Succeeding with Channel-Led Growth with Sugata Sanyal, ZINFI Technologies

Thanks for joining us today on the Fuel Growth podcast.

What is the right growth equation for your company? Is it pipeline?

Brand?

Product?

Customers?

Employees?

Join us as we interview CEOs, entrepreneurs and seasoned executives to explore what it takes to propel your business into growth. Joining us today is Sugata Sanyal, Chief Executive Officer with ZINFI. Over the past three decades, Sugata has worked for companies like Honeywell, Philips and Dell, building global teams across direct and indirect channels. Sugata has a unique specialty at solving complex industry problems that create new business opportunities through channel ecosystems, which led him to found his company, ZINFI, in 2008. ZINFI's mission is to solve the challenge associated with selling and marketing through the channel. Welcome to the show, Sugata.

Thank you for having me. Very excited to be here.

Yes. Sugata we're lucky to have you with us today for our first episode centered around growth through a channel strategies. Thank you for joining us, before we learn from your wisdom, could you answer just one fun question for us, please. And that is, if you had your own late-night talk show who would be your first guest? Hmm.

I think it definitely has to be Elon Musk, with all the things going on. I have so many questions to ask him.

Is there start with what the health? Exactly? Exactly, exactly. So would you consider yourself Elon fanboy? Or do you have some pointed advice for Mr. Musk?

Not really, I mean, I did buy his car, which with all due respect, I think it's an overpriced under-delivered car. I mean, we're still looking for that self driving mode, for sure. I'm driving. So there is a self driving mode. But I do not know when that full-self driving promise will become a reality. But, you know, he's an incredibly capable individual. He has built some amazing companies. It's sad, at the same time to see what's going on in Twitter, hopefully, you know, they come to a stable place. It's an incredible asset. I have a lot of respect, but I've questioned some of it over the last few weeks. So hopefully,

Hopefully, if you were to do this, he'll push forward the self driving mechanism here.

I'd love to have Elon Musk on the show. That would be a fantastic episode. Because again, I think my first question would probably be something along the lines of what the hell what's going on? For me personally, he was born in June of 1971. And I was born in October of 1971. So as his career unfolded, I always kind of had this little bit of a connection and affinity, like, "Oh, it's just a couple months older than me. He's seen he's seen the world through the same lens that I have." And I've always been very impressed with him. But I gotta tell you that what's going on with Twitter just kind of begs the imagination to a certain degree. I don't think any of us could have guessed that this is where we would have been.

Sure he knows what he's doing now.

All right, well, hey, let's get in and learn about Sugata here. This isn't the Elon Musk interview. This is the Sugata Sanyal interview. So let's let's jump in and get to know Sugata a little bit better. So, tell me a bit more about your career journey. And then what led you to become so passionate about the channel and working with channel partners and that whole approach to business?

Yeah, so, I started my career in Honeywell, as an engineer, my background is actually in chemical engineering. So, out of grad school, when I joined Honeywell, I joined their Materials division. At that time, it used to be called Allied Signal. But quickly, you know, I was drawn into several customer projects, I started to travel, then I realized that there's a lot more fun, working with customers, going out, figuring out what they need, than sort of sitting behind the desk and designing pipes and pumps. And when there's nothing wrong to it, you know, they are beautiful things that dry, a big part of our economy. But so I moved into marketing and sales, I ran businesses in New Venture area. So very early, I got exposed to the incredible technology portfolio that I Allied Signal and, then later on, Honeywell had, to work with R&D in commercialization. My last job was reporting to the chief growth officer before I left Honeywell, managing about a $900 million innovation portfolio across the Aerospace, Automotive and Material sector. And I was also a black belt, Six Sigma Black Belt. So I was kind of the first growth black belt, putting together programs working with various other businesses. And that was an incredible exposure. And that job was in New Jersey, then I moved to Silicon Valley a long time ago. I'm not gonna say when and then I moved to Philips, it was an incredible exposure working with global entities at Philips. I was first in the components business, which was actually sold, you know, vendors like Dell and IBM and Lenovo, selling from DVDs to components, and everything else that went into computers. But then later on, I moved into consumer electronics. I was the team that led in the investment into E Ink, the Kindle display. We launched industry's first ebook with Sony from Philips, which, actually, later on, created the platform for Amazon Kindle. So that was an amazing journey.

