see a little bit of the fallout of that. The fallout being, to your point, the folks that could lean in and do it, they stayed. They kept their role. They kept their job. Those that couldn't, those that kind of hung on to: “marketing is about impressions. It's about eyeballs. It's about influence. It's not a science. You can't measure everything.” They are kind of given the boot pretty quickly and replaced.
TYLER CALDER (8:32)
And then I went agency side and saw the exact same thing. And it's interesting. I have always equated partnerships today with a lot of exactly what was happening then. If you are in partnerships and you are not looking at the business side of it all, the impact, and you are not talking the language of the business, there might be something there you have got to look at.
TYLER CALDER (8:54)
Which I suppose leads me to: We are halfway through. How are we doing? How is partnerships? How is the ecosystem performing in your mind?
JAY MCBAIN (9:03)
Yeah, I think that the signals are very strong. The state of our union is strong. One is we are delivered a gift in AI. AI is a pure ecosystem play. You will notice today that every major investment, and we are talking $7 trillion of buildout of AI right now, and NVIDIA being the biggest company in the world now, coming out of nowhere in the last two years, but suggested to say it's NVIDIA plus OpenAI, plus a hyperscaler, plus a platform like Eloqua, plus cybersecurity.
JAY MCBAIN (9:39)
There is a seven-layer stack at minimum in an AI implementation. So this is kind of this world where ecosystem first. You are dealing with partnerships and alliances all the way through. You are also dealing with millions of customers who since 2023, once we got past the consumer part of it, which was when our neighbors and friends and family who are not tech people first saw the poetry and the music and the deep fakes, they all came to us as tech people and said, did we just light up Skynet?
JAY MCBAIN (10:13)
Once you get past that answer, in the last couple of years though, every business from your smallest flower shop or restaurant up to the biggest banks and governments are asking the questions: How does every role change? How does my business change? Is my industry at risk given where we're going?
JAY MCBAIN (10:31)
And the millions upon millions of partners out there with the tens of millions of people who have earned trust over the course of the last 10, 20, 30, 40 years around these customers are now in a position to talk about this. So this is kind of this inflection point in our industry. We had 20 years of client server. I sold laptops for 17 years. We had 20 years of cloud starting with that Mark Benioff story in San Francisco, but later on with Jeff Bezos and AWS, and then obviously Azure and Google and others. But we had 20 years up until March of 2023. We triggered a new 20-year era in this industry. And it's all about partnerships.
JAY MCBAIN (11:11)
The biggest companies in the world, and you can go cross-industry on the fortune 100, are all platform companies. They all own these master platforms, which have the integrations built, have the alliances built, have the marketplaces, digital marketplaces now built. And this has created $10 trillion of market value in the last couple of years. And so that's the market changing in our favor. That's the industry and valuations of company changing.
JAY MCBAIN (11:40)
And right back just to sales and marketing folks, Salesforce does an annual state of sales report where they go talk to all the CROs in the world and compile. And last year's report has now 89% of salespeople using partners every single day. That's a huge change for five years ago. And for the 11% who don't, 58% plan to within 12 months. So that's the magical 96% of partner-assist number that we see in the industry. So salespeople have wised up that there's no way to win today.
JAY MCBAIN (10:31)
And in 2024, it was a tough year. More than half the salespeople in the world didn't make their numbers. But for those who did, 84% point to partners as the reason why. So I say from a sales perspective, we kind of caught up, that the decade of sales has caught up to the decade of ecosystem.
JAY MCBAIN (12:30)
Now marketing, HubSpot did a report around the same time and 84% of marketers are looking to market to, through, and with partners, understanding these 28 moments and understanding using tools like PartnerStack, understanding that there are some partners who collect money at the point of sale, 75% of the world, which is one-half of PartnerStack.
JAY MCBAIN (12:51)
The other side though, is the partners that don't collect money. They don't sell you the car. They don't sell you the TV set. They don't sell you the jar of peanut butter, but are highly influential. They could be set up as affiliates, affinity advocates, ambassadors, referral partners, and there's all kinds of ways to fund that. And that's the other side. So the technology has caught up to the decade of the ecosystem. And there's single platforms now that can run all kinds of partnerships, regardless of how they're funded and how they were in a single place. So I'm very comfortable that we're at a good place and the industry and the world has handed us a really nice hand for the next five years of this decade.
