Ask HN: Does reseller model work for a SaaS pre-revenue startup?

6 points by angelohuang 11 years ago | 5 comments

We are working on a team shared inbox product. We are still a pre-revenue startup. Does reseller model work for a SaaS pre-revenue startup? One of our friends has connections to resellers, but we are not sure if this model will work for us.

davismwfl 11 years ago |

I'd say be careful of the reseller channels. Unless they are directly tied to what you do in some way, they almost always will provide you with lower quality signups which can create havoc on your cancellation rate. That also means they can overwhelm you in support incidents and calls etc. Not to say they are all bad, obviously they aren't or they wouldn't be in business, but they have to be aligned with your product offering and be carefully selected. Which goes to patio11's point that you aren't in the power seat right now, so its hard to be selective etc.

In my opinion, you are better off looking for and partnering with someone who has a large email list, or has a large social audience etc that could benefit from using your product and having that person help you in the sales cycle. We have helped others do exactly this and it seems to be the best way to speed up the process. I have had so much success with it for clients, we are using the same method for our new SaaS product we are launching. I expect with their list we will close a small percentage of the users in a 90 day period, but that small percentage is still way more people than I could reach in the same time period. And frankly companies/people love these deals if you have a good product because it makes them look good and helps their brand too, not to mention it adds revenue for them with little work.

patio11 11 years ago |

It is, practically speaking, extraordinarily difficult to get resellers to do the work of building your company for you. After you have sales there will be any number of them trying to insert themselves into sales which you've already won for 20% of the sales price, though.

angelohuang 11 years ago | |

Hi patio,

So you think they are all genuinely bad for startup, correct? The connection we have is a person who has 300+ connections to marketing agencies. He thinks our product can help those reseller's clients. But in reality, those end users will be 3 layers away from us. Again, we have no power right now. What would you recommend? (p.s. I was about to email you, then saw your reply.)

patio11 11 years ago | | |

They're probably not going to put huge amounts of work into marketing your product and selling it to their customers until their customers are coming to them saying "I want to buy angelohuang's thing. What do you recommend?", at which point they will recommend "We can certainly do that for you!" and then they'll call you and ask for a discount.

I have, unfortunately, a few dozen experiences of this general type, against one pro-active sale from a reseller.

n.b. My answer for "What is your discount?" is "Nothing for now, but I'm happy to award you a discount retroactive to the first dollar after you hit $100k in volume." This has never blocked a sale from happening because they're not making sales for you, they're inserting themselves into sales that their customer / your end-user has already decided will happen.

justintocci 11 years ago |

Sorry guys. I've asked questions about commercial product strategy here too and at best there's just no interest. Feel lucky nobody got hostile and flagged you like crazy.

Basically, unless you are connected to y-comb, or at least have taken millions in investment, nobody here cares.

If you do find a good forum for these sorts of questions let me know. Otherwise, try patio11. He's one of the good guys. You should email him directly.