

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

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.
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davismwfl
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.

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patio11
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.

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angelohuang
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
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.

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justintocci
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.