TYLER CALDER (13:30)
There's quite a bit in there that I want to dive into. Maybe let's start with the first stat that you referenced and you mentioned the biggest companies in the world. I think for the biggest companies in the world, partnerships has always been a little bit of their secret sauce, right? You look at Microsoft, they were partnerships from day one. What seems to be true today with the momentum of everything—with AI, with technology in the market, with communities that are supporting folks in partnerships—is that there is democratization of partnerships.
TYLER CALDER (14:08)
It seems like, you know, you even go back five or six years, if you were a smaller org, you were a startup. It was hard to attract partners. It was hard to really scale through indirect channels. It does seem like that has changed, maybe not as much as everyone would like, but I'd love to tap into that a little bit. You know, if we get really specific, what does the democratization of partnerships, the channel ecosystem look like? So the vast majority of businesses could be partner-led, ecosystem-led, whatever you might want to call it.
JAY MCBAIN (14:44)
Yeah, you brought up Microsoft. So let's talk about Microsoft, because it's a really interesting case study. If you look back 44 years, until August the 12th, 1981, Microsoft DOS version one ships on that first IBM PC. Obviously I was close on the other side of that story. That might be dating myself. But the fact of the matter is Microsoft is legendary for missing every single turn of the crank in our industry over the last 40 years, up until AI. So we'll put a pin in that one. But if you look in 1995, they completely whiffed on the internet. They missed it. And Netscape and others and the lawsuits and antitrust suits entailed and the Sherlocking of the browser and everything else, but they missed it by years. But they use partnerships to catch up.
JAY MCBAIN (15:31)
So they took a wide turn, they hit the gravel, they wobbled, they got back on the street and with partners, they accelerated. They miss mobility to Apple, creating Apple as the world's most valuable company. And they try afterwards to buy up some companies and stuff, but they accelerated back again via partners. They completely missed the cloud. AWS, Jeff Bezos had a five-year headstart and continue market share dominance because of missing the cloud by years and years and years. But when they finally brought out Azure with partners, they got back on the road. They started picking up speed again. And for 26 straight quarters, Microsoft has outgrown AWS in the hyperscaler market.
JAY MCBAIN (16:16)
It's legendary in understanding the first 28 moments, understanding that there are seven partners that surround the customer. That's according to McKinsey. And all Microsoft said, if we could get three or four of those partners to say nice things about us at every moment, before, during, and after the transaction, and continue to say nice things about us and wrap $8.45 in services around every dollar we sell, we're going to beat any competitor in this market. And they did. While AWS is still a market share leader, they've been outgrown quarter in, quarter out for years, years, and years.
JAY MCBAIN (16:50)
Now, the one they didn't miss is AI. In comes Satya, and they are early investors and majority investors in OpenAI. They get tight relationships with NVIDIA. They are the ecosystem company that understand partnerships. And now, for the first time, they're out front of a trend. And what happens? Microsoft becomes the most valuable company in the world. They understand the utility-based, the micro-consumption-based model that's going to make them successful, keep them out of antitrust court, and allowing the ecosystem to be successful.
JAY MCBAIN (17:24)
Every week, they mint another unicorn ISV. They want those ISVs to take the logo in front of the customer and win, while they're the utility behind the scenes. So it's a story that spans four decades, most of it failure. But now, how the ecosystem moment, this decade of the ecosystem, and this next 20 years in our industry, has absolutely handed Microsoft the perfect hand to play.
TYLER CALDER (17:51)
Yeah, it's very interesting. Again, there's a few things in there that you mentioned. So when you talk about partners having impact or driving influence before, during, after, one of the things that I oftentimes see talking with partner leaders, especially ones that are in startups, midsize companies, they haven't necessarily had the experience of the enterprise where you're touching a lot of different types of partners. One of the things I find is there is a singular definition of partner to them. And it's largely just based on what their experience has been, right? I've worked with this type of partner, and that type, could be anything, right? I've worked with technology partners, and I'm very focused on integrations, and therefore, that's what a partner program looks like. Or I've worked with agencies in a referral wholesale motion. And so to me, that's what partnerships means.
