Compromising in the Face of Conflict

Problem

As a startup, the product is incredibly important, but the other half heavily relies on distribution. Many companies with great products fail due to distribution. This is where working with channeled partners has become prudent for our company, allowing us to leverage those large partners to sell through our product. However, in working with this indirect, channel-based sales model, conflict may arise between your strategic priorities and those of your partners. How do you sell through your product if the customers' needs or wants are in conflict with the channel?

Actions taken

"COMPROMISE! Resolving this issue is always challenging. The harsh reality is that you have to live with the conflict and not sell your product as originally intended. If you aren't ready to take on that truth, then that is where the real conflict can arise. Simply put, the 'cost' of doing business is having to rely on others, and not being able to sell through your own product."

You do have the choice, however, to make this reality less daunting.

• Make yourself aware of the pros and cons that come with choosing a channel based model.
• Use the customer as the tip of the spear so to speak, to go and push your partners to do better and to do more.

Lessons learned

Pros

• Gain immense leverage because you are able to keep costs down.
• Hiring hundreds of salespeople to sell your product becomes obsolete, which makes supporting a sales team easier.
• Selling through a large distributor will offer your startup a brand to push through your product.

Cons

• Lose control over the distribution channel.
• Conflict between you, your product, and your partner.
• In our experience, we are typically obliged to having to use the payment device of our partner which tends to not be as great for the user experience perspective. The customer ends up have a problem with either speed or functionality. It can be frustrating because you do not have a lot of choice in the decision.
• It is easier to push the company or partner forward through a customer based approach. If it is coming from your agenda, under the pretense of getting things done, it won't go as far as shared customer concerns will.
• Pick the battles you want to fight, because if you try to fight them all, you will lose sight of the goal, which is of the distribution and partner relationship. Even though you can be in agreeance that the plan you have in place is better, it is in your strategic interest to look ahead on where you want to be with this partner in five years and aim for that.