Ep. #715 - What are Sales Channels?
In this episode of Startup Hustle, tune in to Part 38 of “How to Start a Tech Company,” as Matt DeCoursey and Matt Watson talk about sales channels.
Covered In This Episode
As a tech startup founder, it is important to know which sales channels are the best for your product or services. But first, you have to know what they are. You have to study which channels suit your product best. To help you decide, tune into the always-entertaining Matt and Matt show as they define sales channels.
Whether it is retail, direct-to-customer, or B2B, the Matts explain their advantages. However, they emphasize that tech companies’ sales channels are slightly different. They also provide great examples to understand better how sales channels work. Lastly, Matt and Matt point out that you should use the sales channels that suit your tech business.
Join Matt and Matt in this Startup Hustle episode to learn more about sales channels for tech companies.
Missed the previous episode? Click here to listen to the entire series.
- Introduction to Part 38 of the series (0:08)
- What is a sales channel? (0:29)
- Market in a marketplace (3:42)
- Partnership as a sales channel (6:01)
- How Shopify is like an integrated solution or an extension (11:03)
- Four main types of sales channels? (16:36)
- Sales channels you need to consider when starting a tech company (18:47)
- The difference between a marketing channel and a sales channel (22:23)
- Sales channels are changing and becoming more sophisticated (28:09)
- Are sales channels great? (32:41)
- Key Takeaways (38:41)
- Wrapping up (42:42)
You just got to be in the marketplace, right? It’s no different than if a car dealer is trying to sell cars. If their cars aren’t available on cars.com, autotrader, and all these places, they just don’t exist. Right? You got to market on the marketplaces.Matt Watson
So what I’m encouraging here is to get innovative and get sophisticated or even simplify it but look for the things that people are starting to do that are setting trends now. Because there are probably a lot of people out there that are looking for other people to, hey, come try this new method out. If it’s quick and easy to get into, then go with my model of test, test, test, and see if it works.Matt DeCoursey
I think sales channels are great. It just depends on the type of product you have. And if they work, and at Netreo, for example, they have a lot of partners. They get over half their business from these sales channels that are big partners, and they’re kind of win-win partnerships.Matt Watson
Most sales channels want to see you have traction. They want to know you’re robust enough, resourced enough, or have enough longevity that they’re not going to put you in their sales channel and then get burned.Matt DeCoursey
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt DeCoursey 0:01
And we’re back. Back for another episode of Startup Hustle, Matt DeCoursey, here, with Matt Watson. Hi, Matt.
Matt Watson 0:06
Hey, how’s it going?
Matt DeCoursey 0:08
Oh, it’s going pretty good. You know, I’m just trying to sell stuff as normal. And I’m pretty excited to talk about that today and part 38 of 52 of our How to Start a tech series, a tech company series.
Matt Watson 0:26
It’s been a long journey. I can’t believe we made it this far.
Matt DeCoursey 0:29
Yeah, but, well, we are a little behind. But we’ve promised to tell the real story of entrepreneurship and with that, things don’t always happen on time. And they don’t always happen in the sequence or at the rate of expense or anything else that you need to occur. And, you know, we’re going to talk about something that will help ease your expenses, which is selling our topic today is what are sales channels. And I think this is a pretty interesting topic. For both of us, we both have some experience, sometimes good and sometimes bad. Before we get into that today’s episode of Startup Hustle is brought to you by FullScale.io. Helping you build a software team quickly and affordably. That’s what we do. When we’re not doing this. We try to help software companies and tech companies, build teams of expert developers and we want to help you so go to FullScale.io There’s a quick form you fill out that says get started and we’ll get back to you about how we might be able to lend you a hand. Now, Matt, when you think of sales channels, what do you think of
Matt Watson 1:33
Matt DeCoursey 1:35
Does that count? Is Amazon a sales channel?
Matt Watson 1:38
I would say so. Yeah.
Matt DeCoursey 1:39
I don’t. That when I think sales channels I think that that I think a little differently when I think of a sales channel? I mean, that’s like, I mean, yes, you’re right. It could be a sales channel for,
Matt Watson 1:54
For physical goods.
Matt DeCoursey 1:42
And for physical goods. Yes. And I think, and yes. So you’re right in that sense of the word. But at the same time, I think more of a marketplace, which I guess a sales channel is typically a marketplace. But when I think about sales channels in regards to a tech company, I think about getting your product solution or software in front of or partnered with other businesses using the existing platform users or clients that they have like plugging in to, you know, like, well, for example, at Stackify you may have wanted to create a sales channel and you might talk to a company that’s like, okay, sure, we’ll partner with you. And we will make a one click install for people to do this or that or whatever. And yeah, you’re so right about the Amazon thing. I think any anywhere, sales channel is the is anywhere business to business or sales organization goes to market and like through direct or indirect routes. But when I when I think of other examples of sales channel, I mean, a physical retail store. Yeah, still sales channel, even
Matt Watson 3:02
When we’re talking about retail, there’s a lot of different sales channels that make sense we talk about software becomes a little different.
