How Rapid7 Saw Their Deal Sizes Grow by 3X, Win Rates Increase to 40%, and Sales Cycles Shorten by 21 Days
“Many companies measure success by how they compete with others, but with AWS programs, it's more about competing with yourself. If you're bringing in cash, using it wisely, and fully leveraging AWS, it drives your own business growth.” - TJ Schmidt, Director of Cloud Partnerships for Rapid7 In today's episode, of Unlock Cloud Go-To-Market, hosts Erin Figer and Patrick Riley are joined by TJ Schmidt, the Director of Cloud Partnerships at Rapid7, to discuss the world of cloud partnerships, marketplace strategies, and operational excellence. TJ shares his journey from AWS to Rapid7, explaining the transformative impact of Co-selling and the crucial role of consistent Marketplace presence. Learn how Rapid7 has aligned with AWS priorities, seeing tremendous growth in deal sizes, win rates, and sales cycles, thanks to their strategic partnership with Tackle. TJ outlines the importance of setting realistic goals, managing global opportunities, and leveraging resources effectively. In this episode, you’ll learn: 1. The importance of operational efficiency, particularly in handling the increasing number of Co-sell opportunities with AWS 2. How Rapid7 experienced significant growth in their Marketplace transactions, seeing deal sizes grow by 3x, win rates increase to 40%, and sales cycles shorten by 21 days 3. The importance of aligning Rapid7's goals with AWS's priorities Resources: Connect with TJ on LinkedIn: https://www.linkedin.com/in/timothyschmidtjr Connect with Patrick on LinkedIn: https://www.linkedin.com/in/patrickmriley/ Connect with Erin on LinkedIn: https://www.linkedin.com/in/erinfiger/ Learn more about Tackle: https://tackle.io Timestamps: 05:46 How setting expectations and long-term strategy leads to success 13:09 AWS an investment partner 19:35 Embracing Marketplace growth to align with AWS 24:10 Simplified process, global expansion, Go-to-Market support 34:09 Navigating new directions and seeking meaningful partnership growth 41:30 Focusing on Marketplace and bringing partners on journey 51:04 How coaches help track metrics and boost sales success
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If I look back on it, maybe I did it too fast
because we just got so many new opportunities
that we couldn't take advantage of
because there wasn't enough time in the day.
Managing that many coastal opportunities
was very, very difficult.
One of the big reasons that we're talking right now
with tackle and the folks there is
we shared so many opportunities
that not only could we not keep up
with the activities we were being asked to participate in,
but we also can keep up with launching deals
and managing all the day to day
that came from ACE without, you know,
to like tackle in the middle.
Welcome to Unlock Cloud Go-to-Market.
The series where hosts Aaron Feiger
and Patrick Riley share the essential stages
of the Cloud GTM maturity model to start, optimize,
and grow your company's revenue through the cloud.
They've helped countless ISVs tackle the ins
and outs of their Cloud GTM motion
and in each episode,
they're sharing those success stories
from the people who have put them into place.
Because ultimately, this way of thinking is the future
and the future is now.
- Everybody and welcome to another episode
of Unlock Cloud Go-to-Market.
Today, Aaron and I are joined by TJ Schmidt,
the director of Cloud Partnerships at Rapid7
and you are not gonna wanna miss this episode.
He talks about how Rapid7 has truly
unlocked and built their brand such that they're realizing
the top line revenue metrics from the Cloud providers
like in increase in deal size,
the increase win rates and the shorter deal cycles.
Do not miss out.
Coastal is behind all of it brand building,
actually realizing the true value of this
and Aaron and I are gonna unpack all of that.
So stay tuned and hear from our new list,
tackle customer advisory board member, TJ Schmidt.
- Everybody, welcome to another episode
of Unlock Cloud Go-to-Market.
I'm co-host Patrick Riley.
- I'm co-host Aaron Feiger.
- And today we are very excited to be joined by TJ Schmidt,
director of Cloud Partnerships at Rapid7.
TJ, thank you for joining us today.
- Thank you very much for having me on here.
- We're really excited to hear your story
and before we get into kind of your journey at Rapid7,
we would love for you to just start by sharing
a little bit of your background
and how you came to be the director of Cloud Partnerships
at Rapid7.
- Good thing, thank you again for having me.
I came over to Rapid7 from AWS.
I was a partner development manager
and the public sector team for almost two years.
And then actually prior to that,
I was part of a team at Igor Micro
that was responsible for AWS
that was from about 2014.
So I've been in the AWS world for almost 10 years now,
having some capacity with it, typically partner focused,
never really sitting on this side of the table
on the ISB Alliance leader side of things.
But I had taught enough partners how to use AWS,
how to be proficient in all the ins and outs
to be successful and what I think is successful
in the role right now.
- Okay, TJ, let's start at the very beginning.
So you come over from AWS
and you're now at Rapid7.
How did you initiate your journey
with your cloud go to market?
- Yeah, so coming over from AWS into Rapid7,
there was kind of already a path that had been outlined
that I was really kind of given to work with.
And what I wanted to do was take full advantage of that
and use it to our success.
And what Rapid7 had aligned with is he's trying to get
opportunities out of AWS.
There's tons of materials you can read
where we wanted AWS to be this opt-generating machine.
And coming over, I knew that this was gonna be a very hard task
and it was gonna be a longer term task
than what we believed it was should have been.
And what I did was looked at, okay, Koso,
and in my head, if we're gonna try to get opportunities
out of AWS, the best way to do that is to grow our mind share.
