from the crossroads of America in the hooer state of Indiana this is get in the podcast focused on the unfolding stories and extraordinary Innovations happening right now in the Heartland I'm Matt hunkler CEO at powderkeg and I will be one of your hosts for today's conversation I'm joined in Studio by co-host Nate spangle head of community at powderkeg and on the show today is Kelly schland CEO of torch light this is the fastest growing space can you think about the the downturn of SAU s sauce where the course last this is the fastest growing space on the planet Kelly schland is the CEO of torch
light a cuttingedge partner relationship management platform Kelly is an expert when it comes to scaling startups having worked on over 30 companies two Angel back companies three companies with exits and has grown another company to over three million in monthly recurring Revenue at open insights Kelly helped build a relationship ship with Google Cloud that help that startup go to market and scale very quickly so today we are going to Deep dive into Cloud marketplaces one of the fastest growing channels for software sales we're going to cover topics like developing your Marketplace strategy to grow faster with your company getting help from companies like Google AWS
Amazon and Microsoft to reach more customers and of course using partner relationships to sell bigger deals more efficiently Kelly I'm really excited to talk about this welcome to the show thanks good to be here can you tell us a little bit about your experience and how you ended up going deep on cloud marketplaces with what you're currently doing at torch light yeah so I won't say it was completely by accident but it was it was a little bit unexpected in some ways because at the point at which I was asked if I would be interested in taking over torch light it was a already a
partner management software right they' already made the pivot into the space into partner management and as I came in and started looking at it I'm like this is really close to what we had bit been doing and over the course of the last six months or so what we realized is no actually everything that we did over there like that's applicable everything we did at the last company at open insights was is really applicable in the marketplace and there's no tools to do it and so that began the process of adapting what we already had at torch light for the part partnership management and adding
to that in order to be capable of working with marketplaces tell me what that meant to you and the founder at open insights how that changed the business that partnership with Google yeah it's interesting because an angel so won't surprise you but friend of the show for sure yeah but he he had that vision from the very beginning yeah in fact I think the way that he said it is that someday they're going to call us and say hey can you come help can you come work with us and and so it it literally happened that way it was one of our clients their their
sales rep basically uh called up the guys there and said hey you guys are using an awful lot of compute things and he says did you leave something on or something running like whatever and they're like no no you got this guy over here and that sort of was the first intro into the Google ecosystem nice despite the fact that we knew we wanted to go there they started the process and then after that he's okay you guys need to go over here and do all these other things to become partners and so on and so forth and so that's where we where we ended
up then progressing down through the process of their partnership program what did that mean to you while you were there once you're in the partnership program what kinds of signs of growth did you start to see after that yeah I think one of the things that was helpful is and I I don't want to be unrealistic about a relationship with them when you're especially when you're a small company we were what is called the trifecta because we were a software that's open insights was a software that sits inside the platform and as we look at that means it it would raise their computes if they're
running the open insight AI product inside of a company and so that really set the stage for having conversations with them it didn't help it did help that it was a software that also improves marketing relevance and so that also now has now gotten them into having conversations with the other side of Google which is Google advertising because it means that people are willing to spend more on their Google ads if they're more effective and so it was it was The Perfect Storm if you will in their case different people that we've now talked to have leveraged both the marketplace and the part parterships with
these hyperscalers in order to to do it even though they may not have the same you know the same effect when you say hyperscalers can you can you define that for us non-m Marketplace experts yeah this is a term that I think the industry analysts came up with I'm not actually sure where it came from but it really refers to the the three big cloud marketplaces Amazon Google cloud and and Microsoft's Azure platforms and that those guys have the ability to basically scale infinitely there's this no and they do so allow you to hyperscale and I think that's how the term came about that makes
sense I would love to dive in because I know you've gone deep on this at open insights Kelly and now obviously with torch light you're helping other companies take advantage of this opportunity we were hoping you could give us a master class on cloud marketplaces and how to grow companies faster seems like maybe the startups of the future that are going to grow the fastest might be the ones that sort of take advantage of the these opportunities yeah and I think think what we're seeing and I we've talked about this a little bit before but in the world now that we have of AI and