Matt DeCoursey 3:10
Yep. Yeah. So you know, I mean, other things that are just common sales channels. I mean, we got, you know, ecommerce websites. I mean, that’s, that’s that kind of marketplace feel, you know, so Amazon, eBay, Walmart, you name it. I mean, there’s a million different things, and I guess on many levels, even things like DoorDash and Grubhub. Yeah, our sales channels for restaurants. So fully, there’s a million. It’s where are you going to tune in to sell more stuff?
Matt Watson 3:42
Well, it’s, it’s you just got to be in the marketplace, right? It’s, it’s no different than if a car dealer trying to sell cars, if they’re not listed with their cars aren’t available on cars.com and autotrader. And all these places like they just don’t exist. Right? You got to be on the market on the marketplaces.
Matt DeCoursey 3:59
Yeah, I agree. And, alright, here’s here’s the antiquated old version of a sales channel, grabbing a catalog. Who was the last time you had one of those?
Matt Watson 4:11
I have to say, though, I just got one from Lego and Amazon. And, you know, my kids are gonna go through there and circle everything for what they want for Christmas. So
Matt DeCoursey 4:20
they’ll use those my kids just did the same thing with their birthdays coming up. And
Matt Watson 4:26
Amazon is pretty smart. With that.
Matt DeCoursey 4:29
I’m looking for I’m looking for a good sales channel to find a legitimate Batman actor, as opposed to the one we had three years ago. And for those of you that might be entertained with any details of our personal life, my wife hired a Batman actor for my kids birthday party. And is it fair to say that a wasn’t Batman and V was certainly not a good Batman actor.
Matt Watson 4:55
It was epically bad for sure. Yeah.
Matt DeCoursey 4:57
We had fun with it, though. We had fun.
Matt Watson 4:59
We were still having fun with it.
Matt DeCoursey 5:03
Don’t say Batman around my wife, please, we know better than that. So you know some other things and stuff, we’re just kind of going through it when we get into sales channels, some other less of sales channels, even on this like very small and personal level, like, you have things like private sales and home shopping parties, like so many people have have a small business, and it’s related to hey, I want to sell you makeup or whatever. And then even sales channels, maybe things like like a call center or you know, any kind of outbound stuff. A sales channel is also could be like retail outlets and a bunch of stuff. But we’re going to talk a little bit more about it on a tech level. So it fits in with our, you know, with our series here. So Matt, what, what, what experience have you had with sales channels? Or why do you like I mean, and why did they interest you?
Matt Watson 6:01
Well, so if we go all the way back to the VinSolutions days, you know, we had created software that would print window stickers that you put on a used car. So if you go to a car dealership, and you see the stickers and the windows that say like what the price of the car is, and what equipments on the car and the number and color and all that kind of stuff, right? And our software would print those, but we needed the paper to print the stickers, right? And the dealers would want to have them custom designed with their logo and all that stuff. So we got a sales partner that sold the paper and had the relationships with all the car dealers in the country that sold them different kinds of paper, you know, for the finance departments, all that stuff, but also the stickers. And so that was a great sales channel for us, right? Like, oh, we’ve got like, these hundreds of salespeople now that that sell other kinds of paper goods, and they could sell our software, to these car dealers. And we thought we were gonna be billionaires with this partnership. And it literally went nowhere. We spent like six to 12 months trying to make this work. And then today, it’s just really difficult for people who sell paper to sell software. And so, you know, the point is, is these kinds of sales channels can be highly lucrative and really powerful, right? But sometimes they just don’t work at all. And you were just telling me about, I don’t know, can you can you talk about, like what homebase is doing?
Matt DeCoursey 7:27
Yeah, and yeah, so, um, one of our, our guests, you’d be talking about, like, what they were doing with partnering with someone?