That's incredible.

And then I joined a smaller company called SonicWALL, here in Silicon Valley. I was there about four and a half to five years. And after that I left to start Zynthian. And SonicWALL was later on acquired by Dell. And every one of those companies, you know, I've worked with channel some form or shape where they're resellers or design houses, when you think about Honeywell or Allied Signal, you know, you work with uncontrolled systems, aerospace systems, there are various sort of intermediary organizations that you work with.

All those high-tech companies are building something that have supply chains behind them and have distribution chains ahead of them. Right? So, you've kind of lived in that in that channel world, your whole career.

Very, very complex supply chains locally and globally, some cases driven by in-country regulations and, you know, geopolitical issues, everything that we're seeing today, you know, that was there forever, right? I mean, it seems like there's a lot of talk about de-globalization and globalization, they were all there then. And, so, that was my exposure to the channel and saw a need. We started ZINFI as an agency, as a marketing agency, we work for some major Fortune 100 brands globally, but then realized, without a software platform, you really cannot provide consistent services. So, for the last, I would say, five to seven years, we have single-handedly focused on, we transition out of agency business. And then we're fully focused on bringing in SAS automation solution, helping brands to collaborate with their partner and drive demand.

We definitely want to get into the topic of the software technology side of things. Clint and I were planning to learn what you define as a channel strategy. But historically, I'm looking into the future, Sugata. So, we'd love for you to share with our audience, some key focus areas when creating a channel strategy, and you think you might even have a different term that you use. And as always, if you can share any tips that our listeners maybe could avoid doing, by way of learning from your experience. So, I guess with that, could we first make sure that the three of us and our listeners have a solid understanding of what channel even means to you?

Yeah, so, channel is very much a you know, word still in play, and it will continue to be played, but traditionally, you only think about the word channel, it represents something is flowing through it, right. So, that flow-through has been products and services. And it has been traditionally a fulfillment channel. And I was in Singapore, before COVID, at the Singapore Museum; they dug up a shipwreck at the Singapore Harbor, which was a seventh-century ship that was going from China, to Italy, around the Indian coastline. And that shipwreck had artifacts from across the entire coastline. And they were, you know, trinkets that sailors had that their families gave them with lockets, and you know, what not. And that was the beginning of channel. People bought stuff in either one place sold it to another place, added value to it at that time, carrying had its own value. But since then, I mean, we go back to Mesopotamian civilization, or people who got on a boat, went to another continent, they carried stuff. So, channel, it has all been there forever. You know, you can almost argue that been of human civilization. But in this decade, or the last few decades, we have referred to channel more of a fulfillment channel as a sales channel. So, companies that manufacture things and don't sell direct, they need third-party organizations to go sell. They would create what called channel partners that you know, other organizations that would carry inventory, drive demand, fulfill them. But what has happened is that fulfillment is a great function of demand, and demand is the function of customers. And the nature of demand, how customers buy, has been rapidly changing. And, so, with the advent of the internet over the last three decades, and proliferation of you know, how buyers buy and fragmentation going back to the word, I think, Clint, you're talking about value chain, things have changed dramatically. So for example, we're talking about Elon Musk, let's talk about electric vehicles, right? They have had an incredible vision re-architecting the entire value chain. I mean, if you look at success, war, Tesla of the industry talks about how integrated that solution is, right? They manufacture their batteries, they manufacture even to their babtteries or their chipsets, right? Of course, they write their software, they may get some components like the chassis and few other things from somewhere else, but they are re-architecting the entire value chain of their four channels. So people who sell to an automotive manufacturer like Ford, or GM or Nissan, or any other you know, company, the players are changing. So therefore, when you're launching a product like electronic vehicles, you know, electric vehicles, EVs are greatly driven by country regulations. So, you have governing bodies that they, you know, set emission standards, they define, you know, some of the safety standards, how it's sold, how it's supported, how it's serviced. So, the notion of fulfillment has completely changed. When you take a look at something like a Tesla, it's sold directly. I mean, I went to a parking lot to pick up my car, my next car was delivered in my driveway. I didn't go to a dealer. So, the fulfillment mechanism for Tesla is completely different. So, Tesla, you could argue, doesn't have a front-end channel. But what Tesla does have back-end channels of suppliers and providers. So, when you look at EV as a market segment, the broader term to use is ecosystem. You have players who are you know, Elon Musk in self, is a big influencer, but, in addition to that, everybody that's talking about Tesla ego on YouTube. There's so many YouTubers that are promoting their experience on Tesla, right? They are great influencers, they get paid on Plex, many have people you know, in the governing body. So, different kinds of dealer room, right, it's YouTube channels by individual advisors, as opposed to walking onto a showroom floor on El Camino Avenue, right? Exactly! And you can schedule that drive through in your app, you go to a showroom, they give you the car, you drive around, you drop it back, right? So, how that servicing. So, today, the word channel is definitely there. But it's related to more fulfillment. But, to sell a product to a customer who is buying very differently, you know, searching online, watching on YouTube, chatting with groups, then ordering it, trying it, maybe sending it back, that entire lifecycle of the customer journey has changed. So, people that are touching that customer is no longer the vendor, just by the vendor itself. There multiple people influencing you know, what you look at, what you buy, how you try it, you know, how you talk about it, how you upgrad it. So, all these players together, are now considered to be these these broader term called ecosystem. That's actually influencing consumption of something all the way from promotion to consumption and upgrade.