TYLER CALDER (18:41)
What that leads to is seemingly missing exactly what you just said, having partners impact the entire buyer journey. And one of the things you talk a lot about is partners don't want to be boxed in. They don't want to be defined as, I'm just a reseller. How can a company unlock that? What should a company be thinking about to make sure that they are opening their aperture to the type of impact a true ecosystem model can have versus a singular definition of a partner type?
JAY MCBAIN (19:16)
Yeah, it's a great question. And this is changing faster in the last six months than it has in the last 40 years. So if you're watching this, you see a Venn diagram behind me with 20 different circles of 20 different partner types. And I'll tell you that 78% of digital agencies are tech services companies, and 81% of accountants are now tech services companies. And how many VARs and MSPs and ISVs and SIs there are in the world.
JAY MCBAIN (19:40)
You're absolutely right, is that it's never been about type. The average partner today checks 3.2 boxes on this Venn diagram. So in the morning, I might be a consultant. In the afternoon, I'm an integration specialist. And the next morning, I'm a managed service provider. The next afternoon, I might be an ISV. 44% of them developing software. So this is the change that's happening now. So we have research around the world that says you may have thought of me as a VAR or MSP five years ago, but I do 3.2 things now.
JAY MCBAIN (20:13)
So the way that vendors are relooking at this, and this is rightfully so, is they put the customer in the middle. And if you stare at your customer, every one of your customers in your TAM, and you assume you kind of this psychology, human psychology, that they're going to go through 28 moments before they make a decision, either for or against you, for your competitors. In those 28 moments, there's going to be several of those that you lose a deal without ever knowing there was a deal. In other words, you were not successful in any of those 28 moments getting visibility to what the customer read, where they went, who they followed, what eBooks, what podcasts, what events they went to, who did the consulting engagement, who did the design, architecture, configuration, price quote. We know all 28 of these moments and how to find them. This is a big PartnerStack moment as well, finding those moments.
JAY MCBAIN (21:09)
But at the point of sale, remember in subscription and consumption, which two-thirds of the world is moving into, winning a customer is only winning the first 30 days. So everything, and even Wall Street now, looks to your lifetime value of the customer and says, what is your renewal rate? What is your retention rate? What is your upsell, cross-sell, enrichment rates?
JAY MCBAIN (21:31)
And by the way, why Microsoft became the most valuable company in the world is their retention rate, renewal rate hit 108%. In other words, I'm sure they keep most of their customers high 90s, but it's the fact that with that enrichment, they renew at 108%. And that's the kind of business that I'd love to invest in. They don't have to bring out a new phone in September and sell a lot of them by Christmas. They don't have to have a microchip that everybody wants to buy until somebody else catches up. It just seems like a set-it-and-forget-it business that rotates on itself. So this is the kind of business everybody's trying to build at the moment is one of these businesses.
JAY MCBAIN (22:12)
And so every 30 days forever, the people that are in doing implementations, integration, that constant consulting, that constant enrichment, managed services, those are the seven people that are going to drive the value of your company, that are going to drive that retention rate to 108%. And so I have to stare at the customer. And if it's a digital agency doing that, that's awesome. If it's a MSP that's doing it, if it's a VAR doing it, the way I would have classified them in the past doesn't matter as much anymore as the moments do. And whoever happens to be executing that moment, I've got to be able to have a way to build a program around that, build compensation and incentives, education and training. I've got to be able to manage, make those reliable and repeatable type of management and measurements.
JAY MCBAIN (23:00)
These are the things we have to do now at a level of scale that is off the charts. 10 times the amount of partners that there was in the past. And again, every customer I have has seven of them hanging around and I have to get to two, three, or four of them to say nice things about me at every stage. So just in the last six months, the whole partnership strategy, this whole decade of the ecosystem kind of changed. And we understand what the next 20 years is going to look like.