Matt Watson 7:38
Yeah, like, they’ve got some really good partnerships that are really key sales channels for them, right. Yeah, a
Matt DeCoursey 7:43
local startup here in Kansas City. homebase.ai, and has been was one of our original guests, good friend of ours, like Miller, and he’s done an amazing job of growing the company. So at heart, they’re an IoT company that has lots of solutions. And, you know, we talked about a lot of things he was actually he was the first person to introduce me to the theory of time arbitrage and, and, you know, in the problem they solved was helping people get in and out of places, but to create an expand on a sales channel, they made a deal with Walmart. So Walmart wants to be in the food and grocery delivery game. One of the problems that occurs is people aren’t always home to do that. So they so homebase partners with them, and helps Walmart deliver groceries, so they, they can come and put the groceries in your home and in your refrigerator, and you come home and all the stuffs there. And that’s a great example. Because if you look at the sales channel nature of that, that means that they’re going to be selling home bases integration. And so it’s kind of like putting unlimited boots on the ground. And that’s, you know, that’s where that’s a great example of a sales channel working and, you know, the reason I asked you the same question first was, you know, from past episodes, we’ve had so many so many conversations that were related to sales channels, can it not played well can create a lot of hype and, and a shitty return sometimes. And, you know, I’ve gone through that with Giga book at one point too, because in the same way that you you’re like, looking at your early stage, like this is going to be a huge home run. But one of the things you have to consider when you get involved with someone else’s sales channel is the fact that you’re just might be like, one of like, 600 components or things that they do and you know, and and the thing is, is just because you’re in the end, you know, I think when it comes to tech companies, the the biggest broadest example you can look out or all these things that have the quote like one click install or integration. Now, these have gotten a lot better over the last few years, but You know, 5678 years ago, it was basically like you are an icon on a page. You know, it wasn’t. And so the thing was is like you were they were just kind of promoting you or whatever. Now, in some in a lot of cases, if you’re that, well, okay, let’s talk about Shopify for a second. Because I think Shopify is a great example of a widespread use of sales channels for software marketers, they literally have like a massive app marketplace, that does a ton of different stuff you can buy for it, you can pay for it there, I mean, the app shit new the apples, the apple, the apple, the App Store, you know, or the Android, you know, the Google Store, any of that are great sales channels as well, where they’re going to actually put you in front of people, they collect the money, they pay you out, stuff like that. Those are the things that can really work. But at the same time, all of those they, I mean, in some more than others, require a lot of work just to get in like the one you were mentioning, how much time, effort, energy and emotion did you put into that? To then realize you are just going to hear, wow, wow, wow.
Matt Watson 11:03
We spent months on it, and you know, trying to go out and train their salespeople and meet with them and do all that. And so what what you just mentioned about Shopify is I think a great a great example of what I would call it’s like an integrated solution, or like an extension, right? Like, you know, I buy Shopify, but then Shopify has all these partners that do other things, like maybe, and I’m not an expert on Shopify. So I may speak, speak out of out of my butt on this one. But let’s go into Shopify, and they have some special stuff about like how to do shipping rates, or how to charge for taxes, or how to sell a certain type of product or customized things, or advanced reporting, or like all these kinds of like extension things, right? Like Shopify doesn’t do all these things, but they have partners. Well, Shopify wants those partnerships, right? Because if I’m looking at using Shopify, I might have some requirements and like, oh, the standard Shopify doesn’t do this. Oh, but they have a partner that adds that functionality, right? So to Shopify, it’s a huge win, because now they’re getting business that they may otherwise not get, because of these extensions that provide this extra power, right. And if you’re a vendor that’s in that marketplace, that’s huge, right? Let’s say it’s special, like tax handling, or something for all 50 states or whatever international taxes, whatever it is, right. So if you’re a partner that’s in that marketplace, that’s a great way to get to get business. And if you’re Shopify, it helps you get business because you need that additional capabilities. So that kind of extension or integration can be huge. Another example this that might be even easier example is like say WordPress plugins and things like that, right, those kinds of extensions, and plugins can be really, really powerful.
Matt DeCoursey 12:44
Yeah, and, and at the same time, though, if you’re not a software company, that’s only just building those specific solutions, then you’re going to be back to what I was mentioning, where you might spend a hell of a lot of time building, customizing, doing a lot of stuff hoping that you get in Yeah, sales channel at all. And that was, that was what we ran into with Giga books. So we wanted to be in a sales channel for an online clothier and, and this isn’t a, this isn’t 100% sales channel. But, you know, we, it was a growth channel and definitely a sales channel, because they would have rolled us out to like 1000s of people that would have used, it would have been a big account. And I mean, long story short, we ended up spending a couple months of time energy and focus on it and put other things on the back burner only to have it kind of fizzle. And we did everything that we said we would do that we wanted to do that we could have done and we proved it out. But we got back into that thing where it was pretty clear to us at the end, that we were one of about 50 things that were going on, and we just really weren’t a priority. So you know, like, so you got to keep that in mind that like you Your priority is, as the founder of a software company and an owner of your business don’t always align so and when you Okay, so let’s we’ll continue using Shopify as an example. And by the way, we have no vested interest in Shopify, like, it’s just a good example. And I know it’s widespread and a lot of you listening might use it, or I’ve considered it but okay, so Shopify is a mega company at this point. And, and the thing is, is their sales channel is loaded with a lot of different things. You’re just gonna, you’re just another star in the sky there. So like, you have to give do a little bit more anytime you enter sales channel, then, then you want to make sure you’re getting promoted, you want to make sure you’re just off the bottom of the list, because as we make the comparison, the Field of Dreams comparison, just because you build it doesn’t mean that they’re going to come so absolutely. Yeah, I mean, there’s a ton of thing. There’s a ton of this problem is