You know, as I was thinking about the front-end, the question started forming in my mind. In today's Internet driven economy with with all this information at our fingertips, and our ability to find anything, see anything, experience anything, so quickly, do you need the channel? Is the channel under attack? Is channel distribution and channel reselling something that's going away? Because the internet is disintermediating? But you described a different answer. You're describing an evolution of the channels what I think I was hearing in there, right?

Yeah, very much. So, I think certain part of the channel is dying, because it needs to reform and re-architect itself, because the solutions are disappearing. I mean, when you think about oil and gas, as a big sector, right? Anything we can look at around us has plastic in them. And you know, there's a supply chain of that. People create plastic out of oil and gas, and then they put things together and sell it. So, that's not going to disappear overnight, right? But when it comes to energy related to oil and gas, you know, those trucks and tankers and the gas stations, they're going to disappear, right? Because you take your aftermarket. If you look at the entire automotive sector, where you drive your car, to the local auto mechanic to change the oil filters, and whatnot, that's gonna go away. So, that part of the channel will disappear. But there are other parts of channel that will evolve. Like the way we're talking about influencers, right? A lot of the product today are sold through word of mouth, because the buyers are going online and searching. You no longer have to drive to a local store to find what's on the shelf. And maybe you heard an ad during a sitcom, therefore, you relate the two together, right? By that time, when a buyer goes to a shelf, he or she pretty much knows what they're going to get. Therefore, at the point of sale, the switching is a price-driven switching versus a value-driven switching, right. So, the role of the channel has greatly changed. So, channel is going to be here, but the broader ecosystem at a play, you know, at a much bigger play, and re-architecting of the value chain. And we have an incredible inflection point, even though the media is all doom and gloom about what's happening with the economy and inflation and the war. But the reality is, our global economy is getting re-architected with a digital backbone. And it's going to be green, it's going to be very likely local, it's going to be super connected, and it's going to have a consumer base. When you look at the Gen Z's where they're coming on board. They're buying a very different way. So, think we're gonna see formation of different clusters of influencers and solution providers that didn't exist before. But, also, at the same time, others who are so-called from the old school, will dissappear.

What I'm hearing, I think is a channel partner whose entire purpose is to help a customer buy, is probably not needed as much anymore. Right? The act of buying is pretty simple and straightforward for all kinds of products these days, given ecommerce and the internet as a whole. But what you do with what you buy, how you put it to work, how you get value out of it, that's where channel partners can bring a ton of value to the table. Because they can teach you or show you, guide you on how to put to work, the thing that you bought? Is that a fair way of describing it?