TYLER CALDER (23:27)
I think I've been seeing a little bit of an interesting trend. And I was at an event earlier this week, actually, where it popped up quite a bit. And that trend is the partnership between RevOps and partner teams starting to really seemingly take off. And it seems like it comes down to a lot of what you're suggesting, I think, which is we got all of this potential insight into these moments, but we're blind to them. We don't actually know what the moments are in some cases. Maybe we know what the moments are, but we don't actually know what's happening within those moments. We don't know who's having influence. We don't know how to tie all of that insight into what our go-to-market motions look like.
TYLER CALDER (24:13)
And I'm seeing a lot of RevOps teams, especially kind of modern, forward-looking RevOps teams being tasked with that. Pull the ecosystem together. Pull the tech together. Elevate the data and the insight to a place where it's usable. And to your point earlier around AI, that seems like it's one of the biggest unlocks to all of this. And not just AI itself, but just the fact that it's moving so quickly. It seems to be forcing people to do really interesting, innovative, forward-looking things with their workflows, their data, their tech.
TYLER CALDER (24:52)
And I suppose where I'm going with that is, if we go back to marketing, the decade of marketing, and you mentioned this, it was Aliqua, it was Pardot, it was Mercado, it was then HubSpot. There had to be this push of tech behind the movement for it to become truly real. And it does seem like that's where we're at with partnerships right now, with AI being the biggest unlock most recently.
TYLER CALDER (25:18)
What role or what responsibility does tech have in pushing this whole thing forward? And be pointed, right? We'll see. Maybe PartnerStack will take your advice and you'll see it. We'll get free market research for everybody. But yeah, what's the role of a company like ours and everybody else in our space to make sure that every company in the world can step into partnerships, they can be ecosystem- led, what do we got to do?
JAY MCBAIN (25:42)
Yeah, we're standing on the platform moment. And most people think of platforms as some sort of fancy UI in front of a bunch of disparate tools. Some people think of platforms as a pricing model, like a bundled price on a disparate set of tools. And while it might be part of those things, the majority of platforms is synonymous with partnerships.
JAY MCBAIN (26:06)
So when platforms equals partnerships, I understand that in January of this year, we have a majority new buyer in tech industry. 51% of the buyers of the $5.3 trillion in tech, hardware, software, and services is now born after 1982. So a millennial age, digital-first, digital-only type of buyer, 75% of them don't want to talk to a human, but the criteria changed from baby boomers and Gen X in that they're integration-first. 79% of people won't buy a car today unless it has Apple CarPlay or Android Auto. Think of an industry 120 years old. You're taking over a dealership from your great, great grandparents, and you're just about to lose 80% of your buyers because you don't have a tech integration.
JAY MCBAIN (26:48)
So when I go back to your Eloqua story, you know, Eloqua became this platform, not just in where you could send out emails and social and search and syndicated content and wonderful platform to execute. But it also became an integration hub of 15,348 MarTech and AdTech tools. They're all widgets out there doing something. And while they execute data, it's very hard for a human to go and connect all the dots. If it falls into Eloqua and that data lake now has AI to go and read that and make sense of it and get to that next best action. That's the platform moment. Understanding that there are seven partners around every customer that the CMO relies on. Two of those might be digital agencies, but others that hang around and really drive that outcome for the CMO.
JAY MCBAIN (27:41)
So they're building services and channel partnerships. They're building alliances. Eloqua now under Oracle understand that they have to play nice with AWS, Microsoft, and Google. They have to play nice with Salesforce, ServiceNow, Workday, HubSwap, you know, all others, you know, maybe competitors, maybe not in the market. Because that data also has to, an agentic AI has to be headless.And when you start to think about the permutations and combination, this is the answer to your question. It's a technology story.
