The problem with “design partners”
Transitioning from friendlies to scalable revenue
Welcome to Issue 15 of Cyber Building Blocks. Each week, I share one newsletter focused on helping you build a Go To Market engine for your cybersecurity startup.
Not what used to work 20 years ago, but what’s working today. Remember, I’m building side by side with you!
I’ve always said design partners are for founders and if you are helping close those early design partners make sure you have co-founder equity at your startup! But then this week I’ve had quite a few conversations with founders or early stage builders who want to start their own cyber startup someday and have been asking about how I would go about the design partner stage of growth and what I would be thinking about so I figured I should elaborate on that here!
During the design partner and broader founder led sales stage there are two primary goals. The first is obvious and that’s to get those first handful of customers and revenue in the door as that revenue traction will make it significantly easier to raise capital to accelerate your growth! But the second (and arguably more important) is to help you build out your sales process, test positioning, build basic collateral, and think through ICP details so you can smooth the transition to bringing in your first two AE’s when the time is right!
You need both from design partners:
Early customers and revenue traction
Early GTM process, messaging, and ICP direction
But many founders don’t get near the benefit because they position it slightly differently. Many founders will reach out to CISOs in their network, or ask for intro’s to CISOs, and use this kind of wording:
“Hey! I’m building a product to help security teams with XYZ. I’d love to show it to you and get your feedback. Do you have some time in the next few weeks?”
This usually leads to my number one pet peeve about the 0-1 building process for security startups and that’s the fact that there are a TON of CISOs that will take that meeting, and then offer to give you feedback for the small price of 20,000 advisory shares…
You can’t get unbiased feedback if everyone is just telling you what you want to hear in order to end up on your cap table!
The other challenge is that the feedback that comes after a demo isn’t detailed enough for you to truly benefit from that feedback! You need to have the security team actually implement, and integrate it into their flow! That’s how they can tell you actual technical feedback that can be helpful to shape your roadmap early on.
When deciding on design partners, be really clear on what you are wanting from them! Early customers can give you transparent feedback as well, so what’s the big difference between design partner and paying early customer?
Many security buyers are trained to hear “design partner” and think free, but when something is free there is a tendency to not use it a ton, not worry if it doesn’t get deployed, and then if it’s not truly deployed or integrated then is that feedback even that helpful anyway??
I much prefer to give sweetheart deals to early customers and word your ask slightly differently. I’ve seen success with something like this:
“We don’t currently have a customer in [Insert Industry] and would love to work with you to better understand the ways our product roadmap needs to evolve to best serve customers like you.”
You can do this for your first customer in an industry, segment, or even a new geography! Then you can get product feedback that actually helps, but not set the expectation for advisor shares or non-applicable tech feature feedback.
Remember those early customers will be who you design your initial ICP off of for your first AEs and SDRs to target. If you aren’t clear on why they are using your product and it’s 100% just a favor to the founder, there is no value for your GTM teams to reference when they go to start your GTM engine.
Remember the founder led sales chapter is to build out the foundation for your GTM engine. If you are able to raise money showing “traction” from founder led sales, your VC’s will think that you have the early signs of repeatability but if it’s purely just favors to the founder, then you really don’t have the traction that the VC’s originally thought and the pressure to grow and scale will crush your startup!
The wrong design partners can give you a false sense of product market fit(PMF). Even having dozens of paying customers, if they are all on your cap table, that doesn’t tell me much about your PMF! (PS-It’s a great question to ask when interviewing for a GTM role at a startup, “How many customers do you have? How many of those have equity in the company?” Trust me, it will tell you a lot!)
Leverage design partners and founder led sales to win early customers to test the value delivery of your product AND help you systemize the early GTM motion so you can bring in additional people to help you build it out! Don’t forget why you are doing it!
Here’s what I’m trying this week: Remember I’m in the trenches building just like you
I’ve had so many smaller roundtables this last week with peers focused on building in various partners of the cybersecurity ecosystem!
On Tuesday I was a part of a roundtable with 15 other CROs building cybersecurity startups and talking through what’s working and what’s not working and the trends we are each seeing in various GTM teams and segments.
Last Friday I met with a bunch of cyber sales and channel folks up in San Francisco recapping RSA and the state of the channel in the bay area! All selling for “competitors” but being super friendly and really helping each other out!
That’s what makes the cyber ecosystem so special! Everything is built on trust and relationships. Anything you can do to build more relationships and grow your network, I’d really push you to do it! The impact it can have on your career and your startup is incredible!
My takeaway for the week is to try to get to more in person events with security practitioners, channel teams, and others building in cyber! If you ever come to the Bay Area, CA, please hit me up, i’d love to meet in person!
That’s all for this week’s newsletter,
Keep fighting the good fight!
Konnor
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