It is only one way of describing it. I mean, if you take, you know, what you just said, and maybe from a visualization perspective, we can visualize a two by two matrix. On the X axis, we have solution types. Things that are transactional toothpaste, or a switch, or a router or something that very transactional. It doesn't require a lot of knowledge to buy. The risk of purchase is low. And then you go to the same X axis further right, it's a more complex buy, right? You're buying infrastructure. More there, at a social level, laying out railways, or transportation infrastructure to all the way enterprise infrastructure. And then you look at on the Y axis, number of solutions required. Toothpaste is toothpaste, you don't need anything with it, maybe just a toothbrush to complete it. But, as you go up on the Y axis, if you're looking at an infrastructure level, then you have multiple layers of solutions to it, right? Going back with a car, you need batteries, you need chipsets, you need motors, you need, you know, all of the above. So, depending on how finished and finite the product is that can be looked at as transactional, the influence of the channel that's left, the buyer has more control. More complex the solution is, more influence the channel has. Because you consult, you design, you deploy, you upgrade, you maintain it. And an organization, when you look at something like an IBM Global Services, they are a channel for computers and chipsets and hardware. And they would put together a factory manufacturing floor all together, there. They have a great influence on you know, every component that goes in there, right? But if I'm a reseller that just carrying a PC in my trunk to go sell into a small business, that business is not there anymore. So, I think we're seeing evolution of more complex solutions where a channel plays a very, very important role in selecting and designing and defininf. But also, on the other hand, the buyers are smarter today, they have lot more information in their hand because they want to do this research on their own. Therefore, you know, things that tend to be transactional, and used to be sold through somebody else is going direct.

Got it. That paints a good picture for me. Now, maybe shifting gears a little bit from the why the channel, what is the channel do for you that sort of thing. And let's let's talk a little bit more about building a channel. An area where you've got, certainly, a great deal of expertise is bringing technology to the table in terms of building a channel. Technology that helps with collaboration, I think is what I heard in your intro there. So, maybe you could tell us a little bit about what different types of strategies, or tools, or technologies end up delivering the highest impact when driving growth through the channel. Marketing campaigns, compensation models, specific tools that does it. What really delivers the highest impact for growth.