JAY MCBAIN (28:10)
There's no human that can go through the trillions of permutations and combinations in those 28 moments. So Eloqua is going to be a very important set of data, but I'm not going to log in as, you know, an agentic AI bot. I'm going to come in through the side door. I'm going to go into the side door into Salesforce CRM. I'm going to go into the side door of PartnerStack. And as I've gone into these big data sources, these big data lakes, I've got the Workflows. I can get the intelligence and I can wrap trillions of data sources together, data fields together to come back within a second or two and give the salesperson, give a marketer, give a channel professional the next best action. But if 75% of my customer doesn't want to talk to a human, it can also go talk to the customer and walk them through the next 10 or 15 moments. So this isjust a wonderful spot we're in, but we've got to understand that it's not going to work the way we thought it worked in the past.
TYLER CALDER (29:17)
Yeah, no, that's great.
JAY MCBAIN (29:18)
A headless world is a very different world.
TYLER CALDER (29:20)
What I heard in what you just said was, and this might be, again, my recency bias with a lot of the conversations I've been having, but if you're in that role, like a RevOps role or a technology role where you are the ones connecting the data, you are figuring out how to leverage that to figure out that next best action, like that is a place to be.
TYLER CALDER (29:45)
And if you're a partner leader and you're not cozying up with your RevOps team, if you're not fighting for some of those resources, because let's be honest, partnerships teams very rarely get the attention of internal RevOps, you’ve got to figure out how you show the org just at the unlock. When you really look at true ecosystem insight and data what it can do for your business, I think it's likely one of the biggest go-to-market unlocks over the next 6, 12, 18 months.
JAY MCBAIN (30:16)
So start to, as you're obsessed over the 28 moments, get obsessed over this new human psychology. 75% of people don't want to talk to a human. I read a report last week that now the majority of software buyers now prefer an AI-run demo. And I start to think about that. And the secondary question was, was that AI-run demo better? And the answer is, well, no, it's much worse. Well, why would you prefer something that was worse? And the simple answer was, well, the AI demo doesn't call me three times a day because their sales manager wants me to close the deal.
JAY MCBAIN (30:49)
The avoidance of humans, that avoidance of the car dealership at the end of your 28 moments when you're smarter than the salesperson, smarter than the sales manager, and you already know what 5,000 people paid for the car within 50 miles of you in the last two weeks, you're staring at the bell curve. So you know what the deal is going to be down to the nickel. You're just, I carve on the car to me and hand me the keys in my driveway. Pay $100 more to avoid that scenario.
JAY MCBAIN (31:14)
And this avoidance is the AI moment because as a buyer, as you start to collect, let's say the first 10 moments, they read an ebook from one of my partners. I can see that through PartnerStack. They went to an event. I'm partnered with that event owner, and I can see that through PartnerStack. Oh, they came to my website. I can see that through Eloqua. Oh, they came and did one of our internal videos. Interesting. I've already got four of the first 10 moments.
JAY MCBAIN (31:43)
But in a buyer that may not want to talk to a human, I got to understand that buyer, but the next best action might not be a human-based one. Now that we're at moment 10, I have 18 moments to hold the hand of that customer and deliver, understand that they're audible or they're visual. Who are they? What are their psychology and how best to serve those 18 moments, along with partners, to get them to that point of sale. And maybe they're one of the 70.1% of buyers who want to buy through a channel, don't want to buy through direct, and maybe they want to piece it together on a marketplace.
JAY MCBAIN (32:18)
And then, you know, after that, the fun starts. I got to get this all tied together. I got to start showing business outcomes and bring this whole thing, the benefits to the buyer and get them to renew. And then, you know, maybe making sure that they're using the entirety of my platform or other parts of my portfolio. So I'm triggering these upsell cross-sell enrichment. So again, this whole system has to be built, not just RevOps, it's marketing ops, it's partner ops, it's CX ops. And now more than ever, it's product ops.
JAY MCBAIN (32:50)
So it all rolls up now to FinOps. And one of the interesting things, if you go onto LinkedIn, is the fastest growing job in the world is FinOps. How the heck are we going to pay for this $7 trillion of AI build out? And how do we control our cloud costs? How do we control these line of business buyers who are going all in and all the duplication and everything else that's happening? You know, how do we, some time the fiduciary board is going to say, hey, who's running the ship here? And I need somebody who's 50% educated in the CFO world and 50% educated in the CIO world, but can sit between them and make sure that we're not going to lose our shirts as we go all in.