And the best way to grow mind share
is not to just run into AWS offices
and tell them how great your company is,
but actually show them how great your company is
by bringing new customers, having these conversations,
using each one of those opportunities
as a way to describe what it is your company does,
how you help customers, AWS's customer obsession
is number one leadership principle.
So now we get to show how we are customer obsessed
and how we're solving customer challenges.
And so I went on a journey just co-selling
and sharing as many opportunities as I possibly could.
I think we went from 450 before I started to 900 plus
and we're actually on track now to see a thousand percent growth
as we finish out the remainder of this year
from the start of my tenure at Rapid 7 2 now.
And so we kind of forced that mind share down AWS
and started, they had no choice,
but to know who Rapid 7 was
'cause we were co-selling self-requally with them.
So you used co-sale as your brand strategy
to boost your brand inside of AWS
and to give your organization an opportunity
to not only tell them who your customers were
and where you were trying to go to market,
but your story, like who you are and what you do.
And what was the expectation of Rapid 7 leadership on,
well how soon are we gonna see AOs coming in from AWS?
And was there some expectation setting you needed to do?
- Yeah, there was definitely some expectation setting
that I needed to do.
You know, it was still something that they were trying to toy
with making goals and responsibilities be specifically AO.
But what I was able to do is kind of show
that this is a longer term play.
And what we needed to do was gain that notoriety
that mind share from the beginning.
And then we could start measuring at, okay,
if we share X amount of opportunities,
we get Y back from AWS.
And if we could develop over the course of a period of time,
some consistency, then it makes us understand, okay,
here's typically the percentage,
if we share this many, we're gonna get back this percent.
And so I was lucky enough to have a company
that is understanding and trusted my opinion
and that we have to start at stage one.
We can't just jump into this and expect the world
from all different angles.
Stage one is let's build our brand,
let's build our mind share,
and that is just sharing opportunities.
And then as we see AOs coming back, that's great.
But the other thing that I'm trying to show them
over this journey, this two and a half year journey too,
so my company is that AOs are not the end all be all.
There's so many other things that we can do
through our Coastal strategy.
And what we need to really pay attention to
is all of these additional benefits and features and programs
that we can take advantage of, not necessarily AOs.
Those are kind of a icing on the cake
when you're going into market.
- Yeah, Coastal leads to your ability to open up doors
to have access to other programs and initiatives
inside of the partnership.
Not just I give you a deal, you give me a deal.
- You give me one.
- Right, so can you share someone,
you're like early successes at Rapid7
that you experienced around your Coastal strategy?
Like what happened?
Started to share these opportunities,
and it takes a while for AOs to come in.
So what did you see as early success indicators?
- Yeah, so Coastal and just sharing opportunities
with AWS took off, we were sharing so many,
we started getting actually too many invites
to participate in different activities at AWS.
Lightning rounds with different groups,
different programs, different marketing initiatives,
we just were getting inundated, left and right.
And if I look back on it, maybe I did it too fast
because we just got so many new opportunities
that we couldn't take advantage of
because there wasn't enough time in the day.
Managing that many Coastal opportunities
was very, very difficult.
One of the big reasons that we're talking right now
with Tackle and the folks there is,
we shared so many opportunities
that not only could we not keep up
with the activities we were being asked to participate in,
but we also keep up with launching deals
and managing all the day to day that came from AOs
without, you know, Tool Like Tackle in the middle.
- Yeah, that's awesome.
I love how like more opportunities came to you.
And when we say opportunities, we mean like,
not just deal opportunities,
but opportunities to connect and lightning rounds
with sales teams in programs
being more programmatic and strategic
inside your partnership.
- Correct, yeah.
It was being asked to be in different cities
very frequently and a solo person running
all aspects of this overall partnership
from marketplace transactions to Coastal,
all the in-betweens, it was impossible to do all of this
because we realized quickly or I realized quickly
that the more of this I do,
the more activity comes from it,
the more I can't participate in this activity
to participate in managing the Coastal opportunities.
So it just became, when we talked about a flywheel,
this one became a bat flywheel.
So we started looking at how we could update that
and take advantage of it to correctly.
- Having sat in a similar shoe
without the partnership piece added to it,
managing all of this part of the business is a lot,
especially even you've got other full-time things
you need to start doing.
When you got to this phase,
it sounds like you were seeing success,
but your time was severely constrained,
operationally it was becoming difficult.
What was it like internally?
What were those conversations like to help get leadership
on board with, hey, we are seeing some value,
these are the metrics.
What do those conversations look like
to help get you some support where you needed it?
- Yeah, so I'd have a great leader who was open to listening
and wants to do all of it.
I told him, I'm a very, very competitive person.
And so when we hear that we're doing so great,
but we're still second best, third best for whatever it is,
AWS doesn't give you exacts or anything,
but you can hear some rumors here in the air
of how well you're doing.
And so I was able to go to him and say,
"Look, I don't want to be wherever we are.
"We're not number one, I don't want to be there."
And there's so many things that we could be doing
more of that we're not.
So success is cool, but what I tried to show is the,
I don't want to call it failures, but the misses, right?
The opportunity misses on our end,
hey, we could have done this if we had more people,
more technology, better tools, things like that.
We could have participated in this marketing activity
had we had the time to invest in that
due to the technology constraints
in managing ACE and things like that.