Okay, so, there's a lot there. So let me try to answer your questions in layers. So, let's go back to the first question or ask why a channel. So, let me go back to use the example that I was using at the beginning of the discussion. That shipwreck in Singapore Harbor, you know, that they found, that was carrying inventory from China to across the India coastline, you know, to all the way to Italy. The number one purpose of that channel was reach. You are trying to reach a set of buyers that you cannot go by yourself. That is very much there today that was there yesterday. What is also there today is the consultative nature of when you're deploying something very, very complex. But you require multiple pieces to be put together that you cannot figure out on your own. Therefore, that is also there. So, take these two dimensions: on one side, you're shipping in pottery, very transactional thing, you know. Put it on a boat and going into another piece. So, that transactional pieces today are intermediated by internet because you can order them directly. Go to alibaba.com and you can get everything from China delivered to your doorstep. You might have to buy in 50 pieces, but you can get it. You don't need a reseller for that, right? But if you're trying to add a room to your house, you need a general contractor who's gonna have an influence of all the materials that they're putting together, right? And building floats through a channel. I may have to get a permit, the local county play the role, or local city plays a role. So, depending on what your product is, and who you are trying to reach, channel may or may not I play a role. So, for example, if I simplify, like the Alibaba example, if I am selling, Alibaba is the channel to somebody in China manufacturing a product, they happen to be the channel online, right? Selling direct, they're getting a margin just like Amazon is. But if I'm a software vendor, I'm selling directly to someone like Sugar, right? Or our product. For selling directly to a buyer, I may not need a channel partner to go sell that directly. But depending on the complexity of the requirement, like when I think about the incredible infrastructure, you have the solutions you provide, I can automate end-to-end using a Sugar infrastructure. But I may not have the knowledge, right? So, I'll look for a system integrator that can come in my design, my front-end, my marketing, my sales processes, work with those functions, design the form, then the flow, then the approval, routing, all of those things, right? So, suddenly the system integrator for Sugar or same exact thing for ZINFI, they may not be a fulfillment channel, but they are a consultative channel. Without that, the customer will never have the full product or full experience that they need to have. So, the first thing first is channel is about scale. Channel is not something you just go by partner on the side, just for the sake of having a channel. And channel also has an intrinsic cost. You know, just like the way when you build a product, it takes six months, nine months, 12 months, 18 months before the product hits the shelf, and you can see return. You have to make an investment in the channel. So, it is one of the most strategic decision, you know, companies and leadership can take whether to go direct, and whether to go by channel. If I take a run-rate business, let's say, you know, your marketing cost is five to 10 points, and your sales cost is 20-25 points, overall, at a P&L level, you're staying less than 30 points. In the beginning, if you're trying to develop a channel, your channel development cost and fulfillment costs together, 50-60-70 points. It may or may not make sense at all to develop a channel. But on the other hand, when you're selling a complex solution, where you're you building competency, building stickiness, grabbing that ground, that boat or ship, you know? They had routes that they owned, right? Therefore, they control the flow of the goods. So, same exact thing when you have a set of partners around the world that have high-level of domain experience, whether manufacturing agriculture, mining, pick-up vertical, right? Because channel is the last mile play. Since you can't go direct, you need somebody to fulfill the trade or complete the solution. You need somebody in that last mile. And that is stickiness. So, channel plays essentially two roles. One is cost reduction. You reach more people at a lower cost, eventually not in the beginning. And second, you control competitive penetration into those marketplaces. Because of your presence. So, when you look at most of the ecosystems today, you know, whether they're in the software space or in the hardware space, I was talking about my own experience in Honeywell, when you look at aerospace. In aerospace, the entire supply chain is very, very captive, because it's so regulatory-driven. The first thing in Aerospace is safety. Before you think about anything, right? So, therefore, every supplier right with a national security perspective, or public safety perspective, has to have some level of certification, that knowledge into that entire ecosystem. Once you get your product, then it's very difficult for someone to displace you, right? And those life cycles of the product tend to be you know, an engine lasts for 30 years. Right? It's not like a toothpaste. So, it all depends on what you're trying to achieve, scale you're trying to achieve, how you want to play, but channel has a very, very important role to play.

Can we talk about the the training for partners? Or I'm thinking of any business that's going to be partnering or part of your channel fulfillment, part of your ecosystem? You just hit on something that I think is really important, which is the training or certification, what workflow automation tools or other technologies have you seen work really well at optimizing the partnership between a business and its partners in that regard specific to training or certifications?

We'd hear about this all day long from our customer base and their partners, right? In one side, the Internet has been an amazing enabler. From a technology platform perspective. It has opened up so many routes, but it also, on the other side, has caused fragmentation and explosion of information. And we're all super busy, super loaded through you know, what their social media is, where the direct contact calls engagement. So, partners are overwhelmed. And the rate of change is speeding up. But you think about 10 years, right? California is supposed to stop selling gas-powered cars in 2030. And we're sixth largest economy in the world. So, that transition, the channel has to bear with it. So, you have to recruit people, you have to train them, you have to enable them. And you can't just bring them into so-called a partner portal, open them up to millions of information, have them figure out what's in there, what they need, right? So, one of the big thing that's happening with the explosion of this word called ecosystem where you have various types of partners, you have influencers, you have consultants, you have designers, you have people who actually carry products, people who deploy who upgrade, then you have people who are impacting regulatory bodies or standards committee. You have all these people in an ecosystem, right? And if you as a vendor, you want to maximize your presence and capture, you know, your fair share of your profit from the market, you have to have engagement with each of those players in a very unique way. In the old way, you would open up a portal, and I'd say go at it, figure out what you need, that's gone. So, this notion, along with the ecosystem, and we're driving a lot of the conversation with customers and analysts, is called hyper-personalization. And it's tied to pathways. So, if I'm, you know, a consumer influencer, I'm selling cosmetics or whatever. How I need to be on boarded by a consumer brand is very simple, but I still need brand control. Therefore, the assets that I promote through my Tiktok, our YouTube channel, need to come from the vendor, right? So that I don't distort putting up things and destroy the brand. So, therefore, how I onboard an affiliate partner, or an influencer in the consumer space, or you also have influencers in the business space. Let's say a storage in a consultant, someone who is designing, you know, storage infrastructure for IT. It could be just a blogger that's writing on various types of storage, and that person is placing products in his or her writing. That's an influencer. How you want but that blogger is very different than a system integrator, or a main fracture, or a partner with deploying is different. So, one of the main thing that we are seeing, and, you know, and that's why we exist, is to really enable. Broader the channel or broader the ecosystem, more types of partners you have, more hyper personalized halfways. How you onboard? How you training? How you incentivize? How you performance-manage? Are you even transitional partners that are not performing? They need to be completely and dynamically configured, deployed, managed, right? And that varies by country. So, if you take a workflow that works in the US, and North America, because of German regulations, it may not work at all in Germany. So, you have to redesign the pathway completely, differently.