its ability to change the way that email works and the way that sending phone calls and everything else happens we're being inundated and so Partnerships have become really a much more effective way to get connected to people and and there's a lot of different slices to that but I'll stick to for the moment on how the marketplace and partnering with these hyperscalers actually does because for the most part they're their customers everybody is a software company out there is a customer of one of these three for the most part right y can we talk a little bit about the context of that just understanding Cloud
marketplaces in general how did we get to this space where we have these three big cloud marketplaces yeah so I I think the easiest way to say that is to say and I just use an example for AWS and if you're using AWS and you say okay we want to have a search functionality inside of our product right you can go into the marketplace and you can download elastic let's say and pull elastic in and then you buy it by the compute cycle right and so there's a number of companies over the years that have added their products into that and there's some security software
that are doing have indicated that they will do a billion dollars this year wow in the marketplace crowd strike in particular wow and a few others that I'm aware of that are in that range right now a billion dollars worth of Revenue through the marketplace wow and so what transpired though was is that it was not only about them you know transacting through the marketplace but what began to happen that's really changed the world is two things one is that internally these guys have decided that they're also going to help their SAS companies anybody that's built on their platform they're going to help them find
buyers and the marketplaces will allow you to use their commits so the companies that are in their Mar in their place can use their commits to buy their software and so what what happens is that it's like it's like you've got these companies that say we're going to spend a million dollars this year we don't exactly how much money we're going to spend this year but let's say it's going to be a million dollars and we say that because it buys down our compute numbers by half let's say Okay meaning like you're buying in bulk so you get a discount exactly yep okay but you've
committed to spending a million dollars this year either way yeah and so you're working your way through the year but at the end of the year you've got all these comput all this extra budget it's like having a prepaid debit card if I don't use this by the end of the year it's gone I can take that and I can apply that to software that I'd like to have right and so now all of a sudden as a SAS company I can take leverage the fact that that's sitting there and it's essentially what they've done the second part of that was is that they brought
the the cost of that down to the equivalent of a credit card processing fee it's like one to one and a to 3% depending on the size of the transaction okay and so it's literally made it like AWS now will take collect your money for you that's great they already have and and you're just dipping into it right they'll the money and then they'll resend it back to you less their fee and so the major players are Amazon AWS Google and Microsoft Azure what what are the kind of key distinctions between those three um really it's more of the platform if you think about it
each one of those has their own I guess the the cloud platform itself that people decide to buy build on yep at open insights we ended up a little bit more on the Google side because we were dealing with retailers had to didn't necessarily want to deal with AWS so it was a little bit of a a piece there and so that was that Azure is its own Beast if you will it's got its own sort of market esos system as well and it's a little bit harder to crack into but it's really valuable because they have a lot of people in that space that
are using Azure it's certainly not AWS is clear leader though if you think about the size of the amount of money being spent on these platforms AWS is a clear leader and then you've got Google coming in and and Azure kind of coming in both of them are growing about the same rate okay against AWS right now but it's still and are is there any kind of cross-pollination between those three universes it's it's interesting that you come down that road but you think about software like elastic or or crowd strike that we talked about earlier right and these guys are somewhat agnostic yes they're built
on a platform but they're agnostic and that they're selling in everybody's platform and they're doing that because it's a nice software to add on and the the real opportunity in the long run is just is to slowly work your place into multiple marketplaces and in fact if you're really good you begin to use something that we've looked at which is identifying which company has that opportunity or the potential for having what we call the potential for having a commit and so you begin looking at how deep does a prospect go into a specific technology and say maybe I want to move this towards AWS or
maybe I want to move this towards my partnership with Google because that they have a a lot of activity going on in that cloud and so that's where we're going to try and move this to that Marketplace and have a conversation with them but you really need to be in all Market places in order to do that yep what what's the the future outlook based on current trends what do these Cloud marketplaces look like in 231 yeah so this is the fastest growing space you think about the the downturn of s SAS software over the course of the last this is the fastest growing space
on the planet as far as growth in in the space there was a an article out last spring that basically said they $50 billion worth of spend in the space not for SAS yeah for SAS companies coming along by 2025 and now the analysts are basically saying as it's actually likely that could happen by the end of 2024 wow and part of that is this $3 billion dollar of commit that's already on the table between those three clouds like people have already committed to spend $33 billion over the course of the next 12 months as we stand here today wow yeah exactly that's incredible and