So I was able to really kind of show,
here's all of the things we're missing out on
because getting us to this point
where we're being invited to this
has caused so much administrative tasks
that without tools, technology, and people,
it was very hard to manage.
- I love that.
So sometimes people focus on like,
hey, these are the benefits we're gonna get
if we go do these things, right?
And they try to paint this picture of like,
what's the art of the possible?
And you were like, I'm gonna go create FOMO.
The fear of missing out.
To get to part, that's awesome.
- Yeah, I mean, I think there was a strong understanding
of what comes out of those things
and what would be present
if we were able to participate in these things.
But yeah, the FOMO was real.
Like we knew that we don't want our competitors
to hog all the attention.
If we're doing all this great work in co-selling
and sharing opportunities and sharing our message,
but are one of our competitors comes in
and then steals AWS's year runs a campaign
or does one of these activities
or is leveraging a program that we are not doing,
everything that we just did from a coastal perspective
kind of gets diminished a little bit.
And so we wanted to be able to do all of it essentially.
And so that was one of the ideas that I had.
It seems to have worked for now.
- So you kind of make this shift, right?
You start out in that phase of early adoption
or establishing our foundation.
You've built a little bit of that.
Now you get some additional lift internally
and you can apply the company to more programs and incentives.
And you mentioned this a little bit.
But can you elaborate on how Rapid7 used
some of the cloud programs
and some of the incentives available to you?
Now that you have some more time
to help grow that partnership.
- Yeah, so one of the things that I spent some time doing
is trying to show internally at the company
that again, AOs are icing on the cake,
but really what we should be looking at, AWS as is almost
like an investment partner.
AWS is a big thing.
And I wasn't on a program team at AWS.
I don't know this was certainty,
but it seems like the way they've developed their partner
programs is to allow everyone to compete on an even playing field.
There's other companies that are bigger than Rapid7s.
Companies that are smaller than Rapid7,
but to allow everybody to kind of gain the attention at AWS
and still develop their own business, AWS,
invests back to partners like Rapid7.
And what I wanted to do was show them how we could use that
to better our business.
And so a couple of years ago, last year,
I think it was, there was a program called GPA
that we were able to make some pretty significant money on.
And one of the things I said to myself,
still in a solo spot was, this is gonna be hard,
but the benefit is gonna pay off in the end.
And I actively pursued taking full advantage of the program
that was built to be able to show my company
what types of investments we could get.
But then also the same FOMO,
hey, by the way, this is with one person focusing
on one particular area.
This was a global program with the appropriate tools,
technology and people.
We can leverage this even more. And so now we've been leveraging
the CEI program this year with AWS to continue pulling
and funds. And the both of these programs,
whatever you call it, GPA or CEI,
they're both the same program, just different titles.
It allowed me to showcase why we should invest
in a company like Tackle to help us not only increase our
COSEL to use these programs, but to increase all the other
benefits that we're getting from COSEL with AWS,
with a reduced administrative task on the team
that's providing these things.
And also take full advantage of other things like the AWS
marketplace from Tackle's perspective.
But then we also use some of that investment to hire people
so that we could continue driving these programs
and driving our mind share with AWS.
- Love it. - Yeah, I mean, sometimes you get
revenue from the partnership and sometimes you get
investment funds that help you bring down your cost of
business or increase your margin so that you can invest in
these areas of the organization with this additional funds.
So revenue comes in a different form, right?
Not revenue from a customer, but revenue from AWS
that gives you the ability to make these investments,
whether it's like continuing to build out and co-build,
continuing to invest in the team and marketing
and to grow the program.
- Yeah, we, I had a conversation yesterday with one of our
director of global marketing and as we've talked about it,
it hit me.
You know, a lot of companies will measure their successes
on how they're competing with their competitors.
But within the AWS, the way the AWS has developed these
programs, the way I look at it is what you really should be
doing is seeing how you compete with yourself.
If you're bringing in cash and you're using it the
correct way in leveraging all of the aspects of AWS,
it allows you to grow your own business.
What did we do with the investment?
What did we do with these things from AWS?
And how do we turn it into more business for ourselves?
So really to me, we should be looking at year over year growth.
What are we doing with AWS to continue to grow our own business?
Not worrying about what everybody else is doing and getting through.
- Yeah, your success reminds me of a similar success of like
using the COSEL program as a way to boost your brand and get
access into programs, but also like investment funds from the
cloud partner.
And then they turned around and used those cloud investment
funds to really seed foundational marketing tools and like
marketing things that they wanted to use in order to help build
co-marketing campaigns and drive more business and awareness around
their joint solution.
And it was a game changer for that startup at the time.
It really seeded those foundational pieces in their business.
- I could imagine.
- Yeah.
- And you said something that made me think of my kids are always
saying this, but you said something smart in there, which is we
shouldn't compare ourselves in the outputs that other companies are
achieving to what our goals are and where we should be going.
And that my kids always say comparison is the thing of joy.
And now I've heard it like three times this week.
But that's like you made me think of that.
And I think that's often overlooked.
We're always going into this with, well, this company is top
to your partnership here.
And this is what they're doing.
And this is what they're getting.
And we want to be like that.
But we shouldn't always compare ourselves because we aren't doing
the same things.
- Right.
Yeah, exactly.
- Yeah, you got to compete against yourself.
- Yeah.
- I love it.
- That's awesome.
Let's move on to like talking more about the cloud programs.
You've talked about some of these cloud programs that have really
helped you get your cloud go to market, like up and running
and picking up that pace and acceleration
and like your investment in tackle.