It sounds like there would be a pretty significant investment behind these pathways that you're describing in what you just said. Someone would need to prepare, deploy, make sure also that your partners or your affiliates are going through the pathways and are completing them, are learning the content. Is that fair to say that that's a pretty big investment for a business, albeit a worthwhile one?

I mean, in the beginning, when Clint asked, you know, relevance of the channel, and I said, you know, it's about scale, it's about building competitive barriers, so, it's a very strategic decision, right? So, when you're investing into building out an ecosystem program, you have to really think through. The amazing thing is, because of the cloud for platforms like Sugar and platform like ours, the actual IT infrastructure costs, like SAS automation, is a fraction of your general investment or ecosystem investment. Most of it goes into designing the strategies, like who are you going to recruit? How are you going to onboard? What is your business proposition for that type of ecosystem partner? So, you have to design the programs, you have to design the processes, which may vary by countries, you have to have the people infrastructure in place, right? You look at, you know, a typical as in pre-Sugar combined deployment may cost anywhere between $25,000 to a couple $100,000. But your overall investment in the ecosystem could be millions. So, the reason we exist is to connect into systems like Sugar that allows customers to manage their business processes on the direct side, end-to-end. We augment that ability on the partner ecosystem side by giving them visibility, predictability, and control. Because one thing that we know for sure is not going to happen in 2023: the Fed is no longer going to print free money. So, every CEO that's out there, they're looking at their operating costs, looking at their, using your word, investment, and trying to rationalize, right? So, when we enable through platform like ours enable, you reach a broader audience at a lower cost with better control, and you build partner loyalty, because you're putting them through Personalized Pathways. So, they are hyper efficient in what they do, how they take care of the customer, that they're either influencing or serving.

Putting that together in a couple of thoughts there. I asked you earlier, can you name off some specific techniques or tools, or that sort of thing that you've seen be very effective? And you answered, I think it's less about a particular tool or technique. But it's more about putting the right strategy in place for that particular partner? What's the thing that's going to unlock and growth for that partner? How do you help that partner drive sales? How do you help that partner get in front of more of their end-customers with the right information at the right time? So, you got to really focus on that enablement for that hyper-personalization of the enablement for that partner. And that's the best way of approaching especially in a world where I think you were describing how partner companies are being inundated with information from all kinds of different vendors, how do you stand out and solve their particular problems at that moment in time? That's the strategy that's going to drive growth? Did I hear that right?

Yeah, very much. So, I mean, you have to be relevant to everybody you touch from a business proposition-wise. And you have to be hyper-efficient in serving their needs and enabling them. So, if you're selling a transactional product, and you have a whole bunch of people that carry your product, and make a few points, how you serve them, it's simple. No partner portal, you bring them in, give them priceless sales tools, and you're done with it. But if you're working with somebody who has a long sales cycle, during proof of concept, you know, multi-month deployment, then how you serve that partner through the entire lifecycle engagement with the end customer, the tools are going to be a full-blown partner relationship management platform, right? So, the the key is to find a platform that is flexible enough, because if you're a large, complex organization, chances are you have all of the above. You're selling transactional product, but you're also selling highly complex product. So, you need a platform that can address both ends of the spectrum. Therefore, from a partner perspective, they get a hyper personalized, relevant experience.