that growth has been the growth in the Sass has been somewhere in the 84% range so that's like it's like holy smokes like that's a completely new Beast yeah um and of course you know as people have now identified that there's more people getting in there so in addition just putting your mark key out there which is like everything else like building a website nobody knows it's there you still need to figure out a way to get the relationships built the Partnerships built how to identify and have conversations with those folks and we built a lot of that stuff based on our experience with open
insights into our platform and now we're getting into strategy developing that that Marketplace strategy I'm FC this I shift it into the listener mode as thought I was sitting here oh this is super fascinating so when you're thinking about launching and starting to sell through a Marketplace like this what are like the first three steps company's doing to actually like activate on this $33 billion are already committed these platforms how do I start tapping into that for my software company yeah there's a couple different sides to it one one part of it is you actually need to be listed in the marketplace so if you're
built on AWS or if you're built on Google the easiest thing to do is just to go over and say we want to be listed on your Marketplace they have you go through some hoops like you have to actually get the technical review and some other things to make sure that it's viable not quite as hard as Apple's IOS platform it's really tough to get in um but they still they want if you're going to buy through them they want to verify that the product is there product works ET so there's some technical if you were choosing one of those three to start on what
one's going to be the easiest to get your listing up and running the one you're in okay if you're a software company you're built in something that's we're built on AWS so that would be the first one that we want to start with yeah and so that kind of is the first step right and then the other part of that is in beginning to build out your partner Network and so in AWS for example they have APN which is their Amazon partner Network and you have the ability then to then begin the process of working deals with them and so you can now submit deals
into their system their system says we're interested in pushing this deal through the marketplace we already have a conversation going with this customer so how you do that really begins to set the stage right because you can imagine if you're a partner and you've got a company that's sitting there that's got a million dollar commit this year right they they're doing an awful lot of stuff through there and everybody and their mother of their thousands of companies that are partners are saying hey we want to sell to them right and so they are selective in who they have a conversation with right so just because
you're a partner doesn't mean you're going to get an introduction and so the question becomes how do you leverage yourself into those conversations the first one is have a customer right uh if you've got a prospect that you're working often times you'll find that the field sales rep for those clouds is interested in knowing more about the business side their introdu their side of the business is they're really in the it side but for them to grow their footprint they need to understand more of the business problems and so if you're having conversations with say the marketing department or you're having conversations with their their
accounting department whatever area it is that you're helping them uh work on those highlevel conversations are great opportunities to to reach out to them because they want to understand those problems to help for them to grow their base but also to to be able to help especially you've already gotten through that SQL side St stage of things so from a strategy standpoint if you're starting with just one um it start with one and really work that relationship first make sure your rep understands yes your business how you're helping your customers yes and then from there how do you get to the point where they're actually
like helping you sell your product like you're listed now you've gone through the process of listing in the in our case AWS Marketplace which we're not currently but could be yeah now how do you like Leverage that relationship and maybe even some of the cloud data to identify buyers yeah so what we've identified is that in at the outset when you're sitting about here and you're looking at prospects and we can use intent data as an ABM World we've all of known about you can use account based marketing for those not but you can use intent data to identify who's in market and in Market
signals and so then you go through the process of using that as the the front end of your outbound that then gets you into some con calls and you end up with a conversation with a prospect now we take that and we go over into okay how do I leverage this looks like it's a deal in our platform we now can look at that and go hey that prospect that Prospect is really heavy like they're doing a they're doing red shift in AWS like there's a likelihood that they already have a commit in that scenario right so let's try and use that partnership that might
already be there with AWS to help leverage us for a close and possibly if there is a commit there we could possibly leverage that pre-existing commit to help pay for the software so instead of going through the budgeting process which may be very painful sure is they try and find they've already got a budget sitting there y an Enterprise customer exactly who's committed X dollars to spend in the space Maybe isn't using all of it yes and is it even possible to identify things like that without a platform like torch light it's tough yeah because we're using a lot of signal data in order to
try to determine what that looks like it's it's not a perfect science it's still like intent data it's still it's still evolving but we're using that to help us get a a feel for the likelihood we call it the likelihood of a commit and so then from that then we also then have the intent data so we're taking look at this customer's intent data against our custom our customer stack but then we're also looking at the intent data of the cloud so now what is telling us is in the we can now look across that and have a conversation with that rep this is the