What other ways has the cloud programs really helped
rapid-suppens overall goals and objectives?
- Program perspective, it has fully allowed us to invest
in different areas that we might not have had budget for.
We identified quickly that marketplace was just an organic
growth engine.
Marketplace lends itself to many significant wins at Rapid7.
We've seen deal sizes grow up to three x the size of traditional size
deals.
Our win rate increased to 40%.
Our sales cycle shortened by 21 days.
So we've seen some significant benefits in marketplace.
And what we identified is that marketplace was just growing
on its own.
Or we've actually, we've grown our marketplace utilization
by 750% since implementation on day one.
And we really have not enabled our teams until 2024
on how to use marketplace.
So this growth was completely driven by customer demand.
And what we identified is that if our customers are asking
for this, we need to be able to support it correctly.
And that's really where the second super-eyed benefit that we
were looking for in tackle is coming from allowing us to more
strategically deliver marketplace transactions,
build our presence.
That helps us align to things that are important to AWS as well.
Again, competing with yourself, but really what we're trying to do
is align our goals as an organization with the goals
of AWS so that we can just continue to take full advantage
of all of the programs and all of the initiatives
that AWS is offering.
If we try to fight that or go against it or not even that,
but just not embrace it, it makes things difficult for everyone.
And really, it's one of those things where the train's gone.
You might as well jump on board and use it to help your business
and take full advantage of it.
Yeah.
And you know at Taco, we have this cloud go to Marketfly Will.
And listening to your story,
you enter the flywheel via CoSAL.
You started it on your own.
And as you created operational pain, you called tackle
and said, Hey, tackle, can you help me?
I can't scale this as a one-man show.
And as I bring on people like I'm going to need help
in general around operational excellence in CoSAL,
then comes investment funds from the cloud provider
from AWS that enables you to now invest in doing more with tackle.
Also, Marketplace becomes increasingly more important.
So now you start to add Marketplace
and you're starting to create this momentum inside the flywheel.
When you saw that pain around Marketplace
and you came to tackle, like, what are all of the pieces
that you're using around our people and our technology
and our processes to really help you continue
to not slow down that momentum, keep that momentum going.
Well, we identified, because we were, like you said,
the flywheel inter-inch was CoSAL transactions,
we identified quickly that Marketplace transactions
followed the same linear line as CoSAL.
So the more we co-sold, the more we had Marketplace.
And you know, that's AWS bringing up Marketplace.
We're finding AWS customers that use Marketplace.
So we identified quickly that they're going right along
with each other.
So what I explained to the organization is,
if we're sharing more opportunities,
which is what we want to do to gain our mind share,
our Marketplace presence has got to be better.
And we're going to see organically
more Marketplace transactions.
So if we want to continue CoSALing at the level that we are,
we need to develop out better tools, people,
and processes around the Marketplace.
And so to help with CoSAL, we started talking with Tackle.
We wanted to help with Marketplace at the exact same time.
So it was a perfect, you know, marriage there
of what we were looking for for a tool perspective.
And now that we come in at CoSAL,
now we're doing more Marketplace,
this creates another operational efficiency
that we need to work on.
And at one point, we had a singular person, myself,
doing all Marketplace transactions all over the world.
And we have a very hockey stick like a month and quarter.
And so it was literally the last two weeks
just being slammed with creating Marketplace Private offers.
And it was starting to become apparent to me
that this was going to cause some customer concerns
or some bad customer experience.
And as we looked at that,
started partnering with Tackle,
it allowed us to simplify that process through the technology.
But it also allowed us to hire a deal up or not higher,
but leverage our deal operations team
that rapid seven to help create Marketplace.
Our original process was for 23 pages long
of how to create a Marketplace Private offer.
And once we had Tackle implemented,
it simplified that process significantly.
I didn't write the new process stock.
I actually didn't write the old one either.
I don't want to take credit for that
'cause if Aaron's watching, he did all that.
But we were able to simplify that drastically.
But the other thing that Tackle did
that significantly helped us is Tackle now could come in
and teach our team how to create these private offers.
And no longer was me trying to teach someone else
a 23 page document of how to do this.
We now had a simplified process that also came
with a great go-to-market coach
who was able to help us communicate
and train these new teams as they come in.
And this ultimately comes all the way back around
the flywheel back to our Coastal strategy.
And all of these pieces, the programs that we leverage,
the technology allowed me to actually go out
and hire a team of people to help with our AWS Alliance.
So we went from a team of one to a team of six now, globally.
And with the simplified Coastal process,
it makes it very easy to teach the team
and make them more efficient in a shorter period of time
to leverage the Coastal.
And we also have the support of a great go-to-market coach
to come in and help not only enable that team
help onboard them, teach them what they need to do
using the tools but the strategy behind the go-to-market
was very important to help get the folks on my team
up to speed very quickly.
- Yeah, I'm your journey, I'm sure,
is gonna resonate with some of our listeners.
It starts off as like a one-man band
and you have to do all the things
and you invest and partner up with Tackle using our software
instead of having to go hire a team of operational folks.
You're able to actually leverage your internal team
that already exists by giving them a very simple process
and a simple experience to do that.
They're willing to say, yeah, we can support this area
of the business so that you can go and best
in other resources that the organization doesn't have
and you really need in order to continue to scale
and grow your cloud, go to market efforts globally.
- And unlocks the little swim lanes.