TYLER CALDER (33:33)
Yeah, very cool. Very interesting. I asked what you thought the responsibility of tech in our space was. What about the role of communities in our space? And the reason I asked that is because you do such a great job of tracking what I've heard you call the water and holes within the channel and partnerships, where folks are spending their time. And you're seeing a lot of different communities, big and small, pop up to try to support this decade of the ecosystem. What are folks doing well? What are they not doing well? And again, what is the responsibility of these communities, these groups, to help push the industry forward?
JAY MCBAIN (34:17)
This is probably a personal hobby of mine. I happen to be an analyst. So it looks like, you know, this is part of the things I study, but going back 30 plus years in this industry, I'm absolutely fascinated. I wake up every day, just dazzled over how we're all influenced. Whether you're talking politics or whether you're talking industry, we're human. And for all the flaws and everything in humans, understanding this. And as I was spending decades trying to figure out what people read, where they go, who they follow, we all had to make that opinion of AI two years ago. We have to tell our friends and family whether we lit up Skynet or not, and we're all doomed in the next 10 years. We had to form an opinion, but you don't magically form an opinion.
JAY MCBAIN (35:06)
You go back to human psychology. Do you know that 12% of us have podcasts like this one as our number one way we're influenced? Well, 12% doesn't sound like a lot, but when you look at the tens of millions of people in our industry, millions of people use this as their number one way, when they walk the dog, when they drive their car to work, when they get that free moment, this is their platform that they love. And it's huge. And if you go back to politics, the Joe Rogan moment switched, flipped the election in the US. It was so important in those last weeks that it was enough to flip seven of the seven swing states. So that's 12%.
JAY MCBAIN (35:49)
35%, number one is events, physical events, which seems ironic based on our entire conversation to this point. But number one is to literally go to an event. And I just came from an event in Denver two days ago, PAX 8, had 3,500 people there, rubbing shoulders, hallway conversations, hotel lobby bar at night, late into the night. But you're physically with, in some cases, competitors, but it's a community that's built, that's around what you do and how you're learning as you sit down in the sessions, as you learn outside of the sessions, it's number one.
JAY MCBAIN (36:27)
There's 352 events serving the VAR MSP audience around the world. There's 121 podcasts. There's 106 magazines for people who love to read, that's kind of their number one way. And physical magazines, there's still a few of those hanging out. There are 67 associations for those that want to be members of something. CompTIA just became the GTIA, the biggest IT association in the world, but there's 66 others. There are peer groups. There's 15 spheres of influence. And I actually publish every one of those lists, every number that I just mentioned.
JAY MCBAIN (37:00)
I'm fascinated, not just with the event and magazine and how big it is, how the readership is, how engaged people are in the community. I'm obsessed with the level of influence that it has. Where did you form your opinion, whether we lit up Skynet or not? And it all rolls back.
JAY MCBAIN (37:17)
And one of the things that Canadian author Malcolm Gladwell wrote a book a long time ago, which is a must-read for any business person is The Tipping Point. And The Tipping Point had two chapters on this. The one chapter was on super connectors. And it told the story of Paul Revere in 1776, Boston. As a silversmith was more connected than the mayor, the governor, the president of the United States at the time. This silversmith had the time to community-build and basically created America, defended America against a British invasion.
JAY MCBAIN (37:50)
That was one story. And then later on, the chapter was the law of a few. You would think that there are millions of things serving millions, tens of millions of people. And there isn't. Our entire industry, $5.3 trillion industry growing at 7% with tens of millions of people inside of it, roll back to only a thousand watering holes. The 121 podcasts, the 352, the 106, the 67, all the numbers I just listed off, they all add up to only about a thousand places—vendor communities, distributor communities. That's it.