part about building a relationship where we can say hey look I know we've had this conversation with this client and this client but these guys are actively looking at say Google right now like they're there's a whole lot of intent data signals for Google if you're an AWS rep you want to know that right because I don't want to get them too far down I don't want them into whatever or vice versa yep and so that gives us a leveraged conversation to have with that person or to understand too that they're actively looking at going deeper key to Partnerships is you're bringing value too right
right and so that's part of the conversation that we've found to be super helpful that's what that was The Leverage piece that we had with Google Cloud was to bring that to the field sales rep and say and actually look at all of their accounts and say let's see where all your accounts are and so now we've built their relation ship where they are more willing to invite us into their other accounts yeah not just the one that we brought to the table and so that's the long-term leverage and and we see that paying fruit where we did at open insights as part of the
as part of the the strategy of of moving forward and we've now built that into torch light as part of how we help you leverage those relationships can you talk to me about how you could actually work with that sales rep or other relationships at that company at that cloud platform to actually close those deals what does that look like you know is that just an introduction or will they actually come in alongside you and have those conversations yeah it it it I will say it just depends in most cases if it's they'll never do an introduction without going along right there's they're not they
very rarely would do that right but they will if it's something that they see the numbers they see the the pieces moving and they believe in you I think that's the other part of that too is just you have to have the stories to back up the your successes and case studies and some other things to go along with it but once you've got that and you can show them and they can understand it they're liable to be the person that's willing to introduce you into that company but they're going to go along with you at that point it's you're co-selling the deal yep I
love that I'm getting excited and I'm like let's get listed in the AWS Marketplace I got excited I jumped in Nate I'm G let you take over transaction and management in the cloud because I think this is an important topic yeah and we hinted out that earlier right where you're talking about this already already preset spending amount basically like that that prepaid debit card is what you set it up how do you see the best practices for streamlining that transaction process so getting it from committed to in your account as a Marketplace provider yeah this is a it depends time of answer right because it
depends on the type of software you are the type of company that you do the impact that you have on the company that you're dealing with and not the not your prospect but the partner you have AWS whatever and so it will impact the best way I like to say it is that aligning interest so what extent does your relationship with this Prospect have with the impact it's going to have on the sales rep on their commission let's just be honest right yeah there's a lot of folks that do things for the right reasons we we know that but it helps if it's for the
right reasons and it lands their pockets at the same time everybody has personal interests and so that the highest and best is if we've got a product that is going to actually increase compute Cycles right so if we've got a product that's going to be pushed into the platform that's going to increase compute Cycles or increase the amount of data they need to store or whatever that looks like that tends to be a little bit more interesting right now what are examples of that open insights was an example this because it's it's an AI product for retailers and in the process of putting that in
what we needed was we needed when we were there we needed all the data from that retailer right so that's a right so what we did is we the company that was our client but would basically set up a Google en environment and which they're paying for right and then we would migrate all of their data all of their transaction data into that space that would then feed our AI models um and so from the from the Google Cloud rep it's oh you just went from a few thousand dolls in spend to thousands of dollars in spend that's fantastic right we love that y that
makes your career kind of things right absolutely especially to do that in for us it was at open insights it was like a 90-day window right because we would we dumped it in a lot of exper expertise on their team to to model the data get it in place the way it needed to go and to leverage that going forward and once that was in place they started making money open insight's never got to the stage or has yet to get to the stage where they're actually in the marketplace because they were so good at leveraging the partnership that it was like we haven't figured
out how to leverage we haven't gotten over to getting to that so that's still on the road map for them because now we can double dip because not we get help them increase compute Cycles but the cost of the software can now go through Google Cloud as well they would collect the money on that and then remit it back to open insights and so that that whole model is fantastic especially when you think about the cost of that product cost of collecting too right oh which is it takes money right and there have been a couple of those where the opportunity has presented itself uh
where those proof of Concepts at least the other piece that I make into the mix of this is that we think about things when we've bought stuff in these clouds and usually it's a fixed price you can see it on the website whatever SAS doesn't usually work that way SAS usually has a flat fee per month and then usually it's involved a sales guy and figure it out and what these clouds have done is they said oh we recognize that you guys need the flexibility so we'll create these private offer opportunities where we can now say we can push over to the cloud to say