I know when you talk to us the other day,
you mentioned how it got to the point
where you had to kind of put some guard rails
on what opportunities you could take your marketplace
because TJ's got my release.
- The great and market all of them.
- Look at all these opportunities where I'm missing,
I'm not because I can't.
- Yeah, we didn't pass any opportunities.
I will say that no matter what we were putting them
through the marketplace,
but I tried to create a false level, I guess,
of prioritization and we set up some guard rails
to 24 hour turnaround times.
Deal sizes had to be certain size with,
we again would make an exception,
but you'd have to come to me and talk to me
so that we could figure it out.
But all of that was really done because again,
we would get so many opportunities
at the end of a month or a quarter
that almost every other aspect of the business
would have to shut down for me other than
creating marketplace private offers.
And because it was a global reach,
I was creating private offers at seven in the morning,
6.30 in the morning for Australia
and then working till midnight for the West Coast.
So it created a ton of disdain on my part,
but I saw the value and I knew what we needed to do
because our customers are asking for it
and the benefits were apparent.
And I knew that it was important to a partner
that we were growing with.
And so we needed to figure out how to solve that challenge
and tackle has been extremely supportive
in helping us get to where we are this year
with a very strong marketplace strategy.
And all the other pieces that we get from AWS
lend itself to marketplace.
So my team is really heavily focused on marketplace,
but with that comes all the other things
that we need to do, right?
So we're not gonna go to marketplace without CoastLE.
So we're CoastLE and that leads to marketplace.
We're not gonna go to marketplace without enabling AWS.
My team is doing enablement.
Now we do enablement on all of those pieces
within the internal at Rapid7 as well
and the benefits that can be gained from that.
- Yeah, I can sympathize with your activities.
I think I said this on another episode.
The home life, trying to do it all on your own
and all those hours was severely strained.
So I think I had a lot of a butt kiss and to do after we had spent.
Halloween was always the very tough one
because it's always on the 31st.
And I'm walking around with my laptop doing trick-or-treating
and going to friends houses and having to sit outside
or sit in a room and do private offers
after we get back from trick-or-treating.
So yeah, that was a tough one.
New Year's Eve too was not a lot of fun.
- Oh yeah, no.
- Maybe they'll actually make a costume
about this role someday.
- It was super clear.
- Yeah, me and a cape and a computer attached to my side
with the Rapid7 shirt.
- Yeah, and a cloud over your head.
- Yeah.
(laughs)
- Now we talked a lot about aligning company goals
with Marketplace priorities.
We talked a little bit about it,
but I wanna unpack that for a second
before we kinda talk about how you kinda measure all of this.
But when it came to Rapid7 aligning
with AWS's priorities, for example,
how did you ensure that the company
from a strategy perspective was aligned to what AWS had
as a priority and can you get a bit example
of how that benefited you?
- Yeah, I mean, I think the way that I positioned it is,
we're doing these things anyway
and customers are driving us that direction.
AWS is driving us in that direction.
And we've had a ton of success leveraging the programs
we talked about it and we wanna keep having that success.
So let's figure out how we can take what we're doing
as an organization and align it to what is important
to AWS and just take that to market together
'cause if we're gonna do it and they're gonna do it,
why not do it all together?
And so Marketplace was something that again,
became extremely apparent just due to the organic growth
from our customers and then all the different reports,
I think the report that Tackle was put out
showed 15 billion in Marketplace transactions in 2023
and the expectation is about 125 billion in 2026.
So that's massive growth and it's just,
it continues to go.
I think our, we are currently six months into the year
well seven and a half, but if we look at our first six months
of the year, we've already done more transactions
through the Marketplace than we did all of last year.
And again, I've only had a team for six months.
Thank you.
I've only had a team for six months.
All of them have come on board,
new to this role,
new to what we're trying to accomplish.
And so in all fairness,
I can't even think that they were dangerous in this role
or at least the first three months,
tried, there's just so much to learn.
And so again, this is just organic.
It's just organic growth that we're seeing.
And I think our second half of the year
is just gonna be astronomical after all of these folks
have been enrolled for six months,
learning, understanding,
being taught by our Tackle,
go to Market Coach on all of these different aspects.
I think our second half of the year
is just gonna be astronomical.
But why again, fight the wave
when we can just jump right on it.
I did an SKO at the beginning of the year.
My analogy was,
if any of you have ever surfed or boogie boarded
or even body boarded in the ocean,
if you don't get on the wave at the right point in time,
you get left behind or you get run over by it, right?
So there's a perfect moment that you can get on
and ride that wave in and on the street.
And that's kind of where we are now.
We identified that,
we want to get on the wave
and ride it in the right way,
not get crushed by it
and also not get left behind.
And so that's where we aligned.
Okay, Marketplace is important.
It's happening organically.
Let's ride that wave in.
It's also very important to our partner.
So let's just, let's take advantage of it.
And then the way that we aligned that Marketplace goal,
it hits all the other activities
that need to happen
from a coastal perspective,
from the enablement perspective.
All of those pieces again, just take us back to Marketplace,
which is happening organically
and very important to one of our major partners.
I imagine you're sharing that with them as well, is that right?
Are you letting them know that you're aligned
and here's what we're doing?
And yeah, we just had a QBR last week
and we're doing great.
AWS is loving it.
You know, I've heard from multiple AWS personnel
that we are on the right track.
I don't want to give too many secrets away,
but I've heard that we are definitely on the right track
of what our focus is as an organization are.
