For Randy Battat and Sanjeev Verma, cofounders of PreVeil, an early stage cybersecurity company based in Boston, channel partners, at least at first, didn't figure prominently in their startup marketing plan.
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"We do feel that we need to prime the pump ourselves -- generate sales directly --- and get the whole pipeline going before aggressively pursuing indirect channels," Battat noted.
That said, PreVeil, one of ten companies selected to participate in the MIT Sloan CIO Symposium's Innovation Showcase, plans to pursue channel partners. The impetus for indirect marketing came from its own customers. PreVeil provides end-to-end encryption technology for email messages and attachments, an offering now in beta, and in the coming months will roll out a file sync and share product that features the same encryption approach.
In a meeting with a CISO at a biotech company, PreVeil discovered that some enterprises prefer to purchase IT security products through a specialized value-added reseller (VAR). "It opened our eyes," said Verma, who thought the customer would have preferred to buy directly from a vendor.
Now, the startup executives believe they can sell PreVeil's technology through security VARs, large telcos and outsourcing companies among other types of partners. For example, Battat said PreVeil is in discussions with channel companies that are better suited to penetrate market segments in particular industries such as defense.
"By engaging with CISOs and CIOs we can naturally guide ourselves into efficient ways of distribution," Battat explained.
Startups consider the channel
PreVeil's experience finds echoes among other startups participating in MIT's Innovation Showcase, which features young companies selected by MIT faculty and students, entrepreneurs and early-stage investors. Most of the companies in the 2017 Innovation Showcase said channel companies will play some role in their technology, a trend consistent with the 2015 and 2016 showcases. While startups historically have focused on direct sales in their formative years, more companies engaged in startup marketing plan to consider indirect channels at an earlier stage in their development.
Another cybersecurity-oriented Innovation Showcase company, Fireglass, has made partners the heart of its startup marketing plan. Fireglass, with offices in the U.S., United Kingdom and Israel, offers a threat isolation platform targeting malware, phishing and ransomware.
"Fireglass is a 100% a channel-focused company," said Guy Guzner, the company's co-founder and CEO.
The example of ValiMail, meanwhile, illustrates the interplay of direct and indirect channels in young companies. ValiMail, a showcase company and email authentication as a service provider based in San Francisco, originally planned to sell only through indirect channels. But direct sales took off, noted Alex Garcia-Tobar, co-founder and CEO at ValiMail. The company now sells both ways and Garcia-Tobar suggested each approach has its advantages for a startup.
"I think there is always an allure to have a third party sell for you," he said, citing the ability to reach more people. ValiMail is developing partnerships with companies focusing on "email, security, DNS and systems integration," according to the company.
But Garcia-Tobar said a startup may need to close a few deals to learn the selling process before turning sales over to indirect channels.
"If you don't know how to sell the product yet, how can you expect to have a third party sell it for you?" he asked.
Bonsai, a startup and showcase participant based in Berkeley, Calif., provides an AI platform for programming AI models. The company in its early days engaged directly with customers for the most part, noted Dave Cahill, vice president of sales and marketing at Bonsai. But he said the channel will more frequently become a part of those customer discussions as enterprises attempt to figure out the AI landscape.
Cahill said boutique systems integrators and emerging technology consultants will play an advisory role, helping customers identify areas in which AI technology can solve problems and then determining which tools and approaches to use. He said traditional channel partners may eventually play a role in reselling a particular AI vendor's products, once customers are ready to implement a solution.
GreenVulcano Technologies, a Rome, Italy, company that provides middleware platform and cloud-based services for internet of things deployments, is working with partners in its home country and as it expands into international markets. GreenVulcano was among the ten Innovation Showcase startups.
In Italy, Accenture, a global professional services company, is one of GreenVulcano's main customers, according to Domenico Barra, CTO at GreenVulcano. He said partnering will part of the startup marketing plan as it seeks to grow in the U.S. market; the company opened an office in Newton, Mass. Barra said he expects most sales in the U.S. to be through indirect channels.
Two other 2017 showcase companies, Alpha Software Corp. and ClearSky Data, also work with channel partners. Alpha Software, a mobile application development software provider, partners with technology and services partners. For instance, Alpha Software, based in Burlington, Mass., works with CloudMine, a mobile backend-as-a-service platform in the healthcare and life sciences space.
ClearSky Data, for its part, recently launched a channel partner program. The cloud storage company's ClearSky Data Partner Acceleration Program maintains alliances with technology, managed service provider and reseller partners.
"We're looking for strong partnerships with companies looking to deliver more hybrid cloud solution and getting out of traditional IT infrastructure," said Courtney Pallotta, vice president of marketing at ClearSky Data, Boston, Mass.
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