we've got data that says we're going to do a deal that looks like X and it's going to be so much a month and then so much for utilization or whatever that ends up looking like and and as a result of that um that becomes the price that they may collect so that instead of just being list priced so this is great for like enterprise software companies that maybe don't have prices listed on their website yeah a private offer is literally hey company we would offer you this price for a product yeah and none of that gets published anywhere it's just a private exactly just
goes between you the Prospect and in AWS or Google or whoever your platform is I think there was something super interesting you said earlier about the CRM integration right between our as a software company right you talked about crowd strike like in our current CRM and then you through torch light to the Salesforce instance can you talk more about that and how that's a key differentiator in Partnership management um yeah so in the grand scheme of things um I'm not sure that anybody really likes partnership management software to be quite honest with you and I'm let me just being honest because at the end of
the day salespeople like to work in CRM to the extent that they like to work anywhere they they they don't want to have 10 th 10 things they working right they want to work in their CRM that's where the deals are happening that's that's where they keep track of stuff and so that's really the point of Truth and so from the sales guy to try and do a coell I don't want to go to another software right and so one of the things that we found is the the necessity to integrate that into the platform so that is now available to their partner that information
is available to partner so that was already built when I came on board what we've been working on is actually the other side of that which is now connecting that over to the cloud Marketplace so using their API instance in order to push this data into the AWS and then AWS is a part of that pushes that straight into their Salesforce instance and so their sales rep over there gets that information straight away that's incredible and so we just push the information across the distinction is that we've built a spot in the Middle where there's information that can be put in there that helps get
their attention yep and so those notes are what kind of becomes the key part what is it in what's in it for my customer the sales repit at ABS says what's in it for my customer and so you can articulate that and you can also articulate what's in it for AWS and you can put all that stuff in a place that you can either reuse it or whatever and push that information into each time you have a new meeting with a new sales rep so when you have a Salesforce or a HubSpot integrated with the cloud Marketplace you're getting that extra layer of data where
you've got a prospect or a lead that you're working with and it's pulling the data from the cloud Marketplace saying hey this event just happened this amount of utilization just occurred or this amount or this customer just purchased this piece of software what kinds of data do you actually are you able to pull out that Marketplace into your CRM that's actually enriching the and I won't over overstress this enough but when people go to the marketplace they basically fill out a form and say I'm interested in X Y and Z software right and so when they do that information gets emailed to the company right
but the company's on the hook to update AWS on any of those leads on an ongoing monthly basis okay so now all of a sudden you start seeing if I get any amount of leads like that's a lot of leg work yeah and so what we done is we built the integration into the API that it automatically takes a look at your CRM it tracks where that deal is in the price plan and it updates AWS so you don't have to do it automatically right so it really part of that obviously is just plain automation but some of it is let's make it easier let's
not make it harder to deal with these folks let's make it easier to make this relationship work yep that makes sense talk to me about Services how does services play into taking advantage of cloud marketplaces yeah so there's probably couple different aspects of this and I I want to stress this in a really unique way the challenge with clouds today okay and I just I just go down the road of the clouds depending on the type of software somebody has the challenge with clouds today is that people who understand how to build in them have built in them and and so what I mean by
that is and and part of this is been a lot of time in the AI world and so that's some of the people the prospects that we have conversations with and one of the things that that I came to realize was is that they're like for somebody to use our AI product most of them don't have the sophistication in order to put that product into place properly and run it and so now comes into the issue is so what I really need is I need managed services to go along with that I need somebody to service that for me in an open insights we did
that we basically said okay fine we'll I know you've never been in Google before we'll come in we'll manage the platform for you we'll manage all of it for you but it also opens a door and our software helps help this is creating those Partnerships so we don't necessarily need that TK 10 does a great job of managing our friends up in in South Ben they do a great job of managing the platform in AWS right so why don't we partner with them and they can handle the services side of it and the manage services side of it we three-way partner put that together as
a a Cooperative opportunity into the private off offering and AWS collects the money and spurts it to both of us and so these are the kinds of things when you start getting into some really unique ways of of utilizing Partnerships um in order to get more customers that's wonderful because now you're turning that one strategic partnership with AWS into maybe now t 10 is starting to bring some deals your way or whoever your manag service provider is that you're partnering with it starts to be this kind of Love Fest Yeah the more Partners you get in involved that's awesome yes considering that I'm in the