And then as we look to leverage the partnership
and all of the benefits that AWS is offering,
I think it's just, it's gonna be great future
for a partnership with AWS.
You're on the right way, right?
You're on the big, yeah.
I know what, right?
I'll keep with the same analogy
throughout the rest of those, on the right ways, correct?
Exactly.
Yeah.
So you incubated some processes.
You kind of got them established.
And then you went and actually optimized them
by partnering with tackle, really building solid foundation.
Let's call that your boogie board or your surfboard
for you to be able to ride this wave.
In the beginning, you measured success
probably differently than the way you measure success today.
Can you kind of take us through that journey of when you're an ISV
and you're kind of in the establishing and building adoption
phases, what the things you focused on from a metric perspective
versus now you're really in this, like,
we're gonna go drive and scale the adoption
and how you're looking at metrics differently today.
Yeah, originally our success metrics were strictly POs
getting, or sharing opportunities with AWS.
And our theory was the more we share, the more we'll get back.
And I was fairly accurate.
You metriced on you sharing, like the number of deals you're sharing
and the increase of your pipeline to the cloud.
Correct, yeah.
Yeah, okay.
Yeah.
And that was, you know, I think it was still very new.
I mean, we're still, I would say very new to this
and learning, you know, what is important each and every day
and it changes all the time really.
But I think if the North Star, again, is back to,
how do we leverage the partnership to do better for ourselves?
Don't compare what we're doing anywhere else other than,
did we do better this year with our partnership
than we did last year?
And, you know, originally my goal, being a team of one,
was strictly just how many deals can you share?
And then we floated around the idea of, why don't we measure,
maybe we can measure how many deals do we get back from AWS?
But we really couldn't find like this correlation.
And really, if all you want to measure is AOs,
I mean, you have to have a team of a ton of people
and you have to be in AWS office all the time, non-stop.
That's the only way it works.
And it doesn't, it wouldn't, in my eyes, it doesn't scale.
It doesn't, there's no, or, okay.
So they do measure like how much revenue
and using our umbrella term of revenue, like investment funds
and AOs, like how much revenue?
Yes, yeah, that's, so the revenue from COSEL
was what we measured in year one, year two,
I was pushing for some different metrics,
but it just proved to be very difficult to track the metrics
I was trying to get to.
And so year two actually was COSEL revenue as well.
And what we got to in year three is, again,
all the activities that we're doing
are going to lead to marketplace.
So marketplace should be our success measurement.
We have to share opportunities to have marketplace transactions.
We have to do enablement for not only internal at Rapid7,
but external at AWS.
That should lead to marketplace transactions.
So this year our goal, my team's measurement of success
is marketplace total contract value
is what we're looking at this year.
That's great.
And TJ, you mentioned the other day
when we were talking through all these processes
and through all these changes,
you were looking at this when you came into the business
as like, we are a small business.
We're kind of looking at this through the lens of like,
hey, we have a million things that are changing every day.
I'm trying to test things over here.
I've got activities over here.
I'm really doing it all on my own as a small business.
And then we transition to this kind of enterprise lens.
And you've talked a lot about how those have come about
and the value that you started to see by doing as such.
Can you talk through some of the operational changes
that you made during this process?
We've heard about the deal desk team
and putting that together,
but anything with your listings
or the enablement processes that you built out,
what did that look like?
And how did that change from your small business approach
to this now scaled enterprise lens?
Yeah, I think the original approach,
as we got into the partnership with AWS,
there's many unknowns, you know, AWS, such a big company
and they did just everything they do
lose at a rapid scale.
And so I think marketplace,
I wasn't around for it, so I can't say with certainty,
but I think it was almost kind of like a surprise.
Like, oh, you're an AWS partner,
you got to be on the marketplace.
And the person that was in the shoes before me
was awesome at tons of knowledge.
And what he would do is as we had somebody interested
in the marketplace, he created quick listing.
Now he had a million things going on
and was actually doing a couple of different roles, I think.
And so as he would create these listings,
they might not be the same logos,
they might not be the same far out.
The pricing was put together
just to be able to transact quickly.
Majority, a lot of our businesses
don't through private offer,
so it wasn't this big deal, right?
That marketplace was all disparate
and definitely not uniform.
And so as we've progressed through our processes
and just our maturity,
we've identified that we need to have that consistency.
And so we've now looked at all the listings that we have
and what we're doing is actually consolidating them down,
and Rapid7 really is focused on three main products,
one of which is just all of our products,
our insight platform.
And then we have our managed threat complete solution
and our cloud risk complete solution.
So what we've tried to do is consolidate our listings down
to really give it that enterprise level kind of approach
and make sure all of our listings are consistent,
our price points are consistent,
and utilize all the different features and functions
that AWS has rolled out for the marketplace
so we can look like our marketplace brand
is the same as our global company brand.
It's not this little SMB mom and pop type shop.
- And I imagine you've put that back into your flywheel
as like, hey, we've got regulation
and governance around this process now, so that's it.
- Yes, something that we needed.
That's great.
- We now have a person who is responsible
as part of their role that is responsible
for managing our listings,
making sure they're updated whenever we create new materials
or pricing changes or logo changes
or whatever it is, this person is now responsible
for managing those updates on a regular basis
where before it would have been myself
trying to manage those things.
And that just proves another area that I have to stay up on
would be to consistently meet with our product management team
to understand what changes are coming,
what do I need to do?
