Most startups are born, because the founders identified a problem that lacked a solution.
Read on to hear from two friends, Shruti and Rahil, as they share their startup story, and how they went on to build Zomentum for the Managed Service Provider (MSP) community.
Shruti was part of the Venture Capital industry helping her team with cross-border SaaS investments in india-based companies that sold to the global market.
During the years where, shruti and her team helped companies with funding, she noticed that all these companies were building great products, but struggled to market or sell their products. These companies struggled to reach out to customers—sales and marketing was a huge challenge. This piqued her interest, and she wanted to get to the bottom of this.
This was when Shruti came across Microsoft's commercial cloud division. She was amazed at the fact that the division made a revenue of 8 billion, although built only with the help of their partners. Microsoft invested in partners, scaling and up selling/skilling, and structured their entire company around how they should sell via partners.
Rahil was working with Twitter where he was helping drive revenue through ads. He then quit Twitter to join Rubrik, where he worked closely with channel partners.
He saw Rubrik go from zero to 400 million in revenue in just three years by selling completely only through their channel partners. In fact, as a company policy they sold through partners alone; even if leads came to them, they never sold directly. Rahil had a grandstand view of the power of the channel community and how they can change the fate of the company.
Shruti and Rahil were discussing work one day, and that’s when Shruti asked Rahil a question that would be the problem that Zomentum would solve.
“Inter-company communications happen most in the Channel industry. In fact, there are easily four different businesses interacting with each other at the same time—be it a vendor, the distributor, the channel partner themselves, or the end customer. There are plenty of tools, like Slack, for inter-company communication. Have you noticed that none of these tools were built keeping the Channel Partner in mind?”
Shruti and Rahil didn’t just see the potential of the partner ecosystem; they also saw the need to empower channel partners with the right tools to build their business. They met hundreds of channel partners, industry experts, influencers, and attended channel community events. They understood that though managed service providers were selling the best technology, the tech needed to run and grow their own business was something they lacked.
They also learned that Small and Medium Business (SMB) technology exists because of partners. SMBs are able to grow without worrying about technology because managed service providers exist.
“For SMBs to accomplish selling completely through partners, they needed the might of a Microsoft.”
For example, SMB technology company, Datto builds complex technology products for the SMB community. Managed service providers worked with Datto to deliver the technology to the end users. Datto thrived because of the managed service providers who are trusted by the end clients.
While there are tools that help MSPs get the job done, they seemed archaic because they had not been improved upon, in a very long time. Some of them are desktop-based with several maintenance issues. The UX or the platform itself wasn’t built for the cloud.
Moreover, these tools were built as standalone products that solved a single problem. If you needed proposals, you had to use proposal making software, if you wanted to manage customer contacts, you had to go for a CRM. If you needed assessments, you have to choose another tool for it. Most importantly, there was a lot of information lost when data was transferred between these tools or modules.
“We just realized that no one’s ever built tools for the channel itself. We flipped this whole thought process around. We thought, instead of building tools for the SaaS company, what if we just build tools for the channel partner industry itself?”
The idea of selling through channel partners is often considered old-school. It is considered as an approach meant only for well-established companies. But this wasn’t necessarily the case. The numbers that Shruti and Rahil uncovered were quite alarming. For example, Freshworks makes 15% of its revenue through its channel partners, ServiceDesk is at 80%. In fact, Hubspot, DocSign, Slack, etc. sell predominantly via channel partners. If the MSP industry goes down, it will most likely drag the SMB industry in the US market along with it.
“The growth of one industry impacted the revenue of another.”
On the other hand, the MSP industry is growing at 12% globally; in the US it is 7.7%. Not a lot of markets grow at that pace. Technology solutions that were earlier available only to large enterprises are now available to SMBs. A huge number of small and medium-size businesses(SMBs) are in the midst of a digital transformation. Businesses now witness natural progression while catering to the SMB market. Over 58 million people in the US working in 5 million businesses are catered to by the MSP industry.
The founders had never been part of the MSP community.
“We spent so much time learning about the community that it seems like we are a part of it now.”
An MSP, according to Rahil, is like the heart of the SMB. Most of these SMBs do not have sufficient IT knowledge or cannot afford to set up the entire IT infrastructure all by themselves. However, with MSPs around, SMBs can now outsource all or part of their IT requirement to the experts. Be it monitoring security, networks, deciding to buy hardware, software, ensuring hardware compliance, or anything IT, MSPs are helping the world’s SMBs manage their IT effectively.
In fact, the MSP community is a very healthy industry. It’s growing. When an industry grows, it means everyone is growing their revenue. In such an ecosystem, growth doesn’t come at the cost of killing someone else’s dream.
A lot of MSPs have clients whose offices are spread across different states and cities. Since, it’s a hands on job where client network or hardware needs to be fixed, an MSP might need support. Hence it becomes important that they develop alliances and naturally evolve to become allies. In fact, they open up their account books to each other, fostering mutual growth.
“The MSP community has been truly amazing. When you get to know them, you begin to notice that there is a kind of friendship among them. That resonated well with us and what we wanted to build.”
Giving up well-paying jobs to chase dreams can be scary. However, Shruti and Rahil had no qualms about it. Shruti was well-versed with the startup space. She saw first-hand what worked, what didn’t, and how to swim among the sharks. Rahil on the other hand, hailed from a family of entrepreneurs; he has seen businesses rise and fall. They were more prepared to take up the challenges from the word go.
Zomentum is a sales enablement platform for MSPs. The only tool they will need.
To understand how Zomentum fits in, let’s take a step back and look at it. If you consider the life cycle of how a product (software) gets delivered to the buyer, the channel partner is the one who owns the relationship and trust of the buyer. They are able to influence the technology buying decision of the buyer. They are SMB’s best source of leads and revenue. Yet, they haven’t been given their due credit.
“Channel Partners are that important piece holding the entire value chain together.”
But the tools at their disposal are single-point tools that do not efficiently help them build their own business. There are CRM tools available and although these tools cater to the MSP's requirements, they were not built with the MSP in mind. This means that the MSP has to integrate the CRM with various other tools.
“They should have the right tool to run their show! That tool is Zomentum.”
The MSP community has been extremely supportive. They’re always willing to sign up for beta programs, test a product and provide feedback explicitly telling us what they want. They are always encouraging and advising us on what they’d like to see in the product. We also have an advisory group of 10 MSPs who actively give us incremental feedback on the roadmap.
Zomentum consists of four distinct modules a MSP CRM to manage and close deals, a Proposal builder to create and manage proposal which also comes with in built sales assessment features, quotes and documents, a Sales automation tool to automate redundant processes and a reporting module that can be used to derive actionable insights that can be used to optimise the entire process.
Each of these modules, though can be used individually but give the best results when used together to drive end-to-end sales process for MSPs.
We did a grand launch among 2500 MSPs, at DattoCon '19 in San Diego and now that we have showcased Zomentum, even if it is a small pool, we want to make sure that our customers are extremely happy with the product.
We are just starting to build this community. We are looking to onboard more by the end of this year.
Started eleven months ago, Zomentum is a 16-member team today. We are looking to grow to 20 next month and by the mid of next year, we hope to double the number.
Most of the team is engineering, but we are looking to hire for non-engineering and business roles as well. If you would like to refer someone to join us, send us an email to firstname.lastname@example.org.
Every startup has a story, a moment that marks the beginning of their journey. This is ours!
If you’re an MSP looking to accelerate your sales process, drop us a line at email@example.com.