Building – and Monetizing – a Partner Ecosystem

Building – and Monetizing – a Partner Ecosystem

Three executives of successful platform businesses - Neeracha Taychakhoonavudh, SVP of Partner Programs at Salesforce; Narinder Singh, cofounder of Appirio; April Underwood, VP of Product at Slack; and Ilya Flushman, general partner at Index Ventures and formerly of Dropbox sit down to discuss what makes a successful platform strategy, building for quality, and whether building a platform is right for you.

DataFox provides summaries of every single panel at SaaStr 2016, all published within a day of the panel itself. If you miss the tactical theater or strategy stage, are networking on the ground, or didn’t get a chance to attend this great conference, we’ve got you covered.

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Special thanks to Jason Lemkin of SaaStr for putting on this conference and giving us the chance to publish these summaries.

In a nutshell:

  • If you decide to build a platform, make sure you’re solving not just a big problem, but a fundamental problem.
  • Keep quality control high – trust is key for SaaS businesses, and users will judge you based on your platform’s apps.
  • Making your data available via API and watching how people interact with it is a good lightweight test to see if a partner ecosystem would fit your business.
Introductory remarks

To kick things off, some panelists talked about their own experiences in a platform ecosystem.

Taychakhoonavudh says that Salesforce’s strategy is to have a platform that empowers developers and clients – what began as clients wanting to configure Salesforce to their needs ended up being a major source of revenue for those clients and stickiness for Salesforce.

Slack, Underwood says, was meant to be a communication command center from the beginning. Productivity is a crowded space, but having a platform helped Slack become the dominant player. They’ve only been around for two years, but they’ve been pedal-to-the-metal on platform for 6 to 9 months – a remarkable commitment to platform strategy early on.

Fushman says he sees a lot of pitch decks from founders who want to build a platform. He says it’s not always necessary to build a platform, and that there’s a difference between a platform and a service. If you go the platform route, you need a strong core product; a plan for promoting the marketplace, supporting developers and adapting to changes; and committing to the strategy.

Advice for a successful platform strategy

Taychakhoonavudh suggests that if you want to go the platform route, you should ramp it up rather than going all in from day one. If your data is valuable to a certain set of users and you grant API access, she says, it’s a good idea of what a platform ecosystem might look like. (Shameless DataFox plug: we have an API too!)

Underwood offered some advice to those considering a partner ecosystem: solve foundational problems. There are many big problems, but few that are so systemic that people encounter them every day. That’s a big requirement, but a necessary one for success.

“Aim to solve a big problem in a way that gets users excited.” – Underwood
First partners

Underwood says that she started by building integrations internally that people used every day. Eventually, customer demand exceeded Slack’s engineering capacity, and third parties came in to pick up the – wait for it – slack. Her order of operations: first, solve a big problem. Next, have data your developers can use. Finally, connect users to the apps.

Fushman also recommends building early integrations in-house to set a high bar for future apps. Be thoughtful about what you build and why – make sure there’s a strong business case for an app. If it’s something your customers want but you don’t want to build (because of time, ROI, etc.), try to shop it out to a third party.

“If you build it, they’re not going to come. You really have to build something that’s unique.” – Fushman
Maintaining quality among third-party apps

Taychakhoonavudh says the bar on quality is “unbelievably high” at Salesforce, where trust and security are at a premium. She recommends a thorough reviewing process when it comes to SaaS platforms – once you lose trust, your entire business is in jeopardy.

Underwood recommends a two-pronged approach: users develop using the Slack API, which reduces the burden on her team; but to be included in the Slack app directory, her team must thoroughly test and review submissions to ensure that developers are putting their best foot forward.

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