Matt Watson 14:49
Dockerfile. Yep, we, you know, everybody knows what AWS is, right? And there’s Microsoft Azure Cloud Hosting. And at stack phi we actually spend a bunch of time to get in the Azure Marketplace. So when you went into Microsoft Azure, there’s a marketplace for like these different extensions and tools. And we got sacrifi listed in there. And it was a lot of work because we had to integrate the billing and how to do billing and all that stuff. And it was a complete waste of time. And it’s because Microsoft didn’t promote us, right, like Microsoft had no reason to promote us. And the key to all of this we’ve been talking about the last few minutes is it’s got to be a win win. The only way these types of partnerships work is it’s a win, win. And back to my VinSolutions, when it seemed like it was going to be a win win, right? Like they were going to help sell our software because they wanted to sell more paper, right, they thought they were going to sell more paper. by bundling it with their software, they thought it was going to be a win win, but it fell apart in execution. And the Shopify examples we were talking about, they were win wins, right? But back to exactly what you were talking about earlier. One of the other issues we had at VinSolutions is everybody would come to us and want us to resell their stuff, right? But it’s like, if myself if I’m paying salespeople a bunch of money to make phone calls all day and sell stuff, I don’t know, have them sell my stuff, not your stuff. Like why would I do that? Unless it’s a win win for me, right? And examples of that were like, Oh, we had to have integrations with Kelley Blue Book or some other different tools like that. It’s like, okay, we only it was like 50 bucks a month. But we needed to sell that for 50 bucks a month. So we could sell some other thing for $400 a month, right? Like it was an add on. And that’s where these these types of partnerships, they have to be win win for both parties. And then they work really, really well.
Matt DeCoursey 16:36
Yeah, and it’s not always easy to determine whether that’s going to be the case or not. So, I mean, some of that you just got to try to figure out but just just pay heed to these warnings, friends and listeners. So a couple of things as we continue to move on. First off, today’s episode of Startup Hustle is brought to you by full scale.io. We aren’t a sales channel, but we can probably help you build whatever you need help to build getting into one go to full scale.io. And learn more about how we help software companies build teams of experts quickly and affordably. Now. In review, Matt, there are four main types of sales channels, and we kind of skirted around them, I want to go back and clean up a couple of details here. You got retail, wholesale direct to consumer and b2b. Okay, so they all require a different approach. I mean, retail, as as now that I’m old, I have experience with all of this. Now that I think about it. And, you know, retail is a whole different animal and monster. It’s hard to scale. It’s hard to create relationships, it’s going through a mega evolution right now, wholesales a little different, but not all selling
Matt Watson 17:51
software, but it does exist. Yeah, not really.
Matt DeCoursey 17:55
And then, you know, so direct to consumer, I actually prior to hitting record, here I am. By the way, man, I’m in our new Startup Hustle studio right now and testing that test test test. But no, I was I did a meeting down here earlier. And I was talking to someone that is interested in using Full Scale and had an idea. And I did have to tell him I’m like now keep in mind when it goes to raising capital. You’re talking about a b2c business to consumer play. And that’s not as sexy as business to business. And now why is that?
Matt Watson 18:34
Consumers are cheap, don’t spend money on anything, though, they will spend $5 at Starbucks every single day for coffee, but will not spend 99 cents for a damn app. Right? That’s just the way they are.
Matt DeCoursey 18:47
So that’s something to consider. I mean, if you’re thinking about starting a tech company, and you know, the main thing is well, first off, businesses spend money, and then it’s and I literally use this as an example, I was like, hey, that it’s 10 times easier for you to spend your employer’s money than it is to spend yours. Well, well, yeah, of course, because it’s kind of use it or lose it or whatever. But you know, it’s something to consider. And then that’s something to consider when you’re when you think about what kind of sales channel you need to get into. Because if you if your app or solution needs to be in the Shopify sales channel, then then the the corner store is not a good fit for you. And eBay isn’t the solution either. So, you know, when we think about, you know, digital channels, I mean, I think most of these things when it comes to software, I mean, is it fair to say that the the one click Install kind of thing, regardless of where that is, it’s probably the broadest use of software companies using sales channels are something different.
Matt Watson 19:52
Well, a good example of that would be like the Apple App Store and I know Mac has one further, you know, regular Mac apps on there. have, you know, laptops and everything? And Microsoft has a, you know, the Microsoft Store and you’ve got the Android store? And, and so yeah, I mean, there’s, there’s marketplaces now for all of those that you can be in and sell your product. If you’ve got a product that that is a download and consume kind of product, which a lot of us don’t create these days, you know, if it’s a SaaS product, it usually doesn’t have that. Now, maybe it could have a component, you think about like Slack, right? Like you still download and install slack in your computer and use it even though it’s still like a SaaS product. So you get some, some hybrid things like that, for sure.
