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An Interview with Sean Grundy, Co-Founder, and CEO of
Boston-based Start-up Bevi.
1. Let’s start from the beginning. As the co-founder and CEO of Bevi, when did you first know you were going to sell through the channel? Once you decided the partner route was right for your business, where did you begin?
Bevi went to market in 2015 with smart sparkling and flavored machines for offices. In those days we did truly everything ourselves, from cold calling prospects to get a foot in the door, to renting vans to deliver and install machines. We weren’t very familiar with the distribution channels available; we just wanted to get our machines in the market as fast as possible.
Soon after launching, distributors started approaching us to discuss working together. We didn’t know where to begin. The distributors that dominated our landscape were office coffee service (OCS) and national foodservice companies like Aramark, Compass Group, and Sodexo. There were also hundreds of smaller players that had significant traction on a local or regional level.
“We prioritized channel partnerships with distributors who were known for excellent customer service.”
With no industry background, extremely limited brand awareness, and a product that was barely past the prototype stage, choosing who to work with and how to structure deals was a challenge. However, we realized that most food and beverage products, including beverage machines like Keurig, needed OCS or foodservice channels to scale since these companies have built out the relationships and infrastructure to provide service to clients across the country and world.
We prioritized channel partnerships with distributors who were known for excellent customer service. This was more important to us than working with distributors who had the greatest reach, or those who offered us the best pricing. We were still just starting to get the word out about Bevi, and we sought distributors who would be aligned with us on putting service quality first.
2. Bevi has built a robust channel in just a few short years. If you could go all the way back in time, right to when you signed your first partner, what, if anything, would you do differently?
I would have put more thought into designing our product for our channel partners. At the time, our small engineering team was exclusively focused on designing a great product for end-users. That meant we were thinking about how to purify and flavor water effectively, how to get the right level of carbonation for users who selected sparkling water, how to achieve our target flow rate, etc. We also designed software to remotely track when consumables were running out and plan refills.
“I would have put more thought into designing our product FOR our channel partners.”
What we didn’t incorporate into our early designs of either the machines or the software was how our channel partners organized their work. So the biggest thing I’d do differently – and which we are in fact doing now – is learning how our channel partners manage other products in the field, how they create work orders and manage routes, what their technical service capability is, etc., and designing our products to match their needs.
3. Based on your experience with Bevi’s partner program, what do you think the 3 major keys to successful partnerships are?
For a channel partnership to take off, both sides have to continually invest in making it work. It’s the opposite of “set it and forget it.” I’ll cite three keys with that in mind:
- First and foremost, the economics of the partnership has to work on both sides. If either side gets greedy, then the partnership won’t work economically for one of the parties, and that party will stop investing in growing the partnership.
- Communication. Both sides need to communicate when they’re making changes to the partnership, whether those are changes to the product, changes to pricing, or changes to the go-to-market strategy.
- Benefit of the doubt. When things go wrong, which they inevitably will at some point, you need to trust your channel partner enough to know that they’re trying their best and hope they trust you enough to know you’re trying your best. As long as both sides keep trying to make it work, you’ll get through rough patches. Like a marriage!
4. If you were speaking to a company that was on the fence about selling through channel partners, what would you tell them?
I’d tell them to really do their research on how their potential channel partners operate and make sure their product and business model is fully ready for distribution partnerships. Is your sales playbook straightforward enough that a distributor who carries dozens or hundreds of other products can easily learn how to sell your product? Do you have the proper training and support functions in place that distributors in your industry will expect?
“Is your sales playbook straightforward enough that a distributor who carries dozens or hundreds of other products can easily learn how to sell your product?”
When choosing partners, I’d also recommend being intellectually honest about why various partners want to work with you, and make sure you’re comfortable with those reasons. Are they in rapid growth mode and want to heavily push your product? That can be great if your priority is maximizing growth, but will they also have enough time to service your product and adequately represent your brand? Are they genuinely eager to sell your product to their client base and hit growth numbers, or do they just want the right to sell your product if a customer happens to ask for it, so they don’t lose the particular customer’s business? (Companies can want the right to distribute a project for offensive or defensive purposes.)
I’d also recommend starting with a pilot. This could mean choosing a channel partner in one region only, or for a certain brief period of time, before expanding. If either you or the partner isn’t 100% sure it’s the right strategy for you, make sure the pilot is easy to unwind.
5. Have you ever had to end a partner relationship? In your opinion, what are “deal breakers” that other tech companies can look out for when dealing with underperforming partners or relationships that simply aren’t working?
We have wound down channel partnerships before. The decision for us has generally been more strategic than economic. If high-level company priorities aren’t aligned, or if culturally there’s a lot of friction in working together, then it can be the right decision for both parties to move on.
6. Bevi partners with companies in a very competitive market. Can you give us an example of a channel partner conflict you settled and how you did it? What are some tips you’d give to channel leaders who find themselves stuck in the middle of difficult partner conflict?
In our early days, we ran into frequent channel conflict because we sold machines directly in many of the same markets in which our channel partners operated. Then we instituted a policy where we asked all our leads which vendors they worked with for office coffee and water. If they mentioned one of our channel partners, then we gave those partners the right of first refusal of the deal. The system isn’t perfect since not every lead wants to share their existing set of vendors, or because a lead may already be a customer of more than one of our channel partners, but overall it’s eliminated probably 90% of our channel conflict scenarios.
“One key to reducing channel conflict is that we pay our sales reps exactly the same commission no matter who closes a deal in their territory.”
One key to reducing channel conflict is that we pay our sales reps exactly the same commission no matter who closes a deal in their territory. Whether the rep does all the legwork for a deal personally, or whether a channel partner puts in the work, the payment is the same. In this system, a rep’s best bet for maximizing commission is to focus on enabling and supporting channel partners.
7. What are the main ways you keep partners engaged?
It sounds almost too simple, and I’m not sure why it took me so long to realize this, but personal relationships and trust matter enormously. More so than any particular program (and we’ve tried spiffs, training programs, price incentives, etc.), what’s led to the biggest increase in partner sales is just spending more time with our distributors and regularly asking what we can do better to support them.
Sean Grundy, Co-Founder and CEO of Bevi https://www.linkedin.com/in/seangrundy/
Bevi is redesigning the beverage supply chain with machines that purify water and make customized drinks in seconds. Our system vastly cuts the cost and carbon footprint of beverages.