JAY MCBAIN (38:26)
Our entire industry and get your brand in front of them, to get your channel program in front of them, to influence them, to go this direction in AI with you, to go in this cybersecurity direction with you, to go in this managed services direction with you. There's a thousand places where you can effectively cover it and only about a hundred super connectors that are the Paul reveres of this industry. And by the way, the top one in the world is also a Canadian. So these are the things that I publish. I'm just absolutely fascinated by how trillions of dollars roll down to a thousand things and a hundred people.
TYLER CALDER (39:06)
Very cool. Yeah, that's super interesting. So you would certainly recommend to folks in our space, get connected into some of the communities, get engaged. If you're not there in some capacity, you're very likely missing out, certainly on education. You're missing out on influence. You’ve got to be part of it. Is that a fair—?
JAY MCBAIN (39:26)
You do. And you don't have to do it all. Maybe Microsoft, and maybe companies at the very large level have to do it all. But if you're in cybersecurity, then the list of 121 podcasts goes down to 35. So the list of a thousand watering holes probably drops to 300. If you're in cyber and 91.6% of the cybersecurity industry goes to, through, and with partners. So if you happen to be in that industry and you're not involved in the communities—you were not in Denver a couple of days ago, and you're not going to be in Vegas next week—you know, you're missing out on a big part of your TAM.
JAY MCBAIN (39:26)
And remember the TAM are the seven people that surround every one of your customers. They're not going to agree to share their data. They're not going to tell you that they read their ebook or that they did a consulting gig until you set a program with them and an agreement that is managed under PartnerStack. So there's got to be some win-win. They don't give away this data for free.
JAY MCBAIN (40:26)
And so you've got to figure out how to do that at scale. And you can't do it on a spreadsheet and you can't do it now on just, you know, keeping emails and having people's memories be really good. It's got to be a repeatable and scalable system. Like we said, to reach the highest ranks of your industry, of your competitive set, every one of the top players in the world in your industry is a partner-friendly, ecosystem-friendly company. They're a platform. And you've got, you're on the road to being a platform.
JAY MCBAIN (40:57)
Even if you're a five-person startup in Israel, in cyber right now, your backers and your future investors want you to be CrowdStriker, Splunk. They want you to be, you know, a Palo Alto. They want you to be the big platform. So start building it out of the gate. Don't start on a spreadsheet. Start with a professional tool like PartnerStack who can go from your first few partners, first few influencers that you sign up to someday maybe having a hundred thousand partners.
TYLER CALDER (41:25)
Well, I like that perspective, not just because you obviously shouted out partner stack, but I'll always appreciate that. But even I might push back on one thing that you just said. It's like, yeah, maybe you do start with a spreadsheet. I think the key thing is, go do the work to figure out where the influence is. Make sure you're there, you know, make sure that you're not ignoring that opportunity. And if that means it's brunt force, it's in a spreadsheet to start, cool.
TYLER CALDER (41:55)
For sure at some point when you really want to unlock and you want the data to be a little bit more directional and how it guides you. Yeah.Moving to a platform for sure. I think the biggest thing is, is being aware of what are those watering holes? Who are the people that have the attention of your audience that you need to cozy up with? Tooling can absolutely help with that. But in the absence of that, for whatever reason, just go do the legwork.
TYLER CALDER (42:33)
That's certainly what we see. The customers of ours that I would suggest are seemingly winning. And when I say winning, it's a good business. They're growing efficiently. They're leveraging partners effectively. They're putting in the legwork. And then I think what that really sets them up for is now they have the insight to actually feed the platform, to help the AI learn, you know, what's working, what's not for them. It's going to be an interesting, very quick six to 12 months, I think.
TYLER CALDER (42:57)
We're coming up on the end here. I have two more questions. One is more personal and career. What led you to becoming an analyst?
JAY MCBAIN (43:05)
I have my personal blog. I've kind of talked about the butterfly moments, jaymcbain.com. When I was 10 years old, my mom was a computer teacher in Calgary and she'd lug home an Apple IIe. And I taught myself to program at 10 and built my own little Quicken program. And that was one side of it.
JAY MCBAIN (43:22)
My dad was an accountant. So any question you would ask my dad, he would answer with a number. And so, whenever you ask me a question, you see me answering with a number, you know, very factual.