Matt DeCoursey 20:40
So yeah, you have these channel these things that, you know, if you go to search for XYZ software, and they’re like, Hey, here’s our 10 recommendations for where to go. And then they redirect you somewhere on there an affiliate, do you think, is that a sales channel?
Matt Watson 21:02
They are. And so you know, there’s a few things there, you’ve got analyst, right, you got analysts that are also a sales channel. So like Gartner and Forrester and all them, they’re absolutely a sales channel. And at Netro, we get a lot of business from those channels, right? Because you’ve got big enterprises that go to Gartner somebody and say, Okay, we need to buy this type of thing. We don’t understand the marketplace, tell us who we should talk to, right? But then you’ve got sites that just are lead generation like referral sites, you have all these things that just do reviews. So like Jeetu crowd. There’s all these things in like Gartner is one of them to Gartner has a site that does reviews. And so if you do searches, random searches, like you’re saying, like for marketing automation, or whatever, CRM software, all these things, you’ll run across these sites like Jeetu crowd. And at sacrifi. We actually used to pay G to crowd and some of these other providers to be listed in there and get leads and stuff. And they worked well, depending on the type of product you have, and all that stuff. They can be great for just lead generation. And I’ve even seen some that Full Scale could be in you know, that do offshore development, software development, all that kind of stuff. They’re they’re kind of just like listing review sites. And at the end of the day, their goal is to generate leads and sell leads.
Matt DeCoursey 22:23
Yeah, so I think a good example Capterra Yes, that’s another good one. All right. So and that’s what I was thinking I had to google it. So thank you for your thank you for talking while I did that,
Matt Watson 22:34
which is on by Gartner. Now I believe,
Matt DeCoursey 22:37
possibly so Capterra if you Google put a word in front of software, and then Google it. And they probably have a listing for that. Yeah. So now I don’t think this is a sales channel. I think this is a marketing channel. And I think that they’re different than that, right? Yes. Because I think you’re right. I don’t buy anything here.
Matt Watson 22:57
It’s lead generation.
Matt DeCoursey 22:58
You’re absolutely yeah. And so yes, a marketing channel, not a sales channel. And and I think that like bringing that up, I see you nodding your head, you’re like, oh, okay, yeah, I buy that. Now, that doesn’t mean that they’re not adjacent to a sales channel. But in my opinion, a sales channel is it’s going to actually facilitate a sail
Matt Watson 23:19
with or forgets a great way to determine the difference.
Matt DeCoursey 23:23
Yeah, so keep that keep in mind, there is a difference there. And I mean, there’s a ton of stuff so Capterra and once again, I have no vested interest in pushing them and honestly, I’ve not I haven’t been a huge fan because once I open the Giga book, I had a cap terror wrap up my ass every day wanting to ask me to outbid the next person last you probably went through it and I’m like, well, that’s great. You know, like, and, and almost holding the, you know, kind of holding us hostage in some regards. Like, I don’t know, this is this I don’t want to be too critical of them because I like what they do, but I don’t always like how they tried to do it. But one of the things was like, hey, there’s five reviews on your site by the Yelp gotten Yelp got skewered for this. So they were like, hey, you’ve got five reviews on the site. One of them isn’t great. Would you like to pay to remove it? No, fuck you, you know like and that they kept Tara didn’t do that to me. I want to point that out. They did not do that. But Yelp was doing that to people got pretty well publicized they got sued for it and got the FTC I think might even find them or something. So be careful with some of that stuff. Because, you know, remember, like, the their loyalty extends a lot of these things extends about the length of a coin. Yeah. So that’s not necessarily a win win. And you know, as Matt mentioned earlier, the Win Win component of it is is important. So Um, yeah. So back to the the definition marketing channel and sales channel, I’ll be a little different. Now, there’s an interesting, and I think this is a marketing channel as well, but is also very adjacent. So you see a lot of things like influencer marketing. And, and while it’s not a direct sales channel, it can be really effective. So let’s use our friend and colleague Eric Perkins of the Perkins brothers who is on Startup Hustle TV with us go to YouTube and Google Startup Hustle, and you can see what we’re talking about. But Eric, is a sales channel in many regards, because he makes partnerships through his YouTube channel with building supply makers and stuff like that. So they actually pay him to represent what they’re doing and now and also to use his products when building homes. So they’re kind of winning both ways, their sales channel in some regards, because he’s, they’re buying stuff with with a forum, he’s saying, Yes, I guarantee, I will use this product for my next 10 houses that I build. And then we’ll also talk about it. So that’s it’s a weird thing. And I’m bringing this up, because it’s like, almost like a mix between a marketing and a sales channel. They’re making sales with it, and hoping to make more sales by him demonstrating it. So there’s, you know, I see a future world of evolution where the subject matter expert, will people pay to, for us to talk about their stuff. Yes, podcast? Absolutely. I don’t, but I don’t sell it form, I don’t make the sale forum. So by my definition, I’m still not in that regard, a sales channel. Other things that, you know, kind of come up to is, I mean, there’s a lot of, and I still think this is more to the marketing side of things. But we may see some more sophistication develop, like right now, there’s a lot of marketing, and sales type automation, I can see a lot of that possibly evolving. You talked about AI and machine learning and the way chat bots are kind of growing, I can see a lot of technological solutions that might come up and you might be able to get on the front cutting edge of that end up going out and literally making sales without a human involved.