And then go and update it to then go create
the marketplace private offer after I've co-sold
so it was not possible to update those things
at that point in time.
- Good advice for anybody listening.
Everybody's gonna start in this kind of small business phase.
We all want to mature to the enterprise state,
but we need to make sure we continuously evolve this,
incorporate these processes, get them documented,
make sure that we've got people to support us.
You can't do this as one person.
It just doesn't scale right
and it's not gonna get you the output looking for.
So that's great, great advice.
- And you have to align your presence
with how you are marketing and building your own product
and selling your product directly, right?
Like they have to be very similar models.
- Especially as more and more people start using the marketplace
because you can run into a company finds your information
through an event, through an internet search, whatever.
And their first instinct may be to go to the marketplace
to buy your product.
And if they go to the marketplace
and they see some outdated information,
they see different logos and different titles
and then it might make them feel okay,
is this company as serious as what I expected them to be?
And I think that we are doing a great job
of getting ourselves to that point on the marketplace.
- And TJ, you've been super generous with your time
and we wanna respect it.
So Aaron and I will just ask you probably one more question each.
But I wanna make sure Rapid7 got a good plug in here
and you've done quite the job at that.
But as you look ahead from a Rapid7 perspective,
looking at future investments and strategies
that you're making, how does that look
when it comes to cloud marketplace
and your presence in the marketplace?
Any things on the horizon that you could talk about
or any changes coming that would be valuable
for people to hear?
- Yeah, I think what we're focused on, again,
is marketplace really.
We're looking at all the different aspects.
And as we look at that waves that we're trying to ride right now,
we want to bring all of our partners on the journey
with us along with us.
We have a very strong partnership
or a channel partner strategy at Rapid7
and our goal is to bring them along on the journey with us.
And so as we look towards the future,
we start to develop and hone in our own marketplace strategy.
We want to make sure that we take that same message,
take that same initiative and do that with our resellers
and with all of our channel partners.
And so I think moving into the future,
as we've gotten better at leveraging this,
now it puts us in a position to be able to teach
and work alongside of our partners
so that we can all win.
And really, I mean, in the grand scheme of things,
it's for the customer, right?
We're working with channel partners to deliver our solutions
to our customers.
And if we can all ride that marketplace wave
and this cloud-go-to-market strategy together,
then I think it's going to be a win, not only for Rapid7
and our channel partners, but our customers is the big one.
- So what advice would you give someone who's just starting out?
Let's say you're talking to yourself, you know,
in the very beginning, like the things you know now,
what would you tell yourself in the very beginning?
Like, oh, I wish I would have known that.
When I was first getting started,
that would have been a game changer for me.
- Yeah, that would have been hard
because even knowing what I know,
would I have changed what I did?
I don't know.
But I think the big one for me is like, oh, let's co-s out.
Sure.
Let's share all these opportunities.
But what I didn't think about was all of the
administrative tasks that come behind that
and the potential to really create potentially bad
relationships with AWS, you know, the partner
that we're trying to work with,
we were sharing so many opportunities
they couldn't devote the attention that was required
to my colleagues at AWS and to the administrative tasks
that are required to manage all that.
So if there's any advice, I would say, you know, slow it down.
So realistic goals, understand that there's always
going to be another piece that you have to do.
Like you might think that you have it,
but you're going to do it and find out
there's more work that needs to be done after the fact
that you didn't know about.
And so that's some realistic goals and slow roll it.
Set an end date for what you're trying to accomplish
and make sure that you give yourself enough time
to provide the right experience for it
unless you like work in 24 hours a day, seven days a week.
Yeah, I think that is always like,
it's sneaky time consuming is what I always tell ISV is like,
and while it's a very tactical thing,
it's a very strategic thing.
And if you really need to be ready
because it is going to either be a positive
or a negative thing to your brand
when you try to go to market with AWS
or any of the cloud providers,
if you're not really ready to follow that up
and have operational excellence around it,
that's going to actually be a negative towards your brand
and could actually hurt you and not help you.
Yes.
Well, today, thank you so much.
This was so great.
I know we could talk forever about our experiences
with the clouds and with going to market
and like all the fun things we're doing now
and fun things we're going to do in the future together.
So really appreciate you.
Not just as a customer,
but now you're also on our newly established
customer advisory board.
Thank you for you spending more time with us.
Thank you guys.
This is great.
Thank you both.
And next time you want to color coordinate
and ride some waves,
I know Eric, I'll find right now.
There we go.
Sounds like a plan to me.
Awesome.
That's great.
Thank you.
Thanks everybody for listening.
Thank you both.
And we'll see you next time.
Take care.
All right, Patrick.
It's time for aha moments from our conversation with TJ.
What aha moment did you have?
What did he leave you with?
I think you and I probably have a bunch.
I saw my pen going and I thought,
I saw you thinking about these.
So I know next time I'm going to need to like grab a pen
and paper because I'm like,
I can't remember all of these.
Yeah, I'm going to put it back on you
because I think when he first started talking,
he was really going through like our workshop
and unpacking the brand building piece.
So for me, like having a customer have that click
in their head and start to use co-sell to build brand,
like I'm going to stop talking because I know you.
This is really--
I was like, oh, he's just pulling on my heartstrings.
I started a whole business around co-sell
and I really truly believe that fundamentally co-sell
is a great branding tool for ISVs
who are trying to establish their cloud
going to market strategy with their cloud partner
as well as like accelerated.