Sugata, you've mentioned something earlier that I didn't want to move past without talking about it briefly. And that was around controlling the brand. I've seen that it is hard to preserve a brand, especially when you have so many partners involved, or members involved in your ecosystem. Aside from the technology, the things like onboarding, and ongoing training and certifications, do you have any suggestions on what businesses can do to maintain brand reputation and consistency as they're bringing on more folks in their ecosystem or maintaining what they have today?

Yeah, so brand, you know, essentially, in a broader sense, Peter Drucker used to say it's the fulfillment of a promise. And so an organization promises something to a customer. And it has a visual representation to the logos and identities, but it is a physical representation of fulfillment of the product. Going back to the tongue-in-cheek comment we were making about full self-driving cars, you know, it's an incredible brand of Tesla, but when it comes to fulfillment of that, it is not there, right? So, it's very important when a brand goes through the channel, it makes sure that promises I carried through, you know, to its true intent and can be fulfilled. So, for example, making sure at a very transactional level, the product specification, right, no price gouging. So, the prices are restricted. Certain government requirements, forcing you to maintain Manufacturer's Suggested Retail price. So, therefore, you know, there is a part of brand that very transactional, they said logos, how you look how you feel, then pricing and functionalities. But then there's another part of the brand, which is consumption-driven as you're using the product. What is your experience, like? Right, if you have an issue, if you call the vendor do you get support? If you're not buying from the vendor, when you call the partner do you get support? Is the partner qualified? Because there's a churn at the partner organization. So, when it comes to brand consistency, while channel gives you reach, it also makes it very, very difficult for you to control the brand promise. Therefore, you have seen, you know, Starbucks moto has been, they go direct, they don't have franchises. On the other hand, McDonald's, they're predominantly franchises. So, depending on the solution, or the product, you're selling, the more it's experience-centric, brand matters the most. Because you need to control every piece of it. More, you know, it's transaction-centric, then control of the brand, control of the prep, you know, offer, becomes easier. So, we see a great variety of that in our in our customer base, where they're selling transacting products, how they onboard partners, how they certify partners, what tools they get them to be very simple? But if they're selling a solution, they control the material that the partners share the emails that they go out, and they use automation tools that we provide, the allows the vendor to control to the nth level of detail what the partner can or cannot do using their rent material, right? That's on the transactional part. But on the other side, you can also have what's called closed distribution. You don't sell a product to every partner you have. You sell your product only to a set of partners that are certified to sell certain products in certain segments. And that is part of the brand control also. So, therefore, they said, channel is an incredible place, ecosystem puzzle is the better way to, you know, define it, because just like biological ecosystem, the diversity of it is huge. But then you have to design programs to address every aspect of it, and brand being at the center of it. But it comes down to the fulfillment of that promise, and how you control that promise.

Well, let's take that as a chance to talk maybe about the traps that companies that are building out of channel could can stumble into. Let's hear some of your hard won advice here. What are a few things you've seen go wrong when working with or three partners and how to avoid that?

Yeah, so really, very greatly. If I may simplify, let's talk about emerging companies that are starting up, growing fast. You know, they have one set of challenges, versus companies which are established, you know, Fortune 100 brands. They have another set of, you know, challenges. So, let's talk about the companies that are growing with a single product or multi product companies. One of the mistakes we have seen is that without triggering out the direct fulfillment model, some things cannot be sold direct. And keeping those aside, they have to be sold through some sort of distribution network, because of local permits local reach, you know, the ship that I talked about a bit, just out of reach. You need somebody to carry your product. But if you have an alternative to sell direct, we see especially companies that are starting up and growing fast, they think the way to reduce cost of sales is by building a Partner Network.

Probably the most obvious starting point, when you're thinking about why do I want to start a channel, it's cheaper for me than if I built my own. But I think you're about to tell me that's not necessarily the case. Right?