Matt Watson 27:13
Well, it all depends on the kind of product, right? Like there are definitely people on on Tik Tok that promote specific products but and you can click the link and go buy the product, because it’s a physical product, right? But it’s different if it’s an enterprise software solution, like I was talking to a friend of mine the other day that sells software to hospitals, and he says it takes 1218 months to complete a sale. Right? Like that’s a whole different, whole different kind of thing, you know. So it really just depends on the type of product and service that you’re selling.
Matt DeCoursey 27:43
Yeah, and then and I’m bringing that up, not because I’m not trying to predict the future, necessarily. I’m just saying that there’s a lot of interesting things that well, now we’ve you and I have
Matt Watson 27:55
through this, I’m still trying to replace you with a bot if that’s where you’re going. Right, right. Yeah,
Matt DeCoursey 27:59
I mean, the mouth bot, or Matt chat, or the matt chat bot.
Matt Watson 28:05
And if you can replace me with a ball, that’s fine, too. I will retire?
Matt DeCoursey 28:09
Well, if I build one, I mean, I said it was them out bought it. And so one will just be vastly superior to the other. And we won’t tell anyone which one it will be. So. But the point that I’m making here is, you know, people are always innovating new and interesting things. So the 10 years ago, the sales channels that we’re talking about now as being like one click, they were still pretty new, you look at a lot of like, and to me, things like hosting providers are a really good example. Because it’s like, oh, you know, like you mentioned WordPress earlier. So well, well, let’s talk about flywheel because we had flywheel long before and they there are sales channels. So they’ve got all kinds of plugins and things you can add, expand whatever go to get flywheel.com. But a great example of of, you know, 10 years ago, this stuff wasn’t on the cutting edge. But a lot of people that partnered up with that when it was new, when it was new and booming. They were in the pole position. They were important. That was the win win. For the other other thing, I think a lot of sales channels now are probably are quite honestly overhyped because the marketplaces are crowded. So what I’m trying to encourage here is get innovative and get sophisticated or maybe even simplify it, but look for the things that people are starting to do that are setting trends now. Because there’s probably a lot of people out there that are looking for other people to Hey, come try this new method out. If it’s quick and easy to get into then go with my model of Test test test and see if it works.
Matt Watson 29:49
Well. Another new marketplace that I’m sure you’re aware of, and a lot of people have heard of now is like Product Hunt is a good example, right? Like a lot of people launch new products and And they launch them on there. And, and if you’re kind of a tech enthusiast kind of software nerd, like, like us, you know, product content cool site to, to watch every week and see like what kind of new cool stuff comes out, right? Yeah. And so Product Hunt is kind of its own little, sort of probably more lead generation still. But it’s a cool little channel that is kind of like you’re talking about, it’s a different little marketplace.
Matt DeCoursey 30:22
What’s the one that it’s been out for a while now, but every week, they’d have like a new thing. And for like, 50 bucks, you get like a lifetime license.
Matt Watson 30:31
I was trying to remember the name of this earlier? And I can’t remember what it was,
Matt DeCoursey 30:34
you know what I’m talking about?
Matt Watson 30:37
Is it soon? You know, something is an absolute AppSumo?
Matt DeCoursey 30:39
Absolutely. Yeah. So I’ll give all right. So four years ago, maybe even five, we at Giga book, we wanted to have a customer and client notification system, right. And we’re like, man, that might take a little bit to build or whatever. And I was on the app sumo mailing list and for 50 bucks, maybe 59. I don’t know. We’ll just say 59. I bought a license for something called Beamer. It’s the notification system to go in your software platform. I’m looking at it right now, five years later. And we have a whole thing and Giga book. That’s good. It says User alerts. And what that does is it opens beamers app and it talks it like it’s it hasn’t updated. You can now merge duplicate clients you can order for $59 for 59 bucks. Yeah, for a giga, giga Beamer. Yeah, I bought a giga Beamer. And so in here, it’s like introducing Zoom video meetings for your services. The improved contact widget form and reducing add ons, upcoming scheduled maintenance, resource pairing, like I mean, it goes in, it’s really great. And you know what, I am sure it was great for them at some point, too, because they were probably trying to gain traction. So in some regards, don’t get worried about it be like, Oh, my God, I don’t want to sell this one time. I mean, look, this is validation, you see a lot of people and things like product, or app Sumo. Yeah, I think with apps, I actually quit following that, because I kind of was like, okay, it felt like they were running out of stuff to sell maybe or they were stretching it a little bit. But maybe I need to go back and look at it. Because I mean, what do you have to lose 60 bucks, man, five years later that has been that has cost me $1 a month.