And his story was just like, yes, we used co-sell
and co-sell was really about branding
and giving us an opportunity to go knock on everyone's door
and tell our story who we are, what we do, who are our customers,
who are we trying to sell into?
And he not only used co-sell, but then he applied one of our accelerators
that we say like your experience can happen
in a variety of different time frames.
And one of those factors that can influence your time
is the volume of deals.
So then he just slammed the system with a ton of deals
so that he could get their attention even faster.
Yeah.
And then realized-- so one of my other points was like,
then he realized, oh shoot, I can't do this 24 hours a day
because now I'm getting actual buy-in and feedback
and conversation started with straps.
Right.
And he realized that I have to keep operational excellence
because this is part of my brand.
And if I actually have bad deals in there
or deals that I'm not launching on time
or not closing them out as a loss so that I could stay focused
on the active deals, he was like, this
is going to hurt my brand.
Just as much as it could help my brand,
if I don't do this and do this well,
it's really going to hurt my brand.
Yeah.
So if you know me and you follow me,
you know I talk a lot about operational transformation.
And this is what we're talking about.
There are things that will change internally.
And you need to be flexible to handle them.
So they're handling them nicely now.
I think that was a good one.
What did you think about--
I know we talked about it, but what
did you think about when he was talking about comparison
and competing with others?
Oh my gosh.
The athlete in me--
I was like, yes, I'm a runner.
Like every time I go out to run, I'm always like competing
against myself.
Can I run faster?
Can I run farther?
You know, when I was competitively running,
it was like I wasn't really worried about who was in the race
because I was racing against myself.
So when he said that about metrics and not comparing yourself
to what other ISVs are doing or where you're
necessarily staggering to inside of programs,
but really just to compete against yourself
and to always try and do better than the last time.
And that those metrics do change as you evolve
and as the cloud providers putting out different priorities,
but always still keeping that fundamental principle
of you are competing with yourself.
And when you compete with yourself,
you naturally are going to strive for excellence
to try and do better next time and have
a natural progression of improvement.
Yeah, because we're kind of still early in this game,
but we're not that early.
Our competitors, most of your competitors
are either in or getting in.
And so we're all going to be on the same playing field soon.
So how can you compete more with yourself
to become that number one spot?
How do we year over year get better at one piece of the business?
We need to become more efficient on the back end.
Yeah.
And you know, the other thing I really liked in his story
was he created some processes in the beginning, right?
I incubated these processes.
And then when I needed help, he called a partner.
He called tackle, someone who has experience in this
to really help him refine his operational processes
so that they were easier and with ease came speed.
And then the part of his story that I think a lot of times
is the value add of being a tackle partner is our coaching
and not only our coaches, but our support team,
our implementation team.
We are wrapping ourselves around that customer,
really helping them enable and educate them in that role.
Like we're training them, like a trainer, we're training them.
We're there to help teach them and to help continue
to teach them as things evolve and change
with the cloud provider, also within tackle,
making their life easier.
We are their first point of contact for training
and technical support.
So instead of calling the cloud or leaning on the cloud
partner, they're actually leaning on us
and we are scaling them faster, right?
Then if they were doing it on their own,
or potentially if they were relying on the cloud partner
because the cloud partner has 40,000 partners
that they have to support, right?
I really loved that.
Yeah, and you said our coaches and one of the things
I wanted to bring up, I know our coaches are doing this
and they're helping customers like TJ looking at the metrics
that you should be tracking, the things to compete
against yourself, what's our current win rate?
How's that look quarter over quarter?
What is our deal size?
And he said that their win rates are up over 40% now.
Their deal sizes have tripled.
Their sales cycle decreased by 21 days.
Those are things that are tangible value ROI metrics
that every CFO wants to see and every CRO is giddy about.
So if you're not tracking those today and you're listening
and maybe you don't have a coach from tackle,
we've got content out there, go track those things
because that's how you're gonna continue to get
more buy-in internally, build out your teams,
get more support and ultimately grow.
And what influenced that was also the fact
that tackle simplified his operational processes.
And because of that simplification,
he was able to train other people in the organization.
He's able to onboard new members into his team faster, right?
So in order to get those, he had to create
not only operational efficiency,
but simplification in his operations too.
And that also contributed to his growth metrics.
- Yeah, I remember I had three Excel files,
each with supporting documents for each of the cloud providers
I was in that had, here's an intake form from sales.
Here's how to go create a deal in this marketplace.
Here's how to do one in that.
And then when we hired tackle, I don't have to do all this
anymore.
I just have to have one quick 10 minute demo.
- That's great.
- Yeah, I know.
Sometimes I'll ask a customer,
I'm like, my goal in life is to get you out of spreadsheets.
So tell me today what's a spreadsheet you're using
and how can we do that in our product for you?
- Yeah, that was awesome.
Well, Aaron, thank you again.
This was an awesome episode for everybody listening.
Go check out TJ Schmidt.
He goes by Timothy on LinkedIn.
So if you want to connect with him, you can't find him.
You got to look at Timothy.
Rapid Seven, director of cloud partnerships.
I'm your co-host Patrick Riley.
- I'm your co-host Aaron Feiger.
- And this was another episode of Unlock Cloud Good Market.
Thanks for joining.
- Thanks for joining.
- So pull up a chair.
- Grab a notebook and join us as we share the essential stages
of the maturity model to start, optimize,
and grow your company's revenue using the cloud.
For more resources on executing your cloud,
go to Market Strategy.
You can visit our website at tackle.io.