JAY MCBAIN (43:34)
But the one thing I learned is system thinking. Going through grade school, going through high school, going through university, getting your first job, mine was at IBM. Everything is built in a system. People work way too hard because they don't understand the system they're in. And I went the other way and probably did the minimum necessary, you know, to pass and the minimum necessary to succeed and stuff like that. But it's just always being a system thinker.
JAY MCBAIN (43:58)
You know, this is really interesting at the top and trillions of dollars sounds fascinating, but it's got to come down at some point to people and places and technology and things. And what are those things? And you start to create lists. You start to create connections. You get out on the road and talk to everybody who's great.
JAY MCBAIN (44:17)
The number one person in the world, the number one Paul Revere in our industry, you know, I go and talk to him because he doesn't really even scientifically know what he does, but he does know that he spends 306 days a year and has for 15 years at a Marriott. So he's the George Clooney of Marriott points, but just understanding that I've never met an MSP that hasn't had a beer with this person at the hotel lobby bar. And he's now created two sets of billionaires at two different companies because of his skills and because of his capabilities.
JAY MCBAIN (44:49)
So that's the, you know, system thinking underneath raw execution. And then you can go to other companies. Imagine you could have somebody like understands the seven people, the surround strategy, everything we've talked about, and you could become a billionaire. That's the system thinking. That's what's, career-wise, where I am today. Just explaining systems to people that are repeatable and then scalable.
TYLER CALDER (45:12)
Very cool. And so that potentially leads nicely into what my final question is here. Let's just, you know, I come to you, I am a C-level revenue leader, CRO, CMO. Maybe I'm a chief channel, chief partnership officer. What is the first principle thinking I should really be anchoring to as I think about scaling my ecosystem?
JAY MCBAIN (45:42)
Yeah. The first thing I do before talking to you is I spend a few minutes researching and I ask. I'm trying to ask you six questions and answer them before I even have to ask. I want to understand your buyer. I want to understand your sub industry. There's 297 of them. They all have kind of slightly different answers. I want to understand your regional geographic. There's 193 countries or even States or provinces. I want to understand number four, your segment sector focus. Are you selling to flower shops? Are you selling to the biggest banks? Are you selling to consumer?
JAY MCBAIN (46:16)
Number five, I want to understand the product set. Just in tech, I mention hardware, software, and services, but G2 Crowd has 2,265 categories of just SaaS. SaaS makes up less than 10% of our industry. So you can imagine where you are product-wise in your portfolio is really important. And then finally, the models. I want to understand how you sell—subscription, consumption, micro-consumption.
JAY MCBAIN (46:45)
And then I'm going to take those six answers and we're going to move from $115 trillion world economy down to $5 trillion tech industry. We're going to be talking about the billions of dollars in your TAM. And I'm going to be talking about the seven people who surround, who have earned the trust over the course of decades around your buyer. They're either going to say nice things about you or they're going to create friction.
JAY MCBAIN (47:09)
You're never going to get all seven, but if you try to go win deals with zero, you're always going to be hitting your head against the wall as a RevOps leader. Let's get to one, the person who collects the money. That's a great way to start. 75% of it is going to be: Who collects the money? Number two, who's there in those early days? Number three, who's influencing? Number four, who's there post-sale? Let's start working our way up.
JAY MCBAIN (47:30)
And if we can get to three or four people saying nice things about you in every one of your customers, TAM prospects, you're going to be that big platform on Wall Street sitting on a fortune-size company.
TYLER CALDER (47:44)
I love it. We don't want to be banging our heads against the wall. So don't go it alone. Thank you so much for your time. Really appreciate it. I think there's a ton here for folks to take away, make sure that they are at the forefront of this decade of the ecosystem. So thank you. Very valuable. Appreciate it.
JAY MCBAIN (48:03)
Absolutely. Good luck.
TYLER CALDER (48:05)
Sure.
TYLER CALDER (48:06)
Thanks for listening to Get It, Together. If you want more resources to help you build and scale your partnership program, be sure to follow us on your favorite podcast app and get more proven tips and tools at partnerstack.com/resources/get-it-together.