Matt Watson 32:35
Now all the products have added AI to them. And there’s new versions of all of them, I think probably so I
Matt DeCoursey 32:41
see everything kind of like it was kind of like our last trip to TechCrunch and 95% of the people we talked to use the following phrase, my machine learning algorithm. I’m like, There’s no fucking way all these people have machine learning and their stuff. But yeah, you know, alright, so moral of the story, look for what’s look for what’s emerging, see what the trends are that are out there. And those people are looking to create partnerships to I mean, they really are. You know, Matt, as we as we kind of get to the as we are progressing towards the end of our time here. I mean, are you are you a sales channel guy or not?
Matt Watson 33:24
I think sales channels are great, it just depends on the type of product you have. And if they work, and at Netro, for example, they have a lot of partners. That Are they get over half their business from these these sales channels that are big partners, that they’re kind of win win partnerships, you get people that sell consulting, and they need a thing to consult on, right? So like a will install this big, complicated software product. And we’ll sell all of our professional services to install it right. And, you know, if you get the right if you have the right kind of product and service, it makes a lot of sense, right? Bigger enterprise products, that’s really common for selling professional services.
Matt DeCoursey 34:06
So if you want to start if you want to find a sales channel, how do you do it?
Matt Watson 34:12
You got to just try it.
Matt DeCoursey 34:14
Oh, you have a good, good place for you to start. You know what I’m gonna say?
Matt Watson 34:21
No, it starts with
Matt DeCoursey 34:23
a G and it ends with at
Matt Watson 34:25
Google it. Yeah.
Matt DeCoursey 34:28
Hey, wait, hang on. Hang on. We have a new studio. So.
Matt Watson 34:33
Oh, my God.
Matt DeCoursey 34:35
I’ve been waiting two years to do that. One more time.
Matt Watson 34:40
Please tell me there’s more than just that.
Matt DeCoursey 34:45
Yeah, I got one more. Hang on. Hang on. Sorry. For those of you listening just let me get this out of my system.
Matt Watson 34:55
Matt DeCoursey 34:56
There you go. Thank you. That’s all I got. Well, there There’s one that says dramatic piano and I just don’t feel like I need to.
Matt Watson 35:04
Yeah. Well, we’ll end with that. Okay, well, actually, you
Matt DeCoursey 35:07
know what, Matt, when you talk too much at any point, or I do, we can just do this.
Matt Watson 35:15
Like the me send off music?
Matt DeCoursey 35:17
Yeah. Yeah, I actually just removed that from the recording platform. So neither one of us are tempted to do that. Okay, so we are pretty deep into the series. And we’ve talked about so much the things over the last several weeks, we’ve talked about user support and your platform, learning from your user feedback, how to launch a product, making marketing decisions, creating the go to market strategy. And part of why I’m backtracking there is I personally don’t think that immediately jumping into a sales channel or trying to is a good go to market strategy. Most sales channels want to see you have traction, they want to know you’re robust enough resourced enough or have enough longevity, that they’re not going to put you in their sales channel and then get burned. They sell a piece of junk. Right? Right. And and so I went through this a little bit with what because we got pretty aggressive looking for sales channels early with Giga book, and I met a lot of immediate resistance for those reasons. And then some of them too, is, you know, what we talked to someone at Rackspace, and their main concern was, look, we will put we can put you in front of so many people. Can you even handle it? Yeah, yep. I mean, I mean, so chew on that listeners, because these are the things you’re going to have to answer because a lot of those like, I mean, if all of a sudden you’re in XYZ shop or whatever, you know, some of these places to talk about the when when they’re going to support you so well. All right. Here’s a good channel. Matt. I want to thank the people at Zapier, yes, because when gig book launched our Zapier integration, they emailed a bunch of people letting them know that it was there. And then they also wrote a couple articles that ranked really high and drove a hell of a lot of subscribers in there. That wasn’t even intended to be a sales channel. So that’s the whole point is you can run into some really great stuff. So thank you, Zapier. And if you don’t use Zapier, you probably should, because it’s pretty frickin cool. It will help you can your platform connect to a lot of other stuff. Now, next, in the next episode, we’re going to talk about not getting stuck in the middle. And yeah, a little preview for that is a lot of lot of software companies and just companies in general, they get stuck in the middle, meaning they’re not booming, they’re not dying. They’re just kind of surviving and getting by when if that describes you, a sales sales channel marketing might be exactly what you need to break out of that.