Yeah, and especially, you know, if you're trying to sell your product globally, if you don't have a global support infrastructure, you have localization issues, language issues, you know, there are other complexities that come in, you may be better off hiring some direct sales and marketing people carrying your product in those markets, establishing those workflows before you bring partners on board will only get frustrated and, you know, sort of spread a bad name. So, therefore, I think it's very important for organizations that are growing fast. And we have seen several of our customers that brought us in for partner management, they have only done so once they had a very established direct go-to-market, and they understood what the end-customer really needed. And what pieces of that solution that they're delivering could be augmented or replace by a third-party organization. So, that that's on a prospering organization. So, for established organization, one of the main areas of challenges that happen is when large companies buy smaller mid-size companies. Because what happens is you're rolling those organizations over. And if those organizations have channel programs in place, or partner program in place, too often, what happens is a lot of those credits, or a lot of the ways of working, you know, they don't really get carried over to these larger organization. So, in the process, if let's say, you're, you're a multi-billion dollar organization, we just acquired a 50 to $100 million company that predominantly sells to the channel, and you rolle them up into these broader big, you know, enterprises, those partners get frustrated, and ended up quitting and end up going to a competitor. So, integration of those smaller organization into a broader organization and rolling the partner program over, over a multi-year cycle is absolutely critical. And both of these cases, you know, I talk less about tools, because that's the last piece; it's all about strategy. Like, who are you going to bring in? Why should they do business with you? How do you replicate? So, just like the way when you're starting with business, you go to a VC for funding, they would say: How many people have the problem? You know, how big is the problem? How much are they gonna pay for it? Can you serve that consistently across everybody that you have the you know, that has the problem, right? Then they will fund. The same exact way CEOs and CFOs need to look at the channel organization before they go roll out saying: which partners are you going to bring on? What are their needs? How are you going to serve, or how you're going to fulfill? Because before you talk to the end-customer, you have to make sure these middle entities that you just brought in, they are happy, they want to work with you, right? So, in both of these entities, where you're starting up, you need to be cautious and careful and thoughtful about we're engaging with them. Now you're going to market in what pieces. And existing large organizations need to say I just paid, you know, spent multibillion dollar acquiring a company that has velocity channel. Let's not mess that up. And then tools and techniques and deployment when it comes to our platform, integrating with yours or integrating any other third-party. That's easy, because once you know what to do, you can take any configurable platform like ours, even design, deploy, and roll it out very quickly. But most people tend to trip in those strategic sort of selection, you know, alignment from an overall broad business perspective.

Yeah, excellent reminders. Especially the bit about the integration of companies buy out. I think that that's just another thing to add on to part of your integration planning being met, you want to make sure you're considering the channel or ecosystem.

The main thing I was hearing in there is companies that think about building the channel as a cost-savings mechanism, first, are probably setting themselves up for failure, right? If you're, if your whole thought process is around, go to market on the cheap, that's probably what you're gonna get in the end. And instead, if you're investing in the channel to get to buyers, that you wouldn't be able to get to otherwise, but you're going to invest it, you're going to make it real, you're going to train people, you're going to certify people, you're going to help them knock down the barriers, then you're going to have a successful channel strategy. So, that's definitely what I was hearing in there.

Yeah, 100%. I mean, you have to begin with the end in mind, right? You have to begin with the end-customer in mind. What that experience is, and how you piece together with other organizations. Unless that's clear, channel, or partners make it even more complex that needs to be.

Well, thank you so much Sugata, this has been really helpful. I'm learning a lot. I do have one final question for you. We ask everyone, and I have a feeling I know what your answer is going to be. But we'll ask anyway. Where can our listeners find you and learn more about you?

So, from a company perspective, the best place to go to zinfi.com ZINFI.com. And from a personal perspective, I tend to write, post quite a bit on LinkedIn, so, they can go look up my name: Sugata Sanyal, they will find me there. And hopefully they can also find us in SugarOutfitters as an application partner for Sugar CRM.

That's right. Coming soon! Fantastic. Sugata, thank you so much for your your wisdom, your time, all the insights that you shared with us today. This has been a masterclass on how to build a channel-lead growth strategy. Thank you for your time, and wish you all the best in these final days of 2022 as we go into 2023.

Thank you very much.