Leadership

3 Sure-Fire Ways to Tell It’s a Bad Distribution Deal

By Mike BergelsonJuly 11, 2014

For startups, the right distribution partnership can be transformative for the business. We all dream of that company-making deal with Walmart, Google, or Cisco.

Unfortunately, most partnerships that look great on paper actually end up consuming huge amounts of energy with very little return.

After kissing a lot of frogs along the way, I’ve found three markers that distinguish bad deals from potentially good ones.

I had the opportunity to share these tips on The Wall Street Journal. This is an excerpt of the article.

  1. Small + Small = Fail. Roles in a partnership are much clearer when there’s a big dog and a little one. If your company is small and your prospective partner isn’t considerably bigger than you, worry. They’ll likely be looking for you to bring more to the table than you can and then you end up both being unsatisfied.
  2. Deals Driven From HQ. I’ve seen the best partnerships that start with a happy customer, not an enthusiastic marketer or product manager. If you help get a large deal across the line for a prospective distribution partner, the sales team will talk you up to their peers. Eventually, marketing and product management will hear from the field how great you are and pull you through.
  3. The Sales Team Doesn’t Care. Sales people are busy. You have to make it easy and worthwhile for them to introduce your product to a customer. Invest in sales support and ensure that you’re always responsive and available. And, when the deal is cut, ensure the sales folks see commission on the sale or that you can spiff them.

If you recognize any of these characteristics, you have reason to worry. Save yourself a lot of time, money, and heartache from a bad partnership. Either it’s time to course correct or walk away now before too much damage is done.

Read the article in its entirety to learn more about these markers.

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Topics: Startups

Mike Bergelson

Mike Bergelson

CEO at Everwise

About the Author

Mike Bergelson is the CEO and a co-founder of Everwise, a talent development startup that connects employees to the people, development resources and experiences they need to thrive at every stage of their career.

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