partnership space yes well yeah so talk to us a little bit more about Cloud Marketplace management just this is where torch light operates it's a category is is this a big category are there other big players there's at least one other one out there that's relatively large they got their start by helping people get into the cloud okay and they're they have some software to help people manage but it's very limited yeah whereas with open insights I mean with Excuse me with torch light torch light actually came from the partner management space to begin with yeah and so we're already pre-built to manage multiple partnership
relationships into this right so we're coming into it with that what we've done is we've taken all of that partner management PRM stuff and we basically said let's leverage that by adding in the ability to connect the API with the cloud and then let's add in on top of that this robust data set we have this intent data yeah around what we think the cloud that's going to be using this what the intent of your prospect is for different clouds and what the what the intent is around your particular your particular product we actually bring all of that together inside the platform that's really cool
what are you most excited about on the red map right now um that's a great question I think the pieces that are this leveraging this piece the next step of that is actually how the workflows that can come out of that because we've been really focused on getting the pieces in place for people to see so they can it's like a discovery and I think the next step along the way is automating more of those workflows behind the scenes yeah we have a bunch of them already in place from the existing system but it's adding to that those abilities to create Partnerships that's a it's
a really cool it's a really cool space that you're in it's a really exciting space $300 billion dollar of spend this year is crazy that's a huge amount of money and I'm really excited with how you've reposition torch light in the marketplace to specifically help what what isn't really a niche it's a pretty huge opportunity and so I'm excited to track where this goes maybe even make some plays ourselves into the AWS Marketplace this year with the powdercake platform I know I dominate a lot of this conversation Nate because as a marketer recovering marketer and just a fan of strategic Partnerships This Is My Jam
but I know you have some questions oh absolutely this is Nate's favorite part of every show yeah this is we're gonna get we're gonna get 10,000 feet above the cloud Marketplace discussion because that was a master class like truthfully that was maybe the most technical like master class that we've had so far on the show so Kelly great work there we're going to come out of the clouds a little bit there oh I see what you get there well done come on come on first Kelly this is more Indiana questions right outside of the amazing entrepreneurial ecosystem what is Indiana known for yeah that's a
great question if you asked me that 10 years ago I would say corn and in part because while I grew up here I spent most of my life working outside of Chicago and Northwest Indiana out outside of Gary area is just full of farm fields and so that's what we knew we had fresh corn every year from all those Farm stands but of course growing up here I'm also very familiar about the Indianapolis 500 and having moved back here when I was at Elevate Ventures one of the things that I came across was to say I would not have guessed when I left here years
ago I would never have guessed the entrepreneurial ecosystem as it relates to software that has grown up in Indianapolis since I graduated high school like I don't think there was anything like that I mean you had insurance companies and you had a Telco that was it right that was yeah um and so quite honestly at the time I was like I couldn't wait to get out of here and now it's like I can't imagine why more people aren't moving here that really if you think about it compared to Chicago we were up there it's like the price of housing down here is cheaper the we
live in the city here even the taxes here are significantly lower than than Chicago it's just like all the way across the board and and we have really enjoyed it we live in Broad Ripple area and so it's small town feel to it and so it's all walkable for us and so we've just we've really enjoyed being back here all right on that note what is a Hidden Gem in Indiana o that's a good question I got got to go with the Vogue I just there's there's some other ones melody in and some other ones but the Vogue is one of those it's like pretty
amazing music venue yeah performance venue we've had some big events there and it's just amazing to see the quality of the acts that come through there living there I see them all we at them notices and we see them all the time on the mares and everything else and it's just amazing to see stuff continue and it's it's good to see them continuing I know it's changed ownership in the last five years and they have continued to grow grow their footprint so it's cool the vog is a great answer and final question who is someone we need to keep on our radar someone who is
doing big things that's a great question and the reason I say that is man in my time in the Venture world it's like there were so many that's I no wrong answers first one that comes to mind I'm forgetting his name too so I'm um it's not coming [Laughter] how about Kelly schland Kelly you know it's the hard part is that it's been five years now since I was at Elevate yeah yeah and so I've been living in my own little bubble and it's those people I knew five years ago it's hundreds of CEOs that I met along the way and I haven't spent time
with hardly any of them so yeah this is a great show I agree Master Class Cloud Market places great thanks for doing this Kelly I appreciate it