Matt Watson 38:13
Yeah, and it’s one thing we’ve talked before a lot about, it’s figuring out product market fit. And there’s a whole book about this called Crossing the Chasm. So I’m excited to talk about this next next week.
Matt DeCoursey 38:23
You’re you’re gonna do, you’re gonna do a live reading of that entire book for that episode, right?
Matt Watson 38:29
Matt DeCoursey 38:32
I can’t wait. I can’t wait. Alright, so in conclusion, Matt, like I mean, what are you like, what do you not like, but I mean, what’s takeaways from from this one,
Matt Watson 38:41
I think sales channels can be a game changer, right? You gave the example earlier of home base, and Walmart. And I think that was a great one. And it’s a win win for both of them. As we talked earlier, these work the best one, it’s a win win. I’m on App sumo here, kind of casually shopping, and I think I might go buy a few things. And whoever’s in this marketplace might have been a win win for them too, because I might buy something here. But on the flip side, one of these tools I’ve seen about sign up for was like $50 a month, and it’s on AppSumo for a one time price of $39 like a lifetime license. So they might shut down a they might be giving away a lot of revenue by having it on the cheap here and AppSumo but thank you AppSumo for that,
Matt DeCoursey 39:30
the likelihood is good, we’ll give you 80% of what you want for that $50 And the one thing you do need might be more
Matt Watson 39:38
and you mentioned earlier about when you’re selling to consumers, it’s hard to get them to pay for things, but since I get to use your corporate card, it’s really easy. So thank you for that.
Matt DeCoursey 39:48
Um, you know the best thing about AppSumo is their rating system is based on tacos right now me. And thank you for that app Sumo. Like, I might buy something just to support that. I’m literally. So my biggest takeaway from today is a better way to give ratings and reviews is a taco system. So I’m looking at, I don’t know what this is. It’s called right cream. It’s clearly for writers that throats for cold emails and marketing tools. It’s got a five taco rating, five out of five, five tacos. The 262 Reviews. I’m gonna give a little spoiler alert here, Matt, do you know so there are an amazing amount of Mexican restaurants near our new office and in the in season 1.2 of Startup Hustle TV work we we do. We also have a taco rating system. Nice. We are literally writing tacos. Now tiny things with tacos, but we will be writing tacos. So you know Johnny gave the taco he ate yesterday, a six. We’re gonna we’re working on a little bit. I think we’re going to also introduce like a chip rating scale because they all make their own chips. Also, I was thinking about one that is literally just how fucking hot is this? Really? Because don’t ever trust the waiter at a Mexican restaurant when you say is this hot? And they’re like, oh, no, no, I mean, not really. And you know, I’ll eat it. And then the next thing you know, I’m sweating bullets.
Matt Watson 41:36
Everything goes pepper is hot. And now you’re about to die.
Matt DeCoursey 41:39
Maybe, maybe. So yeah. My back to business here. My takeaways here is I think sales channels can be great. I think they can first some places offer hopes and dreams that might not ever happen. I don’t think they’re for the earliest stage of companies. In most cases. I think things like app sumo could be for most of these companies that are in places like that are pretty early, like when we bought that beamer license. I mean, they were pretty simplistic. But if you run into something, alright, so this five taco this right cream, whatever it is, I mean, here’s the thing is if you have an MVP kind of thing, or a quick and early launch, and all of a sudden you’re getting now for the $59 i My guess is that app sumo probably keeps half of that. But if they sell 1000 licenses for you. I might be the money you need to keep moving survive
Matt Watson 42:37
market adoption and feedback. I mean, it’s it can be really good.
Matt DeCoursey 42:43
But I do kind of for the deer app Sumo. So this one was $2,999. And now it’s 14 bucks. That’s a deal. Maybe, maybe. I don’t know. I gotta kind of wonder. I mean, part of that. I look at that. And I’m like, why is that? 99.9%
Matt Watson 43:07
Just in case such a good deal.
Matt DeCoursey 43:10
You got it. I get five tacos with it.
Matt Watson 43:14
Ah, there you go.
Matt DeCoursey 43:16
I guess Yeah, five tacos. When it comes. Does anyone just want half a taco? So even the thing so my good. I don’t know. Are you are you going to be writing tacos with us?
Matt Watson 43:29
Yes. Yep, I’m ready for that. Actually.
Matt DeCoursey 43:32
I like it. All right, man. Well, I will see you next time.
Matt Watson 43